Power has shifted away from the producer toward the consumer. With a world of competitors only a click away on the Internet, consumers expect to receive more information.
In the past, conventional wisdom has been that you create value in the marketplace through:
- Product leadership: innovation, quality
- Operational efficiency: low-cost provider (WalMart, Kmart)
- Customer intimacy: How well I know my customer and can respond to her needs (Merrill Lynch)
Shifting the Supply Chain to the Demand Chain
Businesses have begun to separate these concerns in order to create consumer value. The following graphic demonstrates how the producer's perspective of
The e-Business value proposition must reflect the movement of consumerism, or supply chain into the demand chain.
However, despite the rise of online shopping, ecommerce still makes up a relatively small percentage of total retail spending. Retailers' brick and mortar strategies also need to evolve to continue to draw customers into their stores, and to compete with the online retailers opening their own physical outlets. Increasingly, we are seeing innovative marketing strategies, as well as new technologies such as smart shelves, robots, self-checkout, and interactive and virtual reality, being deployed in stores as retailers strive to compete on all fronts. Finding the correct strategy starts with one question:
Question: Given your brand promise, where do you want to compete?
Only once a company understands their goals,
1) customers and 2) the needs of the customers require an appropriate strategy to be designed.
The key to a sustainable strategy is being able to understand and meet customer needs both today and tomorrow, across geographies, and across generations. Advances in technology, logistics, payments and trust coupled with increasing internet and mobile access and consumer demand for convenience have created a US$1.9 trillion global online shopping arena, where millions of consumers no longer shop for items in a brick and mortar location, but instead are shopping using their PCs, laptops, and mobile devices.