Are Brick Stores Really the Dinosaurs of Retail?
When will the asteroid IoT (internet of things) change the retail landscape into a permanent waste land? Some claim retail brick stores are a dinosaur waiting for the big asteroid IoT to hit and end it all. Many say retail is at the end of its days and point out how giants like Sears are almost extinct. Writers and consultants highlight how the IoT is tearing away at the basic ‘how to make money in retail’ assumptions. I cannot count the number of columns written that say retail stores are the showroom for Amazon and eBay. There are hundreds of software companies that ‘claim’ to have the magic mobile solution to solve the showroom crisis and meet the IoT threats. Don’t see that working out so well either…
It’s the End of the World as We Know It
Fun song by REM has some merit for retail and wholesale. Some retail is going to be lost as the IoT changes the way customers shop. The reaction time by retail to customers must get shorter. Some retail and wholesale operations believe that closing stores is the only answer. The reality is that is only ‘part’ of the answer. Many companies refuse to admit how optimizing their supply chain is a critical part of survival and growth. There is no question change is needed. The real question is which retail and wholesale companies are going to change their technologies fast enough to shield them from the IoT asteroid? Things like Demand Forecasting, Service Attained, Automated Exception Management, and real-time end to end supply chain technologies sound safe but most of retail today does not use the new technologies. For retailers that do not adapt to better Demand Forecasting, Planning and Inventory Replenishment it is the end of the world as they know it and I doubt anyone is feeling fine.
I encourage you to post some of the issues with legacy Demand Planning and Replenishment software that you see in your world today. I look forward to your comments and ideas for the future.
IoT Did Not ‘Ice Age’ the Movie Theater Industry
The entertainment industry knows this is all about product first. The entertainment industry has been fighting technology against profits for years. VCR, Blu-ray, DVD, on-line, Netflix, Amazon, Hulu, and Redbox are examples of technologies that didn’t exist a short time ago. Many believed the new technologies would end the movie business. The reality is people still go and pay more for a movie than 5 years ago. People it seems don’t even shy away from buying that $10 small popcorn. While the internet and other technology have dented the movie theater business, movies are still big business – really big business. One thing the theater business does well is use technologies like Social Media to talk to their customer. The movie business has been very good at upgrading their technologies to learn how to attract customers. Also, theaters updated technology in how they now play movies – digital, not film. The movie companies care a great deal about product and look at lots of data to find their customer and avoid what another brand is releasing to the theater.
“It is not the strongest of the species that survives, not the most intelligent that survives. It is the one that is the most adaptable to change.”
– Charles Darwin
Using ‘Best Fit’ Models to Demand Forecast the IoT Asteroid Impact
Good software that uses more than one forecast algorithm will have some type of ‘best fit’ decision math. What that means is the software will try different forecast math and test based on past results to forecast future results. The same thing can be said for the IoT and retail by looking at a different retail sector that has been winning the technology battle for years longer than retail. People still go to the movie theater and people still go to retail stores – if they meet the ‘Ps’ of retail: product, placement and price.