I saw this picture on Accentures website: Retailers at Risk: "Retailers who aren’t forward-looking when it comes to digital technology risk being cut out of the value equation completely."
This is an interesting chart, because it shows clearly two things:
- The strategy of some manufacturers, eager to deal directly with the end consumer.
- What new technologies allows to do in terms of automation of orders.
There is actually a third part, not really shown by the chart: the fact that market places are booming, which gives less power to retailers in terms of product selection. As market places allow different retailers to propose a wide range of products, there is less value for the retailer to select products.
Nevertheless, I am not sure that a value chain where customers will directly order from the suppliers without any retailers in between is realistic. Indeed, customers are not sheep that are always ordering the same products, from the same companies. The will of customers to choose from wide ranges of options will still give an edge to retailers. Moreover, let's not forget, especially in the CPG world that we are talking about fast moving items, purchased frequently, but from different categories of products, which means in terms of cost efficiency (logistics) need someone able to retail and get the order together.
I am not that much inspired by initiatives like the dash button, because it costly for the supplier, and the customer benefits very low. Moreover the execution for the retailer is also a bargain.
What do you think about it?