As the organisation evolves its relationships become more complex, with partners interacting with each other, providing composite products & services and becoming more intertwined with the retailer's value chain. No longer will an 'inside-out' approach suffice, instead retailers will need to understand their entire ecosystem – and start to shape it themselves.
A business ecosystem is a formal or informal network of organisations which could include suppliers, partners, vendors, innovators, regulators, other industry representatives and government bodies. There are a potentially unlimited set of participants from outside of every organisation which can significantly influence its success.
This network needs to be optimised as a whole engine instead of focusing on a single organisation alone. In fact
the final value delivered to the customer is determined by the whole ecosystem, not any individual company.
With the emergence of new technologies, changes in consumer habits and emerging disruptive business models,
all retailers are striving to keep up with the pace of change necessary to remain competitive. The natural impulse may be to remould existing business models, however this approach is highly dependent on the organisation’s ability to adopt change and can be highly disruptive to existing operations.
as omni-channel retailing matures, customer expectations are quickly evolving too – a typical customer journey will include a combination of products, services and experiences which wouldn’t typically be packaged together. It is becoming increasingly difficult for a single organisation to provide the range of products and services necessary to meet the customer’s need without diversifying too much.
Looking at some of the pioneers of these types of customer journeys we see that, treated piecemeal, they can lead to spiralling complexity in business models, processes and systems. Before too long, those forerunners are struggling to keep up.
A new paradigm is required which allows retailers to focus on their core competencies while participating in a wider network of organisations which delivers the experiences that their customer’s desire.
A new strategy is emerging which has the potential for maximum flexibility, rapid growth and true speed to market –
This approach recognises that organisations don’t need to own or control all aspects of the customer offering, but rather can act as enablers for a collaboration between multiple organisations.
The first step is to understand the ecosystem as a whole within which customers and suppliers coexist. Where are resources produced and consumed? Where is there potential for value to be created? What experiences are each of the participants having and where is there the potential for new customer experiences to be created across the ecosystem? What are the problems and how can these be solved across the ecosystem?
Switching to an ecosystems-thinking approach rather than traditional market-based thinking brings a focus on collaboration and cooperation between participants to mutual benefit. This will open up the possibilities and allow retailers to discover new, unique and more satisfying customer experiences which can be created. Rather than starting with the capabilities and offerings of a single organisation and trying to work out how to bring them to customers, we recommend starting with analysis of customer experiences independent of organisation and then identifying the value that your organisation can bring to the table.
The key enabler for a successful ecosystems strategy is to be able to ‘plug and play’ capabilities across multiple organisations into a cohesive customer experience.
Ecosystems architecture helps organisations to break the constraints of existing business models which rely on using internal resources to improve the organisation’s own capabilities or to procure services from the market. This greatly increases flexibility and expands the potential offerings they can provide to their customers. With a strong understanding of the business, contractual and technical aspects,
Retail Reply helps retailers to create the open business models necessary to execute a successful ecosystems architecture strategy.
Ecosystems architecture allows retailers to focus on their core and differentiating capabilities while removing potential distractions and constraints. It will even create more flexibility to change those core capabilities by eliminating poor performing or unprofitable capabilities and building new ones.
As the digitisation accelerates and the variety of technologies grows exponentially, the drive for change is much stronger. Customers expect enriched offers, services and experiences from retailers, along with rich personalisation, and you can choose whether to configure your business to exploit ecosystems, or remain isolated and potentially unable to meet customer demand.
An ecosystems architecture will allow retailers to unlock future revenue growth and further build customer satisfaction and loyalty.
Retail Reply’s Retail Ecosystem offerings recognise the need to quickly establish and reorganise relations with suppliers, partners and innovators, whether these arrangements are temporary or permanent. Its applied approach focuses on seeking business outcomes and justifying investment in building ecosystems capability - rather than treating it as a purely technical integration subject.
Retail Reply is the Reply Group company specialising in retail digital and business consulting and is composed of specialist retail consultants who help achieve their client's retail vision through use of customer-centric digital solutions. Thanks to years of expertise working alongside UK retailers, large and small, Retail Reply is capable of best advising how to drive client's businesses forward with smart use of technology.
Retail Reply's mission is to help retailers innovate and ensure that they see tangible value at every step of the way. Its consultants are experts in Retail Innovation, Retail Ecosystems, Capability Transformation, Customer Centricity and Proximity Commerce and its services include capability-led planning, omni-channel strategy, customer journeys and architecture-managed services.