The concept of Omni Channel Retail is flawed – I believe.

It does not recognise the extent to which the market has changed.

For centuries we have been used to Supply Chain thinking in which there was a linear flow from producer to consumer of goods and services.

In Marketing 101 we were led to believe that consumers ruled the marketplace – but the truth is that until the advent of the Internet – the supply chain ( ie. producers, manufacturers, wholesalers and retailers) called the shots

In Retailing 101 we were taught that retailing was simply buying and selling – for a profit.

With some exceptions such as markets, consumers had to pay the prices that retailers set, and margins were made by all the players in the chain.

The supply chain participants had to play a guessing game to deliver the ‘right product at the right price in the right place’ – the penalties of which included mark-downs and shrinkage.

What changed?

The evolution of the Internet.

For the first time consumers had more information than ever before, more options and choices of what they could buy – from whom – and from where.

Essentially the supply chain is evolving into a demand chain with customers calling the shots.

Today a shopper can choose to shop online or in-store – locally or internationally – from anyone from the producer to the retailer.

The relevance of the retail store in this demand chain scenario is certainly diminished, although it will never disappear – I believe.

But I think we have moved on from a store centric view of life – which is pretty much how most retailers explain Omni Channel.

I suggest we should recognise that we are now living in the era of the Omni Customer -a world in which the original marketing theory of a consumer led economy has finally been validated.

What does Omni Customer mean to retailers?

Customer’s needs have not changed that much, but how they go about meeting them has.

If you are only thinking in terms of stores your business will ultimately fail.

If you think in terms of a brand marketing goods and services to a consumer – regardless of the channel – you might be closer to the truth.

A mathematician might argue that – all things being equal – an equilibrium point might exist between online and in-store sales and that it could be 50:50 across all markets simply because consumers have equal freedom of choice and total freedom of information – allowing them to shop in the way that is most convenient.

This equilibrium point will naturally vary across products, but a 50:50 benchmark is certainly a long way from the current 5% of retail sales that is reported to be online.

In a 50:50 world filled with Omni Customers I would suggest there has been some change in the rules of the game.

What does it all mean?

Not sure yet – but as I suggested in my blog post yesterday – nothing’s changed but everything’s changed.

The next 10 years are certainly not going to be boring!