Newest Supply Chain Paradigm Shift Hits Retail

In 1997, I had a half-day training with the leader of the multinational company I had just joined in Bangalore. He started with a story from Steven Covey’s book, The Seven Habits of Highly Effective People about paradigm shift:

One morning on a subway in New York, people were sitting quietly – some reading newspapers, some lost in thought, some resting with their eyes closed. It was a calm, peaceful scene.

Then suddenly, a man and his children entered the subway. The children were so loud and rambunctious that instantly the whole climate changed.

The man sat down next to me and closed his eyes, apparently oblivious to the situation. The children were yelling back and forth, throwing things, even grabbing people’s papers. It was very disturbing. And yet, the man sitting next to me did nothing.

It was difficult not to feel irritated. I could not believe that he could be so insensitive as to let his children run wild like that and do nothing about it, taking no responsibility at all. It was easy to see that everyone else on the subway felt irritated, too. So finally, with what I felt was unusual patience and restraint, I turned to him and said, “Sir, your children are really disturbing a lot of people. I wonder if you couldn’t control them a little more?”

The man lifted his gaze as if to come to a consciousness of the situation for the first time and said softly, “Oh, you’re right. I guess I should do something about it. We just came from the hospital where their mother died about an hour ago. I don’t know what to think, and I guess they don’t know how to handle it either.”

Can you imagine what I felt at that moment? My paradigm shifted. Suddenly I saw things differently, and because I saw differently, I thought differently, I felt differently, I behaved differently. My irritation vanished. I didn’t have to worry about controlling my attitude or my behavior; my heart was filled with the man’s pain. Feelings of sympathy and compassion flowed freely. “Your wife just died? Oh, I’m so sorry! Can you tell me about it? What can I do to help?” Everything changed in an instant.

When a paradigm shifts, everything changes. It’s a phenomenon that we are seeing in the brick and mortar commerce supply chain with the increased popularity of online shopping. Electronics OEMs and retailers are going to have to look hard at the tea leaves and react to these changes now, if they haven’t already.

Here are some indicators:

• Kenneth Cole announced that it is closing its outlet stores (except the Bowery, N.Y. and Arlington, Va.) to focus on selling online.
• Kmart and Sears are closing more than 50 stores in 2017.
• Macys is closing 68 of stores and laying off 10,000 employees
• Belk has closures and was sold, in part because they were late to the e-commerce game.

Shippers with powerful brands and products are thinking along the same lines. If more customers are flocking to on-line buying, there’s little need to showcase products in a retail environment. Instead, retailers want to showcase products and take orders online.