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Author's profile photo Mohamed Amer

Goodbye Panic Room, Hello Wild Blue Yonder: What a Difference a Year Makes!

 

Retailers Choose to Grow:

In the retail arena, the year 2010 marks a climb out of the abyss and a return to growth and exploring the possible.  There is a willingness to investigate fresh ideas for engaging with customers.  On many fronts 2010 will be seen as the fulcrum for the innovative growth in the coming years.  Despite continued concerns in the US over unemployment, consumer confidence shows signs of improvement according to December results by the University of Michigan Consumer Sentiment Index.  While most of 2009 was mired in negative (or at best flat) comp store sales, 2010 has marked a return to positive same store sales with an impressive +5.98% increase in November as compared to a negative 4.76% in November 2009 (see analysis by Global Hunter Securities’ Richard Hastings).   Additionally, online sales began to pick up and maintain strong positive momentum in Q1-2010 following four quarters of declining or zero year over year comps (Q4-2008 through Q3-2009).

 

Holiday Sales Take Off:

For the holiday season this year (November 5 – December 24), overall retail sales were up 5.5% as compared to 2009 levels, and online sales marked significant increase of 15.4% along with a record Cyber Monday sales of USD 1.028 Billion.  Shipping container traffic has also demonstrated positive increases at most major ports with Antwerp (+16.1% over 2009) and Los Angeles/Long Beach (+20.3%) suggesting increased optimism by retailers regarding future consumer demand.

 

SAP Customers Share Best Practices for Growth:

The SAP Retail Forum 2010 for the Americas was held in Las Vegas this past October.  Record attendance by over 200 participants and 54 retail companies and partners were engaged in timely retail topics and panel discussions on key retail trends:  mobility (for both store associates and un-wired consumers), access to real-time information, advanced analytics, and business transformation.  In addition to finding value in efficient operations and shared services, most retailers were also eager to explore increasing the top line revenues by empowering their workforce and mobilizing the enterprise.

 

It’s all about the Consumer:

This return to growth in retail is also adding greater focus on the consumer.  Consumer product companies are increasingly engaging directly with consumers, thus creating more options for shoppers.  Consumers can no longer be viewed in ‘channel silos’, they touch retailers across channels during a single transaction or shopping event.  Successful retailers are those that can bring a holistic, cross-channel view of the customer (see Retail Systems Research’s analysis of the technology, processes, and organizational requirements to get this done). 

Another aspect of consumer behavior is a desire to find the best deal out there.  Building on similar principles found in the social media platforms (such as Facebook, Twitter, and YouTube), there are more options for deal-starved shoppers: the local social shopping space.  In the past few weeks Amazon invested USD 175 Million in LivingSocial after having acquired another deal site, Woot.com, in June 2010.  Google, in late November and early December 2010, had offered up to a reportedly USD $6 Billion to acquire local deal site, Groupon, but was turned down.  Other companies are also offering deal search services such as in Yipit or are aggregating the local deals and coupons as in Dealgator

 

What’s Next?

In the 1998 American movie, Simon Birch, Jim Carrey plays the adult Joe Wenteworth who recounts that “time is a monster that cannot be reasoned with.  It responds like a snail to our patience and races like a gazelle when you are out of breath.”  Time is a competitive weapon (see RETAIL FUTURES: The Last Detail), and retailers are in competition on multiple fronts for consumers’ attention and share of wallet.  SAP for Retail provides a solid foundation to capture efficiencies and provide a platform for future growth; Promotion Management for Retail (PMR 7.1) has entered ramp-up and you will be finding new information in the Promotion page on the Retail Wiki in the coming weeks.  Event Highlights: SAP CRM Marketing Summit Montreal enable retailers to view their customers along multiple dimensions and begin a cross-channel journey; Empowering the Enterprise with  Real Time Data: OnDemand Webinar Replay and Download based on SAP BusinessObjects technology is turning all types of data into actionable insights which can be made available throughout your retail enterprise on any device;  an Enabling the Workforce – Mobile is a MUST for Today’s Retail Associates. is a first step to enabling superior customer service; InMemory computing, which powers the SAP High Performance Analytic Appliance (HANA), eliminates data latency and will create fresh opportunities in the running of the retail enterprise and  the massive amount of data generated. 

 

Retail is detail.  It is also about customer centricity, innovative technologies, mobility, and social platforms, among other things.  It’s not about perfection, rather it’s about going out there and doing it in quick cycles so you can learn and relearn faster than your competition.

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