KPMG partner discusses retail investments, data analytics and holiday trends
If you haven't had the chance to take part in NRF's annual 'State of the Industry' survey yet, you've got one more week to make sure your organization becomes a part of next year's widely read report. Retail Horizons: Benchmarks 2011 - Forecasts 2012, a joint project between the NRF Foundation and KPMG, annually assesses retail industry trends and offers valuable insights into what retailers are planning in the boom times and how they’re adapting plans in tougher times.
Mark Larson, Partner from KPMG U.S. and Global Retail Industry Leader, shared more about the insights previous surveys have offered, discusses what retailers can expect this holiday season, and outlines the findings from a recent ‘snapshot’ survey of retailers.
In your recent Retail Industry Pulse Survey, you found retailers were anticipating modest improvements in the economy, revenue and employment in the next year. Clearly investment and development still goes on, so what are retailers investing in while they wait for a stronger recovery to take hold?
Nearly half of the executives indicated they intend to increase spending in information technology over the next year, by far the highest priority investment area, according to our survey. Other significant areas of investment for retailers are geographic expansion, investment in new products and services, and acquisition of a business. The good news is that many retailers have significant cash to invest and they are putting it in play. Over 70% of executives said they have a “great deal” of cash on their balance sheets, and 44% say they’re already investing that money or will do so before the year closes.
Obviously data analytics are becoming increasingly important to retailers as they strive to make every interaction with consumers more effective. Your survey results showed data analytics moving “far higher as a leadership agenda item with each passing day.” How does better analysis of customer data help retailers, and how can retailers use customers’ data to overcome some of the challenges they're facing?
Nearly 70% of the executives regarded data analytics as a “core component of strategy and planning.” With consumer behavior, spending and demographic profiles changing rapidly, a key to success will be investing in technology to harness the vast amount of data that resides in a company. That data can drive the insights that will allow retailers to interact with consumers more effectively and capture more ‘wallet-share.’ It may also reveal information on new markets, new strategies and new operating models that will ultimately generate growth and profitability.
Going into the holiday season, what are your expectations for how retailers will fare?
I believe there may be a small uptick in sales this holiday season, but the increase will be less than last year’s. Continued high unemployment, stagnant wages, reduced credit, and higher savings rates will cause consumers to keep a tight hold on their wallets.
However, as social networks and mobile applications continue to play a larger role in the shopping process, I foresee online activity will again influence in-store shopping this holiday season. Consistent messaging between the brick and mortar stores and a retailer’s online applications will be very important to ensure the consumer’s experience is positive.
How have retailers used the Retail Horizons survey in the past?
Retailers use the insights gleaned from Retail Horizons to help gauge how their policies, people and technology compare with their peers, and to identify trends that may impact their business in the coming year. The information is also used to validate and prioritize investment in the core areas of their organizations.
What have been the biggest headlines for you from the Retail Horizons reports over the years?
Last year we saw that after a very difficult 2008 and 2009, and continued sluggish demand, retailers were able to staunch losses and stabilize profitability. This stabilization was in part due to a continued focus by many retailers on efficiency and process improvements. Top-line growth objectives focused on the share of wallet battle among retailers, resulting in more personalized marketing strategies, multi-channel integration, and an overall focus on customer experience. In the 2010 survey, retailers planned for growth to be at the top of their agendas for the following year, and, based on what we’ve seen in the market thus far, I believe this priority will be mirrored in 2011 Retail Horizons responses.
As many as 690,000 new seasonal employees could be hired this year. How this compares with years past.… https://t.co/gwLYyvdXlW2 days ago