Business Trends

Posts Tagged ‘retail industry’

IT Spending Increases; Focus on Optimizing Processes for Fast ROI

In Uncategorized on February 25, 2010 at 12:35 am

A recent survey conducted by Altada Solution — a leading provider of software solutions for the retail industry — shows that IT budgets appear to be recovering after the initial downturn at the start of last year’s recession, with averages for all retailers at 1.3% of sales compared to 1% last year, while 26% of respondents expect their IT budget to increase; the same figure as last year. The company released findings from the 2nd annual Global Retail CIO Survey, jointly sponsored with IBM.

However, while last year’s survey showed that increase to relate to projects already underway, this year’s interviews revealed more aggressive plans to implement new systems. The survey of 109 retail CIOs and IT Directors in both the Americas and Europe was undertaken in Q4 2009 by retail industry research specialists Martec International.

This year’s Global Retail CIO Survey clearly shows that optimizing the product / place / promotion offer is becoming an increasingly critical element of retail IT spend. More than 50% of retailers will be upgrading, replacing or implementing new systems in areas such as Automated Replenishment (52%), Assortment Optimization (58%), Promotions Optimization (56%), Promotions Management (54%), with a further 46% looking to invest in Demand Forecasting. Master Data Management (MDM) has the highest planned implementation of all applications studied in the survey, both across the Enterprise (35%) and for Supplier Management (28%).

“The top line statistics from this year’s survey, and indeed last year’s, suggest that the retail sector has survived the recession remarkably effectively,” said Allan Davies, CMO, Aldata Solution. “The truth is, though, that while the downturn hasn’t halted retailers’ IT spend, it has certainly changed the way that money is spent. Gone are the days of end-to-end, rip and replace projects, and instead we’re seeing a big focus on process optimization. Retail CIOs are not afraid of investing in new projects, but they need to see a quick return on investment. And by quick, I’m talking about months, not years.”

Customer is King

Systems to attract and keep customers featured prominently in this year’s survey. Multi-channel CRM was ranked as the most important application by respondents, with 42% having yet to implement multi-channel CRM, but with plans to do so within the next three years. Similarly 38% of CIOs surveyed plan to implement Loyalty systems – with customer data linked to buying patterns and behavior – within the next three years. And finally, systems that support the safety of customers were considered the most important application by 47% of respondents.

Sustainability Not a Priority

For the first time, attitudes to sustainability were considered as part of the research. Respondents were asked to score the impact of sustainability on IT spend and strategy on a scale of 1 to 10 (with 10 being the highest). The average emerged as a lukewarm 5.1. Views appeared to be polarized, with 13% considering sustainability to have a negligible impact on IT strategy, while 6% considered it to have a major impact. In terms of which applications retailers feel are having the greatest impact on sustainability, applications for store operations came top of the list. For the future, more retailers believe that multi-channel retailing will have the biggest impact on sustainability.

Related Links: IBISWorld industry reports

Software Publishing Industry in the U.S.

IT Consulting in the U.S.


November Jobs Report Stirs Optimism But Economy Still Weak

In Uncategorized on December 4, 2009 at 6:30 pm

Unemployment data released today by the U.S. Department of Labor indicates that although job losses have slowed significantly, the economy continues to face challenges.

According to the report the U.S. economy shed 11,000 jobs in November, the smallest decline since the recession began in December 2007. The unemployment rate edged down to 10.0 percent. Retail job losses slowed to 14,500, compared to the more than 44,000 jobs lost in October.

“Today’s unemployment report gives hope to consumers and retailers that a recovery may not be far off. However, it is also a reminder that employers seeking to grow their workforces continue to face challenges,” said RILA President Sandy Kennedy. “Policymakers intent on stimulating job growth and the economy must focus on reducing the challenges employers face rather than erecting new barriers to job creation – which elements of the health care legislation under consideration threaten to do.”

The average of 87,000 jobs lost per month in the overall economy over the past three months is down considerably from the 700,000 per month pace of job loss at the depth of the recession.

The retail industry shed 14,500 jobs last month, an improvement over the more than 44,000 retail jobs lost in October and considerably better than the 90,800 jobs lost in November 2008. The retail industry averaged 33,000 job losses over the past three months, compared to an average of 70,000 over the same period last year.

Other economic data likewise show that the economy has begun to recover. Initial claims for unemployment insurance have fallen back to the level of last September before the worst part of the financial crisis, while increases in personal income and spending in October suggest improved prospects for families. The housing market remains weak but has stabilized, with home prices up over the past two quarters, and rising home sales whittling down the elevated inventory of homes for sale. Forward-looking surveys of purchasing managers suggest that the manufacturing sector has begun to expand, while orders for services firms are improving as well. Overall, GDP grew by nearly 3 percent in the third quarter of this year, and many forecasters believe it is on track for a similar increase in the fourth quarter. In sum, the economy remains weak, but a broad view of the data suggests that spending and incomes are on the rebound and that the job market is slowly turning upward as well.

“Today’s data confirm that the labor market is beginning to heal,” said Donald B. Marron, visiting professor at the Georgetown Public Policy Institute and RILA outside economist. “Layoffs have slowed dramatically in recent months, but new hiring remains restrained. Employers are adding hours but not yet jobs, though employment has increased in a few sectors, including temporary help services and department stores. We have a long way to go to get back to the strong economic performance that Americans have come to expect, but the economy and the job market are turning up.”

Health Care Reform and Jobs

Costly burdens, such as those imposed by the health care reform legislation passed in the U.S. House of Representatives, and the legislation currently under consideration in the U.S. Senate, could undermine economic recovery and cost more jobs for the retail industry, while also pushing insured retail employees from the health care plans they currently have and like.

“Congress simply should not pursue major initiatives that could add significantly to the cost and regulatory burdens faced by the retail industry, thus providing a disincentive to the hiring and business investment critical to ongoing economic recovery efforts,” said RILA president Sandy Kennedy.

Of specific concern are provisions within the Senate bill that would shift costs on to employers to pay for a public plan, reduce benefit-design flexibility and innovation, or not take into account the unique needs of the retail workforce such as separate treatment of part-time and holiday hires.