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Daniel Lucht offers a sneak preview of the 2012 retail analyst predictions up for discussion at Retail Business Technology Expo

Daniel Lucht offers a sneak preview of the 2012 retail analyst predictions up for discussion at Retail Business Technology Expo
Friday March 2 2012

Research Farm is a fast-growing analyst firm with a focus on delivering strategic insights on topics and trends in the retail and fast-moving consumer goods (FMCG) space. By Miya Knights

Following the success of its first Retail Predictions report last year, it will unveil this year’s findings at the upcoming Retail Business Technology Expo. Daniel Lucht talked Multichannel Insights exclusively through the main trends to watch.

Daniel Lucht, research director of Research Farm, should know how important future gazing is to retailers. Having worked in other established retail analyst firms, he and his Research Farm colleagues’ previous experience is proving essential in helping them understand how external pressures are going to effect business in the short to long term. “These include political, economic, legal, technology, environmental and social factors,” he said.

Uncertainty fuels growth challenges

Overall, Lucht said ongoing political and economic instability would continue to create an austere outlook for retailers during 2012: “There are major elections in the US, France, Russia and China, while the euro crisis is ongoing and developments continue out of the ‘Arab Spring’.” Although he added that retailers were looking to international growth to supplement stagnating domestic sales, he warned: “There is a huge move away from debt-financed growth, so factors like new infrastructure development of roads, communications and other local public or private investment will be important factors in shaping growth strategies in places like Europe, India and the Middle East.”

The analyst also cautioned that economic pressures around inflation and their impact on already squeezed disposable consumer incomes would see grocery retailers in particular focus on private label development. “This year is going to be all about price again, which really brings the technological aspect for retailers into play,” he added, explaining that direct comparisons between own-label products and market leaders were not as easy for consumers to assess using price comparison shopping sites.

“Technology will be absolutely vital for retailers, particularly instore,” Lucht continued. “It is also likely going to be the year of m-payments, but I don’t think anyone is sure which standard will win – NFC [near-field communications], PayPal or Bluetooth. The other thing is Wi-Fi instore, which is an enabler for the likes of PayPal. It [Wi-Fi] also offers the possibility of influencing directly purchasing behaviour, by sending personalised offers to shoppers’ smartphones when they are in a particular aisle, for instance.” But he said these kinds of initiatives need calibrating carefully, so as not to erode margins or bombard customers.

Managing multichannel data proliferation

The growing adoption of technology-enabled multichannel, mobile and personalisation trends will also drive management IT requirements, according to the predictions. “Behind these new technology enablers, big data capabilities and loyalty schemes are going to be big, so retailers can recognise customers and know what they really like.” Data will also be essential for fine-tuning offers and assortments across channels: “The supply chain has to become more efficient to react to demand in different channels just in time,” he said.

Balancing the needs of multichannel growth in constrained times will require well thought through retail business and IT strategies, Lucht concluded. “Cashflow is going to be a big issue,” he said. “We are going to see more casualties. And, when it comes to technology, it will not just be about what retailers want to offer customers, but more so about what they can afford.”

Romain Cieslewicz, Research Farm sales and marketing director will present the Research Farm 2012 Retail Predictions at 11.40am on Tuesday 13 March in Theatre B of main seminar programme at Retail Business Technology Expo.

Miya Knights is Editor of Multichannel Insights, a weekly news service from The Retail Business Technology Expo 2012

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