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I N SI D E:

Study Methodology Four Forces of Change Responding to Opportunity Reshaping the Store The Art of Seamless Commerce Successful Synchronization

Retail at the speed of change

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PUBLISHER David Weinand 904.374.8590 dweinand@edgellmail.com SA LE S Associate Publisher Catherine J. Marder 603.672.2796 cmarder@edgellmail.com Senior Account director Lisa Wallace 904.217.3489 lwallace@edgellmail.com Senior Account director Ashley Ramirez 904.372.4017 aramirez@edgellmail.com Assistant to the Publisher Jen Johnson jjohnson@edgellmail.com EDITORIAL Group Editor-in-Chief Joe Skorupa jskorupa@edgellmail.com Executive Editor Adam Blair ablair@edgellmail.com Associate Editor Nicole Giannopoulos ngiannopoulos@edgellmail.com Online VP OF ONLINE MEDIA Robert Keenan rkeenan@edgellmail.com Web Development Manager Scott Ernst sernst@edgellmail.com Director of Lead Generation Jason Ward jward@edgellmail.com Online Event Producer Whitney Ryerson wryerson@edgellmail.com ART/PRODUCTION Creative Director Colette Magliaro cmagliaro@edgellmail.com Art Director Lauren Cloos lcloos@edgellmail.com production Senior Production Manager Pat Wisser pwisser@edgellmail.com Subscriptions 978.671.0449 Reprints: edgellreprints@parsintl.com 212.221.9595 CORPORATE CEO/Chairman Gabriele A. Edgell gedgell@edgellmail.com President Gerald. C. Ryerson gryerson@edgellmail.com Vice President John Chiego jchiego@edgellmail.com CORPORATE Office Edgell Communications 4 Middlebury Blvd, Randolph, NJ 07869 973.607.1300 FAX: 973.607.1395
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w h o r esSpEon ed C Td IO N

Study Methodology
G a in i n g t ech n ol ogy i n si gh t fr om C - l ev e l r eta i l executi ves This years study is based on input from people who are senior-level decision-makers within their own organizations. The respondents also represent retail companies that, due to their size, exert considerable influence on retails technology trends. These executives exhibit both responsibility and authority to set their companies IT and business agendas, and their insight gives the study its unique hallmark. To provide a valuable cross section of the industry, respondents are invited to participate based on careful retailer selection, job title, revenue segment and retail category. Unlike some other studies, the focus is on senior-level decision makers. 17% of all survey respondents are CIOs and another 10.4% are C-level executives. The remainder of respondents include business leaders who are senior level executives without technology titles but who have significant responsibility for IT, including directors of IT (39.6%) and departmental managers (33%), together accounting for just about three-quarters of the survey pool. Since large retailers play an important role in driving IT trends, they have large technology budgets and are a representation of the industrys overall spending. Many revenue levels are represented, ensuring that the study is an accurate representation of the diversity in the industry. The respondent pool is made up of 11.3% that have more than $10 billion in revenue and 30.2% that have between $1 billion and $10 billion. The study also represents retails diversity with verticals such as apparel/footwear/accessories, specialty, hard goods, C-store/drug/grocery, department stores/ mass merchandise/big box discounters and direct (catalog and e-commerce). The largest verticals represented are apparel/footwear/accessories at 23.5% and specialty at 20.8%, which themselves include a broad and diverse mix of assortments and business models.

job title
10.4%
CxO Departmental Mgt.

33%

17%
CIO

Director IT

39.6%

Retail Segment
23.5%
Specialty

20.8%

Apparel/ Footwear/ Accessories

Hard Goods Dept. Store/Mass Merchandise/ Big Box Discounter

18%

6.6% Direct 16.1%

C-Store/ Drug/Grocery

(Catalog & E-commerce)

15%

Annual Revenue
11.3%
>$10 B

23.6%

<$50 M USD

30.2%
$50 M to $250 M $250 M to $500 M

12.3%

$1 B to $10 B

7.5%

12.3%
$500 M to $1 B

A BO UT G A R TNER
Member

Gartner Research is a leading provider of research and analysis about the global information technology industry. It worked with RIS to bring out this study, which was conducted during the first two months of 2013 . In conjunction with the RIS editorial team, Gartner created the survey and posted it online. Gartner performed the analysis of the data and was then interviewed by RIS on the meaning of the data. Gartner was not paid for its involvement and RIS did not involve any of the advertisers in the report during the preparation or analysis phases.

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EXECUTIVE SUMMARY

Four Forces of Change

a whirlwind of new capabilities will either strengthen retailers or level them By Jeff Roster

he era of true retail innovation has arrived, which Gartner calls the Nexus of Forces. In this view businesses are built on four big pillars: Cloud, Mobile, Social and Information. These forces join together in a whirlwind that will either recreate businesses or level them. Lets be clear about this. In my opinion retailers have always been extremely innovative. Thats the main reason the industry has so many home-grown systems. Retailers historically were not satisfied with the functionality of packaged applications and chose to develop their own software. This was absolutely the right decision at the time. The challenge now is that when former cutting-edge functionality gets old it can be a roadblock inhibiting the ability to develop cross-channel capability. This roadblock leads to a search for solutions and into the mix of options retailers discover the transformative power of the Cloud. With Cloud capabilities, formerly conservative adopters of technology have the ability to jump forward and end up with a 21st century infrastructure, which is both more nimble and more cross-channel enabled. And this is possible to achieve at a lower cost to operate. This possibility suddenly opens up new options and also raises additional questions, such as: Do Cloud investments come first or should

Major Action items over the next 18 months

Developing a mobile enterprise and/or store strategy Expanding multichannel (synchronization) initiatives Developing a mobile commerce strategy Campaign management and promotions effectiveness Leveraging social media Adopting a unified enterprise platform Cost containment

42.5% 41.5% 30.2% 24.5% 20.8% 19.8% 18.9%

Top 10 Technologies for 2013

Campaign analysis & forecasting Standard Forecasting & planning Mobile POS Predictive analytics In-store pickup or return of web goods Multi-channel planning & forecasting Campaign management Allocation Assortment planning POS peripherals

50% 43.4% 42.5% 42.5% 41.5% 40.6% 40.6% 39.6% 39.6% 36.8%

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Mobile be first? How do we harvest real insights out of the Information weve warehoused for so many years? And where does Social fit into the puzzle? The answers to these questions will dictate retail success in 2013 and beyond. Welcome to the Nexus and good luck. Ma jo r A c t i o n It e m s Mobility has moved to the mainstream or forefront of retail strategy, which is no surprise because its been buzzed about for several years. But this years data indicates we are now seeing real adoption. The hype is gone, the reality is here, and retailers are moving forward aggressively with mobility as a key strategy. Social media slipped down on the priority list of major action items this year from the top perch to fifth. But thats not a bad thing. We are still quite early in the serious adoption phase and I expect it will rise higher as the Chief Marketing Officer continues the digitization of retail marketing budgets. The rise of the CMO is clearly evidenced in the 14% of the respondents who have made a top priority out of providing marketing departments with advanced IT tools. Some retail IT departments could see this rise as a new competitor for scarce budget resources. That would be a mistake. I believe its critical for the CIO to lead the charge in empowering marketing with the tools for cross-channel success. Pain s to O v e rc o m e Retiring legacy systems: This is a datapoint that has gotten tremendous attention from both retailers and vendors alike. Vendors view this as an opportunity and it is. But theres a clear

EXECUTIVE SUMMARY

Top Challenges over the Next 3 Years

Retiring legacy systems Developing applications to satisfy empowered consumers Application integration Managing big data Optimizing stores as a major channel Consumer smart devices in the enterprise Upgrading store-level bandwidth and infrastructure PCI compliance Mobile security

45.3% 41.5% 38.7% 36.8% 32.1% 29.2% 23.6% 17.0% 12.3%

warning here because some vendors and their solutions are on the wrong side of the retirement trend. Its an equally serious warning to retailers, because it indicates that competitors are aggressively improving their capabilities. The key question for retailers to ask is: Are you ready to engage in the business of retail with a competitor who has improved every aspect of its business and is operating in a cross-channel mindset? If not, now is the appointed hour to remedy the situation. Empowered consumers: Retailers are now dealing with a consumer that has better knowledge than associates and consumers also have direct access to competitors while standing in your store. But instead of whining about showrooming, smart retailers are aggressively battling back and pre-

paring to give customers access to greater information and services. This is heralding a new era for retailing. Hopefully its not too late. Con clusio n The year ahead for retailers is filled with challenges, opportunities and critical decisions. Successful retailers will have to build innovation and risk taking into their organizational DNA or risk obsolescence or worse, irrelevance. The old adage, failure is not an option, is exactly the wrong recipe for success in the new social/mobile enabled enterprise. You learn from failure. Retail success has always been through innovation, determination and no small amount of luck. In this new era we are entering, successful retailers will need all three in abundance.

Jeff Roster is vice president industry market strategies, retail for Gartner. This is the 13th year he has been the chief analyst for the Retail Tech Trends Study.

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IT BUDGETS

Responding to Opportunity
Examining the gap between success and survival in the age of retail transformation B y J o e S k o r u pa uring the Great Recession Warren Buffet noted that when the tide goes out you see who is swinning with pants and who isnt. During the downturn, some without pants found cover and some didnt. For the latter, exposure was both embarrassing and costly. Today, the tide is rushing back in and a different phenomenon is taking place. Now we see who has a foundation that can manage the flood and who will get washed away. The thing about foundations is they need consistent shoring up or they weaken over time. The rise of smart, digital shoppers and introduction of disruptive technologies over the last couple of years have weakened the foundations for some retailers by undermining the traditional strengths of their core business brick-and-mortar stores. A major undermining force comes from online pure-play retailers who have perfected the art of leveraging their inherent advantages. Until recently, traditional retailers essentially ignored the threat, reasoning that Internet sales were a relatively small part of the overall revenue pie. When Internet sales get larger, so the reasoning went, it will be time to stop dabbling and sink major investments into it. That time has arrived. But after

IT Budgets as a Percent of Total Revenue

30.2%

11.3%

10.4% 6.6% 1.9% 7.5%

<1%

1% to 2%

2% to 3%

3% to 4%

4% to 5%

>5%

Change in Year Over Year IT Budget

28.3%

26.4%

16%

16%

4.7%

3.8%

4.7%

Decrease >10%

Decrease between 5% to 10%

Decrease between 1% to 5%

No Change

Increase between 1% to 5%

Increase between 5% to 10%

Increase >10%

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years of online experimentation and maturity by pure-plays, a new phenomenon has emerged and suddenly traditional retailers see that pure-plays are beating them to growth opportunities. Not only that, but pure-plays are also investing heavily in disruptive technologies to hijack market share from traditional retailings core business brick-andmortar stores. In the age of retail transformation the spectrum of opportunity ranges from success on one end and survival on the other. The deciding factor is the strength of the retailers foundation. A m a z o n Is N o t t h e P r o bl e m Its tempting to single out Amazon as the traditional retailers arch-enemy, but larger forces are at work. Pure-play retailers as a group have a start-up mentality that drives them to be first to market with innovation. They are adept at developing state-of-the-art websites, exploiting low prices, pioneering advanced analytics and perfecting high-speed fulfillment. Their aggressiveness is backed by large technology investments and a willingness to learn from failure. A business model of this type chips away at the foundations of traditional retail brands, who with few exceptions have not made the necessary financial commitments to match fire with fire. But there is evidence of change. Retailers like Walmart, Target, Nordstrom, Macys, Urban Outfitters and Saks, to name several leading examples, have converted their omnichannel strategy from a buzzword into a plan of action. Each has recently reported strong financial earnings that

IT BUDGETS

Maturity of IT Architecture 19%

Advanced IT infrastructure/ systems w/ deep integration

13%
Basic IT infrastructure systems w/ critical limitations

Mostly advanced IT infrastructure/ systems w/ some gaps in integration

36%

32%

Mostly basic IT infrastructure/ systems w/ some advanced upgrades

Architecture Approach to Software

Seek best of breed software Seek integrated solutions suites Seek software-as-service models Use third-party services to help develop software Use in-house IT resources to develop software

57% 51% 39% 36% 31%

indicate they are reaping monetary rewards for their efforts. As we examine this years IT budget trends we find that retailers, led by those cited above, are increasing their tech investments in 2013. This is a positive sign, but perspective is needed. Note that retail tech investments are made in the millions of dollars with a capital M. Amazons tech investments are made in the billions of dollars with a capital B. From this perspective retailers with the best chance of making up ground against aggressive pureplays are those investing in technology at levels above the industry average, which is less than 2% of total

annual revenue. From the data in this years study we see that the group of above-average tech investors comprises 26.4% of retailers. This aggressive group is composed of a spectrum of retailers that ranges from slightly above average tech investors, those committing 2% to 3% of revenue to technology (10.4% of the respondent pool) to those that are committing more than 5% of revenue to technology (7.5% of respondents). Obviously, the latter group is taking an aggressive stance and will likely become better positioned to capitalize on the forces of change sweeping through retail.

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Drilling one level deeper into budgets, we see that few retailers are actually planning to decrease spending on IT, just 13.2%. But a much larger group plans to go through the year with a flat (no increase) budget projection 28.3%. That means that 58.5% intend to increase their IT budgets year over year, which is 5 points higher than last year. As previously noted, the important fact to consider is not just that retailers are investing more in technology year over year, but how much more they are investing. Is it enough to maintain status quo when you factor in inflation and the cost of opening new stores? Is it enough to close gaps with competitors? When looked at through this lens we see that 32% of retailers are aggressive IT investors, meaning their budgets committed to IT are rising at an above average level. This group consists of 16% who will increase IT budgets 5% to 10% year over year and 16% who will increase their IT budgets more than 10%. The good news is this aggressive group of 32% is nearly twice as large as it was last year (17%). I T S t rat e g y If retailers were making steady investments in their IT infrastructure in such areas as advanced upgrades and deep integration, we would expect to see year-over-year progress in the maturity of their architecture, applications and tech stack. To be able to track this progress we would need to ask the same question in the same way each year, and we have done that. On the lowest step of maturity, which we call basic IT infrastructure and systems, we see 13% of respondents, which is down slightly from last year. One step up is called Microsoft IBM Oracle SAP Cisco Systems JDA Deloitte HP NCR Accenture

IT BUDGETS

Top 10 IT Service providers Retailers Seek for Strategic Insights 41.5% 37.7% 30.2% 26.4% 23.6% 15.1% 13.2% 12.3% 11.3% 10.4%

The archit ecture m aturit y m od e l s h ow s a picture of em erging st rength for a m ajorit y of retailers.
mostly basic with some advanced upgrades. Here we see a dramatic reduction from 45.7% in 2012 to 32% in 2013. So, clearly, retailers are moving out of these two lower steps on the maturity ladder. The biggest gainer in this maturity model is called mostly advanced but lacking comprehensive integration. This jumped from 22.9% last year to 36% in 2013, a huge leap. And in the final step, called advanced IT infrastructure with deep integration, we see a rise of two points year over year. The data shows a picture of emerging infrastructure strength for a majority of retailers. Those on the lower rungs of the ladder will be facing stiff headwinds. As the retail tech stack evolves so does the architecture approach to software. Seeking best-of-breed software (chosen by 57%) has been the top approach chosen by retailers for many years because it offers the most flexibility. Using IT resources to develop software has also been a top approach, and last year it came in second place, just two points below the best-of-breed option. But this year developing software in-house drops far down the list and was selected by just 31% of respondents. This datapoint indicates another kind of maturity taking place in retail technology the maturity of packaged software solutions to deliver what retailers want. Previously, retailers had been forced to write their own software to get the retail-specific solutions they needed. But this is no longer the case for more than two thirds of retailers. As the whirlwind of change plays out in retail, it will reward those who are investing wisely to shore up their foundations. For those who had been investing wisely and consistently over the last several years, the rewards will be even greater.

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STORE SYSTEMS

Reshaping the Store

M OB IL ITY, R F ID A ND CU S T O M E R L OYA LTY I N VESTM EN TS EN H A N CE STOR ES PI V O TAL RO LE By Adam Blair

he store remains a key focus of technology investments and the reasons are obvious: despite the impressive growth of digital channels, stores are still where the vast majority of transactions take place. But a funny thing is happening to store IT as retailers move closer to a seamless omnichannel operating model. Retailers are beginning to use store technology not just to sell more products but to learn more about their shoppers, as demonstrated by high levels of current activity and future interest in frequent shopper/loyalty programs and shopper tracking capabilities. The desire to gather as much information as possible during a customers store visit makes sense. As stores become just one channel among many that todays consumers use on their path to purchase, retailers are importing the data-gathering and analytics theyve used in the digital world into the brick-and-mortar sphere. POS on the M ove One major theme in this years study is the accelerating move to mobility, in this case to mobile point-of-sale. Nearly three in 10 respondents have already invested in mobile POS, and another 22.6% say they are planning to invest in 2013. However, it should be noted a solid 35.6% say they have no mobile

Status of POS Technology

POS terminals (traditional, fixed) POS peripherals POS software Self checkout terminals 8%

47% 39% 39% 14% 6% 5% 28%

15% 17% 18%

15% 8% 20% 18% 11% 14%

Mobile POS 6% 14%

18%

Up-to-date tech in place Will start major tech upgrade in next 12 months
Status of Item-Level RFID

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months

Item level RFID

4%

6%

5%

14%

Up-to-date tech in place Will start major tech upgrade in next 12 months

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months

Does your organization plan to invest in mobile point of sale (POS) in 2013?

12.3%
Don't know

29.2%
Yes, already investing

35.8%
No

22.6%
Yes, planning to invest during 2013

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POS plans, reinforcing the point that there are retail environments where this technology does not appear to add value at this early phase. One in four (25.5%) of respondents say they will decrease the number of fixed POS units in stores as a result of their mobile POS investments, though nearly two-thirds say they will not, implying that in many store settings, mobile POS will be an addition to, rather than a replacement for, traditional POS. Do these trends spell a slow demise for traditional POS systems? Certainly not. Spending plans remain solid and will remain that way as fixed-POS stations evolve. One way to describe the planned decrease in fixed-POS stations is right sizing. In many stores all POS lanes are intermittently manned. The addition of mobile POS to the mix enables retailers to serve customers during sales peaks while simultaneously removing rarely used lanes. Nearly half (47%) of respondents have up-to-date POS terminal technology in place, and 39% are up to date with their POS software and peripherals. The percentage of retailers with upgrades already in progress is in the high teens for all three technologies, and is at similar levels for those planning upgrades during the next 12 months. RF I D Ri si ng Another area showing both progress and promise is item-level RFID. In recent years, major retailers have not only gotten on board but strongly publicized this technologys benefits. The change can be seen from the 2012 Tech Study, when only 1% of respondents had up-to-date technology, to the 4% that are up to date this year. An impressive 14% of re-

STORE SYSTEMS

Will your organization decrease fixed POS units in stores during 2013 due to mobile POS investments?
10.9%
Don't know

25.5%
Yes, plan to decrease fixed POS

No plans to decrease fixed POS

63.6%

Status of Store Technology

Frequent shopper or loyalty program Store level loss prevention Kiosks Shopper tracking capability Store level task management

29% 25% 19% 19% 17%

21%

12%

19%

14% 8% 16% 8% 10% 13% 16% 11% 19%

11% 12%

21%

Digital signage displays 10% 13% 9% 14% NFC (Near Field Communication) payments 5%11% 7% Electronic shelf labels

20%

6% 14% 3% 3%

Up-to-date tech in place Will start major tech upgrade in next 12 months
tailers plan an RFID upgrade within 12 to 24 months. This years other star technology is actually an old retail standby, the frequent shopper/loyalty program: it tops the list of current up-todate store technologies at 29%, and also shows strong figures for current and future investment (a total of 30% within the next 24 months). Learning as much as possible about individual customers is seen as critical to customer engagement and the

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months
more targeted, personalized marketing necessary in todays information-saturated age. Retailers are also turning a more analytical eye on the way customers shop their stores, as reflected in the strong figures for shopper tracking capabilities. These technologies have advanced far beyond traditional traffic counting and can provide important insights into staffing, merchandising, marketing and customer service.

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B y J o e S k o r u pa

The Art of Seamless Commerce

climbing up the maturity ladder to synchronize the shopping experience across channels ntil a few years ago, ecommerce operated as if it were on the edges of the retail enterprise, somewhat similar to a surprisingly successful startup or large pilot program. The revenue generated by e-commerce in this view was thought of as additive to the core business but not really part of the core itself. This mentality also extended to how e-commerce technology fit into the tech stack. But those days are rapidly drawing to a close. A number of retailers recently reported 50% year-overyear increases in online revenue capping several years of double digit growth. When revenue figures travel an upward arc like this they begin to attract serious attention and so do the efforts to more closely integrate digital channels into the core business. When we examine this trend over the last two years we see that significant progress has been made in e-commerce maturity and mobile channel development. One way to track e-commerce maturity is to check the upgrade status of the e-commerce platform, the basic building block of online retailing. If retailers are steadily investing in e-commerce capabilities we would expect to see signs of maturity emerge in upgrade status over time, and we do. Last year, for example, 16.9% of retailers said they dont have an ecommerce platform and this year the number drops to 14.2%. Even more

Status of E-Commerce Platform

27.4% 14.2% 7.5%

Re-platformed within 2 years, no need to upgrade

We don't have an e-commerce platform Platform needs updating, but no plan to upgrade

7.5%
Plan to upgrade within 24 months

28.3%
Currently upgrading platform now

15.1%
Plan to upgrade within 12 months

Status of organizations customer facing mobile channel development

9.4% 17.9%
Not planning any activity

Fully functioning mobile commerce strategy in place

Pilots in progress

28.3% 44.3%

Planning under way

dramatic is the number of retailers who say they have replatformed within the last two years and therefore have up-to-date technology 27.4% this year compared to 18.3% last year. In the mobile channel we can see that progress is moving steadily forward, but not at a brisk pace. The reason for the measured pace is that current sales volumes in the mo-

bile channel are still low compared to overall sales. Where we see the most activity is the datapoint for pilots in progress 28.3% this year compared to 24.1% in 2012. Although many in retail have dubbed 2013 the year mobility becomes a reality, it is also true that it will take several years before it fully enters the retail mainstream.

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Successful Synchronization
Tightening the linkage between merchandising and the supply chain B y J o e S k o r u pa etail organizations are composed of a number of departments that rely on each other to share information in a symbiotic relationship. When the departments are synchronized the enterprise is capable of delivering a greater level of performance than the sum of its parts. But interdepartmental linkage goes deeper than that. In many cases, the output of one department is the input for another. For example, in a car company the engine for a vehicle is built in one plant and shipped to another plant for final assembly. If the engine plant is running behind, then a chain reaction occurs and the production of finished vehicles will get delayed. This concept, which is also a force at work in retail enterprises, is known as interdependence, and it is especially evident in the linkage that occurs between the merchandising and supply chain departments. M e r ch a nd i s i ng a nd S upply C h ai n P rio riti e s The process of replenishment of products to stores is a perfect example of interdependence between merchandising and the supply chain. It is so critical to store performance that 33% of retailers have made it a point to keep their replenishment technologies up to date, the highest level of up-to-date tech on the merchandising priority list.

Status of Merchandise Technolo gy

Replenishment Item management Forecasting and planning New product or private label development Allocation Category management Assortment planning Price and markdown optimization Product lifecycle management Campaign analysis and forecasting Shelf and space planning Campaign management Multi-channel planning and forecasting

33% 25% 24% 24% 21% 21% 19% 19% 17% 15% 12% 9% 8% 19% 21% 16% 13% 21% 17% 23% 15% 14% 25% 18% 25%

21% 17%

11% 8% 19%

10%

13%

14%

8% 19% 7% 11% 12%

15% 17% 16% 15%

15% 13% 25% 16%

14% 20% 25%

8% 12% 22%

Up-to-date tech in place Will start major tech upgrade in next 12 months

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months

A substantial number of retailers (21%) also say they have begun but not finished major upgrades to their replenishment systems. This means that more than half of retailers (33% up-to-date plus 21% with projects underway) have been involved with upgrading their replenishment systems within the past few years. This is a large amount of IT activity and it is indicative of how important re-

plenishment is to meeting sales and merchandising goals. Three other items on the merchandising priority list deserve special notice. They are campaign analysis and forecasting, campaign management, and multi-channel planning and forecasting. These three are noteworthy from a data analysis perspective because they register the highest levels of future

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M E R C H A N D I S I N G & S U P P LY C H A I N

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say they will be upgrading within 24 months. A close second is social media analytics (43% upgrading within 24 months), which is not only the newest kid on the block, but perhaps the most difficult to effectively manage.

investment plans in the merchandising category and, just as significantly, all three are important to marketing executives, the new center of gravity in retail organizations. Campaign analysis and forecasting not only registers strong current activity (with 25% saying they have already begun upgrades) but it also shows strong plans for future deployment 25% say they will start within 12 months and another 16% in 12 to 24 months. Campaign management is equally strong with 21% working on upgrades now, 20% who will begin in 12 months, and 12% who will begin in 12 to 24 months. Multi-channel planning and forecasting, often referred to as an omnichannel strategy, lags in current activity (16% deploying now), but strong future intentions will enable it to quickly catch up 25% will deploy within 12 months and 22% will begin in 12 to 24 months. In supply chain trends we see confirming evidence that multi-channel strategies are gaining traction, especially in the area of multi-channel fulfillment. Here we see that 18% plan to begin deployment of an upgrade within 12 months and 22% will begin in 12 to 24 months. All of these technologies are worthy of singling out because their numbers are significantly higher than the others on merchandising and supply chain priority lists. But when we look at a related area of demand-chain technology, business intelligence and analytics, we see numbers that are even higher. In fact, as a group BI and analytics shows the strongest set of purchase intentions across the board of any other

technology grouping in the study. The lowest rated technology for future investment, for example, is market basket analysis, where 29% of retailers say they will be upgrading within 24 months. The highest is predictive analytics, where 46%

Status of BI/Analytics Technolog y 25% 21% 19% 18% 18% 21% 22% 16% 16% 25% 17% 16% 15% 17% 21% 26% 13% 20%

Market basket analysis Shopper tracking Margin optimization

Predictive analytics 10% Social media analytics

9%

Up-to-date tech in place Will start major tech upgrade in next 12 months

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months

Status of Supply Chain Technolog y

Warehouse management systems Distributed order management systems Transportation management systems Sourcing Real time inventory visibility Multichannel fulfillment Trade promotion management Radio frequency identification (RFID) case/pallet

32% 24% 24% 22% 20% 16% 8% 12% 7% 8% 9% 13% 14% 13% 14% 16% 17% 2%

16% 8% 8%

11% 18% 13%

8%

10% 11% 19% 18% 10% 17% 22%

Up-to-date tech in place Will start major tech upgrade in next 12 months

Started but not finished major tech upgrade Will start major tech upgrade in next 12-24 months

RIS

RETAIL

TECHNOLOGY

STUDY

2 0 1 3

APRIL

2013

19