By Edahn Golan

 

A recent study shows that 83 percent of retailers expect to replace or upgrade point of sale (POS) software systems. Why? To provide real-time customer information at the time of sale.

 

At its annual convention in New York, “Retail Horizons: Benchmarks for 2003, Forecast for 2004”, the National Retail Federation released information from its second annual study conducted by its own NRF Foundation and BearingPoint.

 

According to the more than 100 retailers surveyed, the three currents of change of last year - “moving toward greater customer-centricity, traveling along the data-knowledge-action continuum and shifting toward a boundaryless business model” - were not only reaffirmed, but a fourth current was identified: the need for retailers to be on a greatly accelerated path to differentiate themselves from the competition.

 

This is not new, of course, but greater competition, more advertising and an increasingly skeptical consumer market that often treats marketing as “noise” demands more attention from retailers of the need to differentiate. “With continued momentum in the economy, now is the time for businesses to invest in new technology,” observes NRF President and CEO Tracy Mullin.  “The retailers who choose to invest today will be rewarded tomorrow.”

 

“As the competition increases, retailers need to figure out how they can differentiate even more,” adds Scott Hardy, a managing director with BearingPoint’s Retail/Wholesale practice. “Retailers are looking to POS in 2004 to provide real-time information to have a better understanding of the customer.”

 

It doesn’t end there. In the multicultural environment that is the U.S., where marketing tends to sometimes overlook it, about a third of the respondents to the survey say they will focus on multicultural marketing as well as on micro-merchandising.

 

Some of the other key findings of the study are that 74 percent of retailers segment their customer base by loyalty and 66 percent by customer preferences; 49 percent cite private label development as a priority; 82 percent list sales associate training as a key initiative and cost containment will be the number one priority for 2004.

 

So what should a retailer do, especially if it wants to differentiate itself from the competition? The NRF makes four recommendations:

• Leverage a robust understanding of the consumer to create unique, differentiated merchandise assortments
• Build a brand in an integrated way that resonates
• Provide a seamless, multi-channel shopping environment
• Build and sustain a high performance workforce.

Since we focus here on the web, let me emphasize that angle. The total Internet U.S. “population” numbered 152.1 million users who spent an average of 27.6 hours online and, according to comScore Media Metrix, the third top gaining category web site in December was the Jewelry, Luxury Goods & Accessories category.

 

In other words, many lucky gift recipients are now wearing or carrying the spoils of 100+ percent gains in shopper traffic to sites such as BlueNile.com, Diamond.com and Zales.com.

 

The top two leading categories, by the way, were Flowers, Gifts & Greetings and the Shipping category. It was the holidays, after all.

 

“Online holiday retail spending grew by 30 percent, to a record $12.5 billion,” says Peter Daboll, president of comScore Media Metrix.

 

“Consumers actively used the Web to buy online and guide their shopping offline, leaving their mark in traffic patterns across a range of retail categories from Flowers, Gifts & Greetings to Department Stores to Toys,” (!) Daboll adds.

 

This is an almost obvious conclusion if you are aware (and he is) that in November more than 11 million users visited jewelry and luxury goods web sites and in December the number leaped to nearly 15 million users.

 

It looks like the NRF conclusion that retailers should provide a “seamless, multi-channel shopping environment” is further reinforced here, giving an even greater push to create, at the very least, a click & mortar operation.