Top Retail Industry Trends for 2011
As we embark upon a New Year, we are optimistic about the direction the retail industry is heading. Despite the economic downturn; we are seeing continued success with our retail clients. However, success has not happened over night - retailers have had to come to terms with a new breed of shoppers- he/she is smarter, more price conscious and relies on social media and mobile devices for their everyday needs. Over the last year, we have put our ears to the ground to listen to client needs, hopes and dreams for understanding this brave new consumer and embracing the next wave of retail technology. Following are some of our top predictions for the retail industry in 2011 based on our conversations:
· Discretionary spending will come back. There will be a slight pick-up in consumer demand but "cautiously optimistic" will be the general mood to describe consumer spending in 2011.
· Social media will evolve into a more organized business support model. Social media is a powerful and growing consumer shopping tool, especially in segments such as electronics. Social media will evolve into a business support model compared to the more "open ended" way most retailers look at social media today.
· Retailers will be looking to increase efficiency and reduce costs throughout their entire IT operations. IT spending will be up or stay flat in 2011. Some retailers will focus on infrastructure management. The majority of spend in 2010 concentrated on consumer-facing tools and services such as multichannel commerce and digital platform development. Retailers will continue to spend money in these areas and in areas such as business intelligence and analytics, supply chain and shared services.
· The focus will be on the consumer. Consumer awareness will continue to increase, and retailers will continue to focus on areas such as consumer insights/analytics, multichannel integration, social media and localization.
· Retailers will outsource back-end functions. Retailers have shied away from outsourcing over the last few years but with a renewed optimism in consumer spending, retailers will look to outsource back-end functions to focus on customer-centric activities.
What do you predict for the retail industry in 2011? We would love to hear what you think - please feel free to share your thoughts below.
We are looking forward to a great 2011, and hope yours is the same. We are very proud to start our year by recently being recognized as #1 among leading Retail IT Services Providers by the prestigious RIS IT Services LeaderBoard: http://www.infosys.com/newsroom/press-releases/Pages/retail-IT-services.aspx.
Comments
Thanks for sharing Madhu, this is a good read. A few other things to note-
1. With the advancement in mobile technology and prolification of smartphones, consumers will have high expectations around mobile commerce, which will enable them to make purchases, use coupens on their smartdevices. Retailers (and CPG companies) will invest in realizing mobility use cases.
2. Cloud will start to become mainstream. Retailers (and CPG companies) will look at cloud to reduce cost, derease complexity and improve flexibility and agility.
3. Private label which accounted for about 23% of the unit sales last year, will continue to be an area of investment for retailers.The strongest growth in the private label will happen in the club channel, where players like costco will lead from the front. However, private label will see a stiff competition from national brands, where the large CPG leadrs who will continue to focus on bringing to market a full range of CPG solutions, from value to premium tier.
Posted by: Syed Farrukh Jalal | April 13, 2011 4:29 AM