Third year of global Retail CIO research reveals customer insight leapfrogs promotion management in key priorities
Third year of global Retail CIO research reveals customer insight leapfrogs promotion management in key priorities
The results of a third annual survey of retail chief information officers (CIOs) have revealed that retailers are suffering from ‘promotion fatigue.
Instead, almost half (46%) surveyed plan to switch their attention to gaining a 360-degree view of their customers (in-store, online, and via catalogue), following two years of focusing on promotions.
The research, conducted by specialist researcher Martec International among more than 130 retail CIOs globally, found that after the initial emphasis on promoting products through the current recession, retailers are now turning their attention to better understanding buying patterns and improving margins.
Fighting for customer spend
Allan Davies, chief marketing officer of the report's sponsor and retail and distribution software provider Aldata Solution, commented: “The ongoing economic situation has altered the way the retail industry operates and forced a change in tactics in the fight for customer spend. Promotion management changing from the number one investment priority in 2009, fourth in 2010 and ninth in 2011, is just one example of this change in tactics.
“Going forward into 2011 and during the coming three years, ‘promotion fatigue’ will give way to more focus on understanding consumer buying behaviour better and getting a full view of what, how, and where, customers are buying,” said Davies.
Forecast for demand
Other key findings show that, as the cost of raw materials and fuel dramatically increased, 39% of CIOs will invest in enterprise demand forecasting to reduce overstocking and optimise the frequency and delivery of supplier orders to meet customer demand, and further reduce transport and wastage costs.
Davies concluded: “The 2011 survey clearly shows that retailers are now prioritising customer knowledge and optimisation of their supply chain and demand forecasting over even more promotions. The new competitive edge is enabling customers to buy exactly what they want, when and how they want it and manage the goods flow more efficiently. “
The 2011 Aldata Global Retail CIO Survey was conducted among retailers from 26 countries generating from $50 million (£30.3m) in annual revenue, and whose combined sales represent $555 billion (£336.3bn) from more than 117,000 stores; which equates to 8 percent of the total retail market in the Americas and Europe by sales.
