360 DEGREE CUSTOMER VIEW- 2010 TRENDS IN STORE SYSTEMS TECHNOLOGY

The recession of 2008 - 2009 has had a significant impact on much of the global economy and for much of North America. The loss of wealth and the weakened economy has affected jobs and consumer demand which has rippled through our supply chains effecting manufacturing, consumer products firms, wholesalers, and retailers. On the retail side one of the outcomes has been to significantly reduce investment in Store Systems technology. The demand for new POS Hardware is low with POS Software sales being at one of the lowest levels in recent history. The average retailer has postponed or cancelled technology orders, instead focusing more attention on in-house cost cutting of labor and process inefficiencies. CIOs are (justifiably so) nervous about taking technology investment commitments in an unstable environment.

However, as the saying goes, "in chaos there is opportunity!" While the average retailer is turning inward to survive, there is an undercurrent of new retailers that have made huge inroads with consumers. They have not only linked information between existing departments and sales channels, but they have also created greater demand by improving their culture and image. They have focused on creating links to individual consumers via technology and personnel contact. These innovative retailers are setting the pace for what will become the "Must Haves" for 2010.

POS Technology will continue to be driven by the need to see the "360 Degree Customer View." This is precisely where the successful retailers of 2009 have differentiation.

The following tactical initiatives have given a clear competitive advantage in this economy and will only further distinguish these retailers as the recession slows and ends:

• Customer Identification - If you don't know precisely who your customer is, then you have no way of tailoring your merchandise, sales channels, and culture to that consumer. No organization, not even the big-box retailers, services all customers. And the successful retailers not only know who their customers are by demographics, but also why they shop at their store. Maybe it's price, or location, or image; either way your successful competitor is capturing customer information and using it to build a better market basket. The expansion of customer loyalty applications on the "in store" level through communication of in store promotions that link to customer purchase history, and the use of this type of affinity marketing, is widespread via eCommerce marketing and sales channels.
  
  
• Integrated Sales and Returns - It is not only a terrible waste of resources to have a 100% in-stock position at every store location, but also nearly impossible. But when a customer wants a product, it is foolish not to capture the sale. Your competition is performing web-sales, and warehouse send-sales, and store send-sales, and cross store inventory lookups, warehouse inventory lookups, and all of it is being captured and managed via a linked host systems giving consolidated reporting. Furthermore, when the customer wants to return the product after being purchased through one of your sales channels, they are able to return it via any of the sales channels. What was a dream in 2005 will become the benchmark of excellence in 2010.
  
  
• Customer Service - Since much of 2009 efforts are being spent inwardly on associate training and improving the information availability at the store, your 2010 competition will be noted for a greater increase in customer service levels, even with potentially fewer people. Online training, product visibility, faster network and systems, easier technology user interfaces, and more effective headquarters to store communications will continue to enable consistent, well-informed, positive culture for the successful retailer.
  
  
• Outsourcing Technology - We have had proven, successful hardware services outsourced for years, offering both effective and efficient services. Although there are still "growing pains," software development is now often not only outsourced, but successfully offshored at a lower cost with a reliable source of skills and capabilities. The hosting of POS software seems to be one of the last bastions that the average retailer has yet to attack although that is expected to change. For the same reasons you outsource your hardware maintenance, look for the "early adopters" among your competition to move to a "POS as a Service" model in 2010 in which hardware, software, maintenance, and support is paid for on a "per transaction" basis.
  
  
• Creative Customer Contact - If you have a website, great, but also "So What?" If you're missing the opportunity at social networking sites, blogs, product and service reviews, and even YouTube, you're missing what has now moved mainstream. Retailers have found new on-line approaches to attract customers, build loyalty, and increase shareholder value. In 2010, you'll see further adoption and expansion of the communication of quality, image, and a clear value propositions via expanded online imaging. This will most likely be accomplished via an integrated linkage of Customer Relationship Management applications, lifetime customer purchase history, personal communication devices, and in store systems.

In 2009, most retailers have looked at near-term projects to improve the bottom line, generally by improving sales through promotions, reducing expenses and payroll, and reducing inventory.

Retailers must plan for the long term and continue to differentiate and reinvent themselves while also focusing on becoming more efficient at running their business. The key for successful retailers is to ensure that they have created their customer value proposition and that the store associates, the merchandise assortment, and technology are aligned to support the overall strategy. In 2010, best-in-class retailers will find creative ways to ensure continued customer loyalty and grow their customer base while emerging out of these challenging times.

The key success factors for "winning retailers" will be top line revenue generation through deployment of Store Systems (POS and back office) that are more effectively integrated to CRM applications. The aggregate result will be an increased focus on offering customers better service, more shopping options, and further personalization of promotions and services. The reward will be an increase in share of market, increased sales, and more repeat customer transaction which will be accomplished via an improved 360 Degree Customer View and the delivery of a competitive merchandise offering and a preferred shopping experience.