By Joe Skorupa
After closing the book on 2009, which was covered in detail in last week's blog, it's time to look into the crystal ball for 2010. Here are some fearless predictions about what the New Year will bring based on observations from the smartest people I know in retailing.
As noted in last week's blog, the rising tide of an improving economy will lift all retail boats, but it will provide the biggest lift to those who were agile enough to create healthy balance sheets during the Great Recession.
Obviously, it's not easy to create healthy balance sheets when sales are plummeting, but it's what stockholders expect and it's why C-level executives get the big bucks. And some retailers were highly successful at doing it.
Financially healthy retailers will waste no time in 2010 to launch smart expansions and acquisitions, store openings, investments in innovative technologies, and an aggressive game plan to seize new opportunities, new customers and new markets.
To find out where the best opportunities are located I spoke with the leading authorities in retailing:
Mike MacDonald, president and CEO of DSW Shoe Warehouse
Dr. Jim Goodnight, CEO of SAS
Bill Nuti, chairman and CEO of NCR
Richard Hastings, consumer strategist for Global Hunter Securities
Rob Garf, associate partner and global retail industry strategy leader for IBM Global Business Services
Kevin Sterneckert, research director consumer centric retailing for AMR Research
Gary Williams, CEO and Founder of wRatings
Jeff Roster, vice president industry market strategies retail for Gartner
Leslie Belcher, president of Jesta I.S.
Brian Kilcourse, managing partner of RSR Research.
In the first of this two-part series I focused on retail learnings from 2009. In this part I will focus on retail predictions for 2010.
One more thing: The predictions below will appear in much greater detail in the RIS January 2010 cover story. So, in this series I will just focus on select highlights and use them without attribution. To read the predictions in their complete context and full attribution (to find out who said what), be sure to check back on this Web site on January 5 and click on the January 2010 issue of RIS News.
Predictions for 2010
--Smart phones will do for retailing what the Morse code did for the industrial revolution. The smart phone revolution will make the product and the service the protagonist of the relationship, not the merchant, not the consumer. Smart phones will link together everything through one powerful device.
--Disruptive innovation is taking place as once separate technologies and channels now converge. Retailers will need to look to mobile-aware technology that leverages self-service kiosks, digital signage and intelligent promotional software that will give the consumer much more control, save them time and deliver greater value.
--Optimization of merchandising decisions has proven to deliver competitive advantages, and these innovative technologies have only begun to scratch the surface of their full potential. The retail store of the future will be delivered through optimization of nearly every decision in the value chain. Would anyone think of retailing without a bar code scanner today? The same will be true with optimization technologies throughout the enterprise in the future.
-- There will be nothing more in important for the next 10 to 15 years than social media. Why? Social media like Facebook, Google, Twitter and YouTube change the way people absorb their perception of the world. What will win in 2010? The technologies that simplify and are practical. Identify a cause, make it simple to understand, and lead your customers to be stronger than ever before.
--No doubt we will see social media/networking and mobile commerce skyrocket in adoption in 2010. Not all retail initiatives will be successful, and I'm not entirely sure the key platforms will be Facebook and Twitter.
--Consumers will increasingly be talking about their retail experiences outside of retailer-controlled platforms. This should send a shiver down every retailer's spine. These consumers won't have to wait to get back to their houses and use the time to cool off before posting their thoughts and reflections. They can easily do it from the palm of their hand by using an increasingly powerful smart phone. The number of smart phones is just exploding and the impact it will have on retailing is exploding right along with it.
--Areas that are ripe for higher levels of investment include e-commerce, mobile commerce and social media. Many retailers are still operating on first generation e-commerce platforms and few retailers will tell you their e commerce strategy isn't gaining in importance. That's a recipe for increased investment.
--Since many consumers are already using mobile devices, retailers have to race to catch up. A few already are and are gaining traction. Social media is the power of word-of-mouth awareness magnified many times. Retailers have to understand that their early efforts in social media are not optional experiments. They don't have a choice, because their customers are already there. Where customers go retailers have to follow.
--Winning retailers will invest while others cut costs. They drive efficiencies in non-differentiating processes to pay for differentiating innovations.
--Loyalty programs are no longer enough. Smart retailers will focus on the lifetime value of consumers and market to them accordingly. They will be under more pressure than ever to coordinate a multi-channel value offering.
--New investments in BI are becoming critical for retailers to understand how best to target assortment, price, promo and services, as well as optimize operational processes to redirect efforts toward a more localized service and selection.
--The growth of cross-channel strategies is extremely important for success in 2010. The dynamic use of social media and mobility is a powerful way to interact with consumers.
--Retailers who leverage internet, social media and mobility to listen to customers have an enormous opportunity to connect and build strong, lasting relationships, resulting in more customer visits and higher average transactions.
Check back next week for the complete Review and Outlook cover story in the January edition of RIS News.
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