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Retail Systems: Day One

Craig Keefner, publisher of Kiosks.org, covered the first day of the Retail Systems show in Chicago, where the latest research from Gartner Group was released.

June 9, 2003

Craig Keefner filed this report from the Retail Systems show in Chicago. His entire piece is available at Kiosks.org.

CHICAGO -- Retail Systems in Chicago is a great show. It's huge (along the lines of NRF).

This Monday morning (June 9) I attended the Gartner briefing giving the results of their latest and greatest Technology and Retail study. The study is prepared by RIS and Gartner. The main sponsor is Lawson Software, Epson and Sun are category sponsors, and Cisco, CRS and DeLaRue are Associate Sponsors.

The event was noon to 1:30 and there were around 500 people, many against the walls and on the floor as it was totally packed.

Joe Skorupa of RIS led off. The big area he called up was Labor Scheduling as being very very big. He then went into the methodology of the study. 23 percent of the respondents were with companies doing over $1 billion and they were the key IT managers. As usual, I was a bit disappointed at the number of responses the study used which was 231 qualified responses. Joe's final point before introducing Gartner was to remind Gartner of their conclusion which was "the next three years will be breathtaking in the Retail sector."

Gartner then spoke and this was the meat of the event. Jeff Roster is the analyst and he went straight away to the Key Take-Aways.

· The retail sector is shifting away from techno-phobic to techno-centric

· All of the key initiatives have their underpinnings in technology.

· Real Time is finding a home (this is echoed in the On-Demand IBM campaign and the others)

· Operational efficiencies are hitting stores

· There is a revolution going on with RFID

· The only negative item he would point to is that there still seems to be a struggle going on between the business units and IT. It needs to be less.

· Budget wise, the 2004 budget are shifting to growth

· Computer Based Training (CBT) and Knowledge Management are going thru the roof!

· Linux is edging into the mainstream and is definitely on the radar.

· Network Infrastructure

o High bandwidth to stores is increasing

o Retail has faster networks now

o Corporate portals springing up

o Less than 10 percent say they will be updated AFTER 2005 (ie they update between now and then)

o Jumping towards Real Time Multi-channel Integration (the implication being Data Warehousing ala TeraData/etc will only become more valuable)

o More than 90 percent will or are upgraded before 2005

o Security is getting turbocharged

· The biggest datapoint for Jeff was the one on how many POS/Retail people will be replacing their Software/Hardware (or just have). It was the most relevant trend he saw.

· Wireless POS is growing but not dominating (21 percent this year)

· Self-checkout at grocery stores is getting stronger all the time

· Store Operations are being Supercharged

o Labor scheduling makes big comeback

o Analytics emerging in the store. This might be Real Time Stock Alerts or Store Manager Workbench systems.

o Inventory Controls

o Multi-channel Retailing has Arrived (thank goodness...)

§ This includes in-store pickup and in-store returns

§ And in-store kiosks

· Optimization -- this is a big word....

o Price optimization efforts are very strong

o Promotion and markdown mechanisms

o that leads top Promotion and Campaign management

o Micro-merchandising going strong (I need to read up on this one...)

o And CPFR right now is just too complex for what they get (it's not that they don't want it, they do...) Second impediment was the requirements to transform current business processes.

o Finally, Web-based purchasing is flourishing. I guess that is encouraging, eh?

· Conclusions

o Delaying a decision is making a decision.

o Retail is no longer techno-phobic

o Investments in this area are strong thru 2006

· For Vendors

o Retailers are still wrestling with technology and finding its impact on business.

o Retailers are still a skeptical bunch when it comes to claims

o They are not interested in Technology - They want to solve business problems, improve their sales capabilities and have better performing assets.

o Retailers are gravitating toward long-term "key" relationships (which means fewer vendors right?)

All in all it was great talk and the handouts and report (with all the nice graphs and numbers) were very nice.

A very nice and educational event!

Tomorrow morning I go in early and listen to Wal-Mart detail its RFID strategy and implementations.

For More Information from Retail Systems, go to Kiosks.org.