NORTHBROOK, Ill., Oct. 22, 2014 (GLOBE NEWSWIRE) -- While numerous retailers have collected years of customer data, only 9% are leveraging the information in a structured, usable way, according to HRC Advisory www.hrcadvisory.com (HRC), a leading strategic retail advisory firm and unit of Hilco Global. The finding was revealed as part of the leading consulting firm's latest retail industry study, which found that outdated organizational structures and processes, non-integrated IT platforms and a lack of a clear roadmap are major barriers preventing customer data in enabling a retailer's Omni-Channel efforts.
"Retail companies have collected vast amounts of consumer data and research, but the vast majorities are simply not leveraging this information to develop improved customer relationships and experiences," said Farla Efros, EVP/COO of HRC Advisory. "Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick and mortar practices. The changing dynamics of today's retail environment require new approaches to meet the challenges and opportunities presented by today's consumer, and retailers need to update and integrate their organizations accordingly to avoid the lost sale."
Significant findings of the report include:
- Retailers aren't leveraging customer data in a structured way. Only 9% of retailers studied are effectively leveraging their vast amounts of customer data in a structured way as part of their merchandise buying and planning processes. 87.2% of retailers in the study plan to focus on more effectively using customer data to grow sales, but only 73.5% are actually in the very early stages of such efforts.
- Retailers aren't operationally structured for Omni-Channel. 87.2% of retailers surveyed said they have taken initial steps toward or are planning to initiate an organizational change to better integrate processes across all purchase channels. But for 88.2% of retailers surveyed, e-commerce operations and marketing largely remain separate silos.
- Inventory isn't being fulfilled effectively. 84.5% of retailers surveyed (across all sectors) said they are focused now or over the next 12 months on enabling new fulfillment options to avoid the lost sale. However, only 10% of retailers surveyed have the capabilities to effectively fulfill from a store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns.
- Retailers have not found the right balance between online exclusives and product available in all their channels. Less than half (42.5%) of the retailers surveyed said they had or were exploring "online exclusives" beyond color and size extensions to new categories and brands, while 66.2% of retailers are primarily focused on size and color extensions to address the realities of constrained brick and mortar space and slow inventory productivity.
Key Additional Findings:
- 78.2% of the retailers surveyed have efforts underway to clean up, organize and integrate various sources of customer data.
- 74.3% of the retailers have migrated to the same prices across all stores and channels.
- 45% of retailers are considering varying prices across channels and stores post initial markdown.
- Less than 15% of retailers have started to make the necessary changes to planning and forecasting processes to reflect the impact of new fulfillment capabilities.
"The power has completely shifted in favor of the consumer. Today's consumer has so many ways to purchase goods and services and to see direct price comparisons," Ms. Efros continued. "In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can't be matched by newer pure play online competitors."
Notes on Survey Methodology and Analysis
HRC Advisory conducted detailed survey interviews with executives from May 2014 to September 2014. The study surveyed Senior Merchandising and Planning Executives from 35 leading retailers including Department Stores, Specialty Retail, Big Box, and Discount/Off-Price sectors, to determine what retailers are and/or could be doing to better position their businesses to thrive in today's environment led by a digitally savvy consumer. Participating criteria included annual revenues of the range from innovative multi-channel smaller retailers to multi-billion dollar retail chains. At least 90% of the companies surveyed are publicly traded.
About HRC Advisory
HRC Advisory is a leading strategic retail advisory firm that helps retailers unlock value across key operating functions: including merchandising, merchandise planning and allocation, store operations including in-store customer experience and store labor management, supply chain, inventory and margin optimization and helping retailers develop more cost-effective cost infrastructures. The company is a unit of Hilco Global and operates in New York and Toronto as well as at Hilco's headquarters in Northbrook, Illinois. For more information, visit www.HRCadvisory.com.
Source: Hilco Global