Mid-sized retailers get closer to customers, finds Aldata

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Mid-size retailers are being affected more than larger retailers by the economic downturn, according to Aldata Solution’s global retail CIO survey.

However, they are reacting fast and investing more to get closer to their customers with close to a quarter prioritising IT spend on store and ERP systems, as well as solutions available through the cloud to address this challenge, said the software solutions supplier to the retail sector.

The research of more than 130 retail CIOs globally, conducted by retail research specialist Martec, reveals almost double the amount of mid-size retailers (38%), consider the economy to be the biggest issue affecting their business, compared to only 22% of all retailers.

Allan Davies, EVP market development at Aldata Solution, said: “Being a mid-sized retailer has never been harder than it is today, but a key differentiator is the close relationship they can have with their customers by being more local and this is where the larger retailers are trying to play catch up. The old 80-20 rule is still valid and retailers able to pinpoint the 20% of customers generating 80% of their revenues will be able to serve better and make more money.”

The survey reveals specialist retailers are more open to new technologies, said Alddata. As rising costs threaten specialist stores it seems they are turning to new systems to drive efficiencies, with almost double (20%) planning to invest in ERP and cloud computing (15%), compared to 11% and 5% of all retailers, in a bid to improve store-based customer service and to reduce their existing IT costs.

Dilip Popat, industry principal, retail and distribution, Microsoft Business Solutions added: “Mid-size retailers are looking at a new generation of connected IT solutions because their existing software is not giving them the visibility, integration, or ROI that they need to compete effectively in these tougher times.”

Aldata said Finnish electronics retailer Veikon Kone is an example of a mid-sized retailer serving and retaining its customers. The 20-strong electronics chain recently implemented Aldata’s digital loyalty systems, which enabled it to focus tailored offers to specific customer groups via their preferred communications channels (email, SMS, direct mail, phone). It saw a major upswing in sales from both existing and new customer introductions, said Aldata.

Davies said: “The survey clearly shows specialist retailers are prepared to take on the ‘major players’ in the fight for customers and while they are being hit hard by the economy they are finding new and different ways to retain and win new customers. The next phase of retail IT innovation is being driven by necessity and mid-size retailers are leading the way.”