NRF Study: Growth is Key Issue for Retailers in 2006
By Ronald Margulis
Last year, it was supply chain efficiency; this year, it’s growing the top line. According to a survey by the National Retail Federation (NRF) Foundation and BearingPoint released earlier this week at the NRF Annual Convention in New York, retailers will be focusing on accelerated growth this year. The fourth annual study, Retail Horizons: Benchmarks for 2005, Forecasts for 2006, revealed that the majority of retailers cited their mission of growth as a priority initiative. Close to three-quarters (71 percent) of retailer executives stated that growing existing comp store sales is their top priority.
“In today’s increasingly competitive environment, retailers understand that there is a heightened importance on accelerated growth and differentiation in order to set themselves apart from the pack,” said NRF President and CEO Tracy Mullin. “We are now seeing retailers refocus their efforts on growth initiatives in an effort to increase sales, expand their consumer base and retain customer loyalty.”
Other key findings of the study:
- 41 percent of respondents are making 11-40 percent of their purchases through private label sources, with plans to increase that number to 49 percent in 2006;
- Retail companies with an online presence nearly doubled to 94 percent in 2005, up from barely 50 percent in 2004;
- Customer-focused decision-making continues to gain momentum, as 13 percent of respondents had more than a quarter of their field management compensation tied to customer satisfaction results.
- Within the next 12 months, nearly a quarter of respondents plan to add e-training and another fifth plan to implement hiring technologies and self-service kiosks.
The study suggests several approaches retailers can use to provide competitive advantage and generate robust prospects for profitability:
- Differentiate product assortment;
- Understand customers to earn their loyalty;
- Target the more valuable multi-channel shopper;
- Invest in emerging information technology.
Moderator’s Comment: What issues will get the lion’s share of the retail CEO’s attention this year?
First off, the NRF show this week was the picture of what a trade show should be – vibrant; great speakers; new stuff on the show floor and several networking
opportunities. Congrats to all at NRF. After talking with retailers and others at the show, one observation was nearly universal – the projects that retail CIOs are finding it
easiest to get through the executive team are those designed to help grow sales. This was not lost on the tech vendors on the show floor, many of which featured applications and
services designed to drive top-line growth. –
Ronald Margulis – Moderator