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How can retailers ensure that their systems keep pace with the changing retail market? By going back to basics, says Mark Croxton & Donal MacDaid of Aldata, a leading provider of software solutions for the global retail industry.

Retailers dont need reminding that the retail market is in flux. While consumer demand continues to hold steady, deflation has gripped prices for five years now and looks set to continue in most categories. Retailers boasting top line growth have often achieved this at the expense of profit, causing their shares to fall and the acquisition vultures to circle.

The consumer knows exactly what is going on. Educated by retailers, the media and each other to expect low prices, they will take full advantage of an unprecedented number of formats and channels to get exactly what they want. Their loyalty, it seems, can be bought and sold on the turn of a price tag, not, as had been thought, on quality, choice and offer alone. And yet, while expecting low prices, customers also expect better service, which can eat further into already eroding margins.

These dynamics are not causing attrition yet; for now, competition is intensifying and new players continue to enter the market. The reasons the market leaders are successful are many and various. However, it is clear that certain fundamentals must be in place a seamless supply chain of processes and the data and applications that support them. No retailer could claim to have got there yet and even the best retailers tend to be as conspicuously good in one area as they are bad in another.

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