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Retailers Investing In Customer Engagement: Report

Washington – Retailers
in 2012 will focus on a number of customer-centric functions including IT and e-commerce
investments, enhancing customer service initiatives, and building on their
mobile platforms, a new study shows.

The efforts are
designed to build customer engagement, capture wallet share and accelerate
sales growth, according to the report by the NRF Foundation and KPMG.

 The study, “Retail Horizons: Benchmarks for
2011, Forecasts for 2012,” is based on a survey of 247 retail executives representing
135 North American companies ranging from department and specialty stores to
supermarkets, restaurants and online merchants.

“Retailers are
poised to enter 2012 with a renewed focus on building up and building out many
of their most important operations, hoping to establish a new sense of brand
loyalty with all of their customers,” said Matthew Shay, president/CEO of the
National Retail Federation (NRF), an industry trade group. “Though customers
are always a company’s top priority, customer satisfaction will get a huge
facelift this year. From increasing their brand visibility through
cross-channel initiatives to providing unique, personalized shopping
experiences through every channel, retailers have indicated 2012 is all about
the customer.”

According to the
survey, nearly 67 percent of companies rank customer satisfaction as the top
strategic initiative for 2012 and, similarly, 82 percent said customer service
strategies will be their top priority in the coming year, up from 75 percent
last year.

For the first time
in the survey’s 10-year history, retailers’ websites or online channels
eclipsed physical stores as the top channel for marketers (81 percent for
brick-and-mortar vs. 86 percent online). As such, retail executives said they
will invest in programs that directly resonate with today’s shopper. According
to the survey, 85 will emphasize 
increasing online sales, up from 83 percent in 2011, and 38 percent will
have a greater focus on increasing m-commerce sales over the next year, up from
29 percent in 2011.

Additionally, more
than half (53 percent) of those surveyed said they will specifically focus on
web personalization engines in the coming months, which includes such
enhancements as location-based services and tracking methods unique to shopping

To better serve
mobile-savvy shoppers in their stores, retailers also said enhancing handheld
technologies, such as mobile point-of-sale (POS), will be a core focus over the
next 18 months. While 17 percent already use mobile POS technologies in their
store, an additional 33 percent indicate they plan further POS investments
during that timeframe.

“Compared to the
past few years, retailers have turned their attention to growth acceleration,
with an emphasis on improved customer engagement strategies and tactics,” said
Mark Larson, KPMG’s global head of retail. “Harnessing the vast amounts of
customer data they have at their disposal to create unique consumer
interactions will be critical, especially as digital sales grow. Clearly the
retailers who master the one-to-one customer approach, and who also leverage
the full potential of e- and-mobile commerce platforms, will be in a much
stronger position to gain wallet share.”

Aiming to grow
that customer interaction, 45 percent of companies are actively developing
widgets, gadgets or advanced links that can be incorporated with their social-media
pages, and another 41 percent are planning to develop these items over the next
18 months.

Among the study’s
other findings:


    percent reported increases of greater than 5 percent in same-store sales in
    2011, up from 21 percent in 2010. Additionally, 63 percent reported gross
    margins greater than 40 percent in 2011, up from 40 percent in 2010.

  • After years of
    practicing cost containment, this year more than half (52 percent) of
    respondents plan to increase their IT budgets.

  •  Ninety-one
    percent of respondents said they will focus on leadership assessment,
    development, and succession, up from 83 percent in 2011. Additionally, 52
    percent will increase associate training, up from 39 percent last year.
  • As the number of
    multichannel shoppers continues to grow, so will retailers’ focus on price
    optimization, with more than one-third (35 percent) of respondents planning to focus
    on solidifying their price optimization technologies over the next 18 months.

  • Nearly six in 10
    (59 percent) said new customer acquisition is their top strategic priority for
    2012, up from 55 percent in 2011.