Study: CRM's Hot, Sustainability's Not?

By Matt Pillar, Editor In Chief, Retail Solutions Online/Integrated Solutions For Retailers

The 2010 edition of the Aldata/IBM/Martec International Global Retail CIO Survey comprises 64 pages of intelligence procured from $100 million+ retailers in 28 countries with combined sales of $528 billion.

Aldata VP Donal Mac Daid joined me from Paris last week for a call on the findings of the Global Retail CIO Survey. He told me to expect an increase of .3% in tech spending as a percentage of sales (to 1.3% from 1.0% last year), with a focus on projects that result in quick ROI. "It appears that point solution adoption will be prevalent," he said, "particularly for data management and promotions and markdown optimization."

While increased adoption of point solutions might seem good for the industry on the whole — after all, it's great to hear that someone will be buying something — the adoption of point solutions should not be taken lightly. It can be hard to exercise restraint when a relatively inexpensive "best of breed" application investment promises a solid 6-month ROI, I know. But far too many retailers end up spending far too much money on cobbled-together point solutions that, in the long run, cause more integration and scalability headaches than that fleeting bit of ROI is worth. "Point solution pollution" some have come to call it (not sure who to credit with coining that term, but I've heard it used in solid context of late by our friends Ravi Bagal [Verizon] and Jim Mattecheck [1010data], among others).

Avoiding point solution pollution is a topic for another day, and I invite your thoughts. For now, I'll zero in on a few specific Global Retail CIO Survey findings that caught my attention.

• Cross Channel CRM is the number-one application retailers plan to implement in the next 3 years. Forty-two percent of respondents rate this is a priority, followed closely by Loyalty systems that link customer data to buying patterns and behavior (38%). These two top priorities are inextricably linked, and according to Mac Daid, the emphasis placed on them is a direct reflection of the fact that Internet sales were, for many retailers, the only growth area in 2009. "As the economy rebounds and store sales pick up, retailers are finding it important to achieve a single view of the customer across all sales channels," he says.
• Sustainability solutions adoption won't impress anyone in 2010. Unless, of course, the solution provider community steps up its production of offerings in this area. That's according to Mac Daid, who says that despite retailers' focus on green initiatives, retail execs are playing a waiting game as the software market catches up with applications that will help them execute on their intent. The report shows that sustainability initiatives were rated, on average, 5.5 out of 10 on the importance scale. "Retailers have accepted sustainability as a necessity, and even as a facilitator of savings, but they haven't seen any real tech-based apps put in place yet," he says.
• Finally, systems that support product safety were identified as an area of focus for 47% of respondents. It's encouraging to witness the vigilance of our industry, months and years removed from the rash of recalls that caused so many American consumers to trash so many children's toys, bags of pet food, and jars of peanut butter from 2007-2009. Check out this issue's Recall Compliance: Don't Let One Bad Apple Spoil The Bunch for more on the topic.

This is a thorough and interesting report, well laid out and worth discovering for yourself. If you're a retailer interested in what your peers are doing, or if you're a solutions provider seeking to gauge market opportunity, check it out at http://www.globalretailciosurvey.com.