Magazine Article | May 22, 2013

Stop Channel-Surfing

Source: Innovative Retail Technologies

June 2013 Integrated Solutions For Retailers

By Michael Schulze, SVP and general manager, SAP Retail

Why retailers need to turn their focus from distribution channels back to customers

A lot of themes emerged at this year’s NRF “Big Show” in New York City. But if I could reduce the buzz to one message for retailers, it would be this: Customers are demanding your attention.

The problem is that retailers are kind of busy right now. The entire retail and supply chain industry is in the midst of incredibly disruptive technological and social change:

  • The ubiquity of smartphones. By 2016, one billion consumers and 350 million employees will be using smartphones, according to Forrester Research. Mobile spending will reach $1.3 trillion globally and will represent 35% of the technology economy. In fact, the mobile apps market is projected to grow nearly ten-fold to $55.7 billion by 2015.
  • The impact of social media. Shoppers have developed a knee-jerk reaction when it comes to sharing their experiences — good or bad — with the rest of the world. ODM Group research indicates that over half of people on Twitter recommend companies and products in their tweets.
  • The rise of the millennial. High levels of education, unemployment, and debt have led to a generation less likely to engage in frivolous spending, who mistrust big business, and are less prone to brand loyalty. As the first generation with ready access to smartphones and social media, millennials expect a consistent shopping experience regardless of how, when, or where they buy. In short, they care less about the channel than the experience.