• silicon.com
• Management
• CIO Insights

By Steve Ranger, 8 August 2006 12:00

NEWS

In the face of cut-throat competition from their rivals, retailers are investing in new systems to give them as much information as possible about their own customers.

High street competition is fierce, with supermarkets in particular broadening their offerings from their traditional focus on groceries into clothing, electronics and banking products. And, at the same time, customers are less and less likely to be loyal to a particular store.

As a result, retailers will up their spending on customer relationship management programmes, according to research by analyst house Pierre Audoin Consultants (PAC).

PAC consultant Henrietta Lacey told silicon.com: "In the UK one of the main growth areas is in CRM systems, especially with embedded business intelligence functionality. Their understanding of the customer needs to be a lot more complex - it's not just about what they buy but when do they buy it, and in what type of store."

She added: "They are all offering similar products now and customers are no longer brand loyal. There's no longer that loyalty to brand so retailers are having to distinguish themselves by understanding more about their customers."

Retailers will also be forced to adopted new sales channels, such as PDAs, mobile phones and the internet. This is likely to lead to increase in server consolidation, storage and business intelligence projects as retailers look to get a handle on the performance of each separate sales channels.

And caught in a price war with new low-cost retailers, cost-cutting measures such as the rationalisation of their IT infrastructures through outsourcing are now on the agenda - which the analyst house said is a "real trend reversal" because retail has long been very reluctant about outsourcing.

Another areas of growth will include inventory management - the key to cut costs. RFID is likely to play a part here in the medium term, the analyst house predicts. Retailers will also have to look at upgrading their existing electronic point-of-sale systems as well.