IDC Retail Insights on Retailing

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Welcome to the October 2013 issue of IDC Retail Insights’ newsletter, Insights on Retailing. Our newsletter examines recent events and offers opinions on key trends in the worldwide retail industry, and works in synergy with the IDC Retail Insights Community.  This online community is designed to enable technology buyers to engage with IDC Retail Insights analysts, connect with colleagues, and share knowledge and best practices. You can also follow us on Twitter.  

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Don't miss our exciting series of new, complimentary web conferences for Retail IT Executives! Visit the Events page on our web site for complete details and to register! THIS MONTH, don't miss this web conference: Driving Innovation from the CIO’s Office: Steering Innovation Portfolios through Superior Innovation Strategy. In November, register early for: Managing Outsourcing Providers for Maximum Return.

Tackling Consumer Privacy Concerns by Enabling Transparency and Consumer Control
By Leslie Hand

With all of the current controversy about secret government requests for consumer phone records, the public is hyper-aware to the intrinsic data and location tracking capabilities in smart phones and other mobile devices. In fact, the public is so aware, that diligently following p ersonal privacy and security recommendations is no longer reserved for just the most tech savvy or paranoid among us. That poses a potential challenge to those companies that have already developed plans to utilize data, such as smartphone location tracking data to inform personalized marketing and interactive customer experience programs, unless of course these programs sufficiently entice consumers while allaying privacy concerns.

With the release of iOS7, Apple is making it easier for consumers to monitor and manage access to location data with a couple of extremely easy to use "settings". And while Google hasn't made these settings as explicit in base Android OS, 3rd party apps such as PlaceMask and Veriplace, downloadable from the Google Play Store, enable similar visibility to location tracking activity. So, as I have always maintained, companies need to make the reasons for consumers to be interested in engaging with them compelling enough, that they prioritize allowing their specific apps to utilize personal phone resources for location tracking. Compelling Apps are popping up here and there, but the consumer will ultimately only allow Apps to persistently access location data if they do transparently engage them and respectfully utilize consumer data and resources.

A Word about the State of Location Tracking in Retail
First, allow me to provide a bit more background on location tracking tools and applications. Retailers have always strived to understand the shopping patterns of brick and mortar customers, but I would describe most legacy programs to capture data to describe these shopping patterns as episodic or incomplete at best. Incomplete. because in many cases the data only described logged customer interactions at checkout and episodic, because the observed physical actions are often sourced via a direct human observation taken during a specific drive to capture such data.

Now retailers are evaluating, piloting and in some cases fully leveraging data sourced via in store digital cameras, and various smartphone based data sources to understand customer movements and interactions in physical stores. In most cases, anonymized location data is utilized to directly engage the consumer with relevant offers, messages and services or to plan product placements, adjacencies, and assortments. The sources of location data continue to become more precise with geofenced data sourced from triangualting wi-fi or GPS position from consumer held mobile devices, being eclipsed by the improved indoor mapping performance of Bluetooth low energy (as in Apple's iBeacon) and geomagnetic field (as in IndoorAtlas's mapping and navigation).

Retailer Concerns About Consumer Acceptance / Lack Of Transparency
Some retailers have publically announced that they will protect consumer privacy by steering clear of any such activities. Recently, Macy's vice president of customer strategies Julie Bernard was recently quoted at D2 Digital Dialogue conference in Cincinati, "I could just track every phone that came into Macy's without announcing it - we are not... Just because you can doesn't mean you should." But during the same speech Bernard lamented the unfortunate lack of public information and transparency about responsible use of this information to make customer interactions more relevant.

One data collection company, Acxiom recently attempted to allay consumer distrust by offering the public access to a limited sample of data it had collected on them. The site,, also provided an opportunity to correct any information that was incorrect. This exchange is precisely what Bernard advocated - enabling consumers to trade personal information for more relevant advertisements and offers.

Many big technology companies including Microsoft, Google, Foursquare, Apple, Dropbox, Facebook, Google, LinkedIn, and Twitter among others, are petitioning congress for governmental transparency of requests for consumer data. These organizations have asked for legislation that would provide greater transparency around national security-related requests by the U.S. government to Internet, telephone, and web-based service providers for information about their users and subscribers. I am pretty sure there will be some progress, but regardless of the outcome of these requests, consumers are now very aware of the lack of privacy that must be assumed when using the internet or any other communications device. They will seek and appreciate higher levels of control to protect their privacy and personal data. This is one of the reasons why I believe Apple's new location settings are brilliant, as are the Android apps that enable similar location management.

An Example of an App That Promises To Entice the Consumer While Allaying Privacy Concerns
Major League Baseball is launching a major initiative to make attending games at stadiums a completely interactive experience for fans. Taking advantage of Apple's iBeacon indoor mapping the MLB plans to customize its At the Ballpark app for everyone that walks into any of its stadiums nationwide. Last week, The MLB demonstrated how a team such as the Mets would be able to create micro-locations within the stadiums where a consumer could get different experiences. By loading the free app when you get off the subway and head towards the stadium, it immediately knows you are at Citi Field. It populates a ballpark guide with information specific to the stadium, and as you near the gates, the app displays your ticket's barcode on screen, as well as a map of where the seats are located. As far as I can tell, the consumer is in complete control of turning this app off and on, and the Apple iBeacon technology only utilizes phone resources when it is actively engaged in the experiential process - just what the consumer will ultimately want, even those that haven't figured this out yet.

Advice to companies interested in location based marketing: help consumers get an experience worth interacting with on a regular basis, and help them understand how to protect their security and phone resources - it's a win-win-win!

Click here to join the conversations in the IDC Retail Insights Community.

Demand Sensing and Planning Remains a Top Priority for Manufacturers
By Simon Ellis

Volatility has emerged as a top concern for manufacturing companies since the global recession of 2008-2010. For some manufacturing sub-verticals like engineering-oriented value chains, volatility manifests itself in the form of supply complexity; for other sub-verticals like brand-oriented value chains, volatility manifests itself in the form of demand complexity; for still others like technology-oriented value chains, they have the pleasure of both. The result has been a renewed focus on demand planning and a desire to improve their forecasting capabilities and performance. In a recently published IDC MarketScape we focused on this critical area, with an eye towards the notable vendors in the space.

Although the idea of how companies interpret and translate demand into production and fulfillment can be articulated in many different ways, at IDC Manufacturing Insights, we tend to think of it as beginning with the credibility of the forecast and ending with successful fulfillment — in other words, forecasting to fulfillment. If one accepts, as the central premise, a desire on the part of the manufacturer to fulfill demand in an accurate, timely, and cost-effective way, then all of the things that happen in the supply chain are slave to this desired outcome. Although forecast accuracy is often unfairly blamed for customer service failures (or for costly expediting), there is little question that poor supply chain planning is a major contributor to broader supply chain problems.

The notion of "forecast to fulfillment" is at the heart of supply chain planning, in terms of both how manufacturing companies "sense" demand as an input to the forecast and how they "respond" with production plans and factory scheduling. Specifically:
Fulfillment goes further than planning obviously, into logistics and distribution, but that is a discussion for another day. In the published IDC MarketScape, we focused on three key areas:
  1. Demand Sensing: The use of near-real-time information and modern mathematical algorithms to create an accurate demand forecast
  2. Demand Signal Repository (DSR): The ability to consolidate and cleanse demand signal data of all forms in a single, easy to access data repository to facilitate reporting and insights.
  3. Demand Forecasting: A proven approach to create reliable demand forecasts using statistical and historical customer sales forecasts and data
According to the most recent IDC Vertical Survey, Demand Planning and Forecasting was the in top 10 most important manufacturing application area for manufacturers – seventh for all manufacturers, but fifth for process manufacturing (notably consumer products). In our assessment of demand planning and sensing vendors, we limited participation to the eight notable providers of demand sensing and planning tools. Indeed, IDC Manufacturing Insights would have no reservation about recommending any of the eight to prospective end-user clients. As a consequence of the decision to limit participation to notable vendors, the scoring was tight, with differences characterized by subtle distinctions and levels of integration.

It always proves challenging to differentiate between narrower 'best-of-'breed' vendors, and their broader 'enterprise' competitors. Although it is expected that the narrowly focused company will excel in their area of focus, and we do see that to a degree in this IDC MarketScape, it is the view of IDC Manufacturing Insights that 'best-of-breed' and 'enterprise' are not mutually exclusive in demand sensing and planning.

Click here to join the conversations in the IDC Retail Insights Community.

Introduction of Spencer Izard

By Spencer Izard

Allow me to introduce myself, my name is Spencer Izard and I recently joined IDC's Retail Insights Group as the Head of European Retail Insights based out of the UK. In this position, I manage the IDC Retail Insights team across Europe, and provide advisory services, research, and consulting to end-user organizations and IT vendors operating in, and serving, the retail sector. My focus is on providing extensive insights into end-user challenges, drivers, trends, and operating behaviors in both business and IT contexts. In conjunction, I support leading retail organizations in driving process optimization, business change management, and ICT-enabled transformations across geographies and retail segments.

Prior to joining IDC I've spent the past 15 years working at several large international end-user organizations, both directly and indirectly, within strategy and architecture functions to deliver IT strategies bridging business demands and IT capability, creating and managing architecture teams, and establishing IT best practices.

Whilst working for leading UK retailer Marks & Spencer I introduced and embedded enterprise architecture techniques, delivered IT harmonization initiatives across business units, and implanted cloud strategies across different technology sets. Prior to that, I worked for three years at Microsoft providing strategic end-user consultancy focused on business and IT engagement, high performing IT teams delivering technology services, the identification and analysis of new technology trends for business drivers, and enterprise architecture across retail, financial services, public, and energy sectors. My engagements had a particular technology focus on enterprise application, cloud computing, mobility, and data driven middleware, both from internal employee and external customer/partner perspectives. Before Microsoft, he spent over six years at BP as a global architecture manager among other roles, which also involved introducing mobile, collaboration, and virtualization technologies.

Going forwards my team and I are focused on providing deep insights for both retailers and technology vendors specializing in the retail sector across the diverse opportunities within the European countries and markets. The concept of Omni-channel has maintained a strong relevance in the retail industry across Europe as retailers look to leverage their in-store and e-commerce capabilities as ones seamless experience for customers. Of course the challenge for many retailers is in understanding, planning, and transitioning from business models where in-store and online are separate functions to a connected Omni-channel approach. IDC works closely with retailers delivering advisory services to help in these transitions as well engaging with IT vendors in regards to the current trends and requirements from retailers of technology.

So, please consider this an open invitation to engage with me to share your perspective, your experiences, and questions regarding the European retail sector. My team and I want to hear from you and look forward to the opportunity!

Write to me at: or please follow and engage with me on Twitter at

Click here to join the conversations in the IDC Retail Insights Community.


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Driving Innovation from the CIO’s Office: Steering Innovation Portfolios through Superior Innovation Strategy
October 23, 2013 – 1:00 p.m., EDT

High impact innovation requires optimal choices. An innovation strategy is the first step towards making such choices. All business leaders, including the CIOs, make three strategic choices whether consciously or subconsciously:
The result of these choices is an innovation portfolio. Are you making the right choices in your innovation strategy? Is your innovation portfolio optimal or sub optimal? This web conference will explain the choices involved in innovation strategy and how to audit your own innovation portfolio. Join Ankush Chopra, IDC Adjunct Research Advisor, and Joseph Pucciarelli, IDC Vice President and IT Executive Advisor, for this complimentary one-hour web conference.

Managing Outsourcing Providers for Maximum Return
November 13, 2013 – 12:00 p.m., EST

There can be little doubt that IT outsourcing and business process outsourcing have become standard business practices. However, in the past decade, agreements have changed from single-provider contracts to complex, multi-vendor arrangements. The need to balance relationships among multiple, sometimes - competitive providers now requires buying organizations to take steps to adopt new management models. Buyers with a mature outsourcing capability — including the ability to manage complex outsourcing deals with many providers — will find that they retain a significant competitive advantage over peer organizations.

This IDC web conference explores the ways that companies have historically managed outsourcing and how organizations need to adapt to the changing nature of outsourcing relationships. This session will provide guidance to IT executives on ways to develop their governance and relationship management capabilities to wring more value from outsourcing contracts. Join Ron Babin, IDC Adjunct Research Advisor, and Joseph Pucciarelli, IDC Vice President and IT Executive Advisor, for this complimentary one-hour web conference which will lay out specific steps that buyers should take to strengthen their outsourcing capabilities.


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IDC Retail Insights assists retail businesses and IT leaders, as well as the suppliers who serve them, in making more effective technology decisions by providing accurate, timely, and insightful fact-based research and consulting services. Stafed by senior analysts with decades of industry experience, our global research analyzes and advises on business and technology issues facing the retail industry. International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology market. IDC is a subsidiary of IDG, the world’s leading technology, media, research, and events company. For more information, please visit, email, or call 508-935-4490. Visit the IDC Retail Insights Community at


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