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
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.
Don't Miss This!
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
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
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, AboutTheData.com,
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:
- Analytics and sales and operations planning (S&OP) sit at the
top and across the planning "stack," in terms of both enabling quick
and complete visibility into the planning process and arriving at a
cross-functional consensus view of the business.
- The key
elements of supply chain planning are the collection of demand through
demand sensing and planning and then the translation of this view of
demand into supply plans through supply planning.
management/optimization and network design/optimization have an
important role across the planning processes — both are critical inputs
and/or constraints to the generation of a practical and productive plan.
initial part of the fulfillment process is very much about planning —
agreeing to the production plan that will deliver to the forecast and
actually scheduling the factory.
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
- Demand Sensing: The use of near-real-time information and modern mathematical algorithms to create an accurate demand forecast
- 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
- Demand Forecasting: A proven approach to create reliable demand forecasts using statistical and historical customer sales forecasts and data
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
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: email@example.com or please follow and engage with me on Twitter at http://twitter.com/IDCspencer
Click here to join the conversations in the IDC Retail Insights Community.
Research reports may be found by entering the Document # in the
Search box at the top of any page of our web site. If you are a subscription
client of IDC Retail Insights, you may access the research online, through
your own company's portal, or other specific internal access method.
- "Perspective: Undercover Sustainability — Retail Energy
Management Is Often an Initial Sustainability Investment But Do
Retailers Need to Do More?" - Sep 2013 - Doc #GRI243077
- "Business Strategy: The Rise of the Corporate Application Store in Retail" - Sep 2013 - Doc #RI243310
- "Methods and Practices: Cloud in Retail" - Sep 2013 - Doc #RI243398
- "Perspective: Social in Retail — Increasing Adoption for the Customer" - Sep 2013 - Doc #RI243170
- "Perspective: IBM Smarter Commerce, 2013 — Contextualizing the Customer Experience" - Aug 2013 - Doc #GRI242467
- "Perspective: Dassault Systèmes 2013 Update — Helping Retailers Serve the 'Experience Economy'" - Jul 2013 - Doc #GRI242316
- "Perspective: Oracle Retail CrossTalk Event — Innovative Products for Innovative Retailers" - Jul 2013 - Doc #GRI242235
- "Pivot Table: IDC Retail Insights' U.S. Retail Solutions Market
Share and Forecast Guides, 2013, Version 2" - Jul 2013 - Doc #GRI242123
- "Business Strategy: SAPPHIRE NOW 2013 — SAP Gives 'Em Something to Talk About" - Jun 2013 - Doc #GRI242012
- "Perspective: Three Hurdles to Cross Along the Long Road to Becoming an Omnichannel Retailer" - Jun 2013 - Doc #GRI241519
- More IDC Retail Insights Research
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
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.
- How to create value?
- How to capture value?
- How to deliver value?
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.
Meet Our Analysts at Upcoming Industry Events
CIO Summit Europe
November 5-7, 2013 - Berlin, Germany
Crawford DelPrete will participate.
For more information, visit our Events page.
View our informative videos!
Visit IDC's channel on YouTube.
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Web Conferences On Demand
To access replay recordings and slides from these web conferences on demand, visit our Archived Events page.
To access presentations and other complimentary resources, become a member of our Community.
- Enterprise Architecture: A Game-Changing IT Resource
- A Comprehensive Guide to IT Security: Countering Cyber-Threats
- Status of Big Data and Analytics in Retail
- Global Forces Reshaping IT and the Myth of ITs Demise
- IT Staffing for the Third Platform: Challenges and Opportunities
- Service Catalog: For Survival of the Fittest
- IT Cloud Decision Economics: Crafting a Mature Cloud Strategy
- Convergence of Digital and Physical Dynamics in an Omnichannel World
- DevOps - A New Approach for Improving IT Ops & AppDev Synchronicity
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 www.idc-ri.com, email firstname.lastname@example.org, or call 508-935-4490. Visit the IDC Retail Insights Community at http://idc-insights-community.com/retail.
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