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Among the most critical challenges a retailer must make are those involving information and technology. A visionary, yet practical strategy con position a retailer to use technology to mat its primary objective: knowing and serving its customers. Not only con information technology help retailers listen more closely to their customers, it also con enable improved quality ad customer service. Information technology often carries with it the positive image of innovative leadership. But technology must do more than look good. Above all, it must be purposeful and integrated: Each addition to a retailer's technology plan must link with its existing systems to support a meaningful strategy formulated to meet specific challenges.
STRATEGIC FORCES A retailer's challenges come from various fronts. In particular, retailers are investing in improved technology to rise above the forces exerted by their consumers, competitors and vendors.
CONSUMERS. The weak economy has slowed consumer spending and resulted in flat meet growth. But at the same time, consumers expect retailers to offer more convenience, greater value, improved service and increased quality. Retailers also face America's changing demographics: As the nation's "graying" population and the "baby boomers" and their children rise in spending power, their lifestyles and buying patterns influence the retail business. Furthermore, consumers are demanding that retailers rise up to meet their environmental and wellness concerns.
COMPETITORS. In the 1980s, retail store operations flooded America. The amount of retail space in the United States has doubled since 1970; for every U.S. citizen, we have 18 square feet of retail space. And we are witnessing an ongoing shakeout of faltering organizations that cannot compete. The industry's leaders--who focus on building market share and differentiating themselves from others--are moving far ahead of the rest.
VENDORS. Retailers are beginning to establish strategic partnerships with their vendors, such as manufacturers, mills, wholesalers, distributors and carriers. As the market becomes more global, retailers must choose their partners from a broad array of vendors around the world. Battling continued cost pressures, they are encouraging vendors to help cut costs in the retail pipeline, eliminate wasted time and improve quality.
RESPONDING TO NEW DEMANDS To be responsive to these market forces, retailers need information systems that enable them to accurately predict and effectively react to trends. Traditionally, retailers have...