SOURCE: Aberdeen Group

Aberdeen Group

November 09, 2010 11:00 ET

Small to Mid-Size Retailers Outline Top Business and Technology Strategies for ROI Success

79% of SMB Retailers Are Currently Focusing on Customer Re-engagement and Channel Development Programs as Competitive Differentiation Against Their Larger Counterparts

BOSTON, MA--(Marketwire - November 9, 2010) -  In the face of difficult market conditions, including a sluggish lift in consumer spend, small to mid-size business (SMB) retailers are under pressure to address store/channel process alignment and system-upgrade related challenges. Fifty-two percent (52%) of these retailers are targeting enhancing integrated channel sales and operations plans, and nearly half (47%) are striving to improve their visibility into customer data and related insights. This strategy includes but is not limited to increasing investments towards centralized customer data collection, assembly, analysis, and reporting, according to the Aberdeen Group report, State of SMB Retail: Top Business and Technology Strategies for ROI success. The research from Aberdeen Group, a Harte-Hanks Company (NYSE: HHS) details the business benefits derived from upgraded SMB-specific retail process optimization.

According to Aberdeen data, the impetus for SMB retailers to address store/channel process alignment comes directly from increased global competition, and a slow lift in consumer spend. Forty seven percent (47%) of these small to mid-size retailers identified increased shopping alternatives due to global competition as a top business pressure, and 31% attributed their top business pressure to a slow consumer spending recovery.

"Even as the economy and consumer spending continue to grow at a tepid pace, SMB retailers are facing a 'customer conundrum,'" says Sahir Anand, Vice President of retail research for Aberdeen. "Unlike larger retailers, the fate of SMB retailers does not depend on high-volume margin-driven selling. These retailers need to continuously nurture consistent low-to-mid-level-volume selling via strong customer engagements, repeat customer visits, and high transaction value per customer visit. SMB retailers must also maintain a highly differentiated and cost-conscious retailing model in all channels of sales and service, if they want to face the financial might of larger retailers."

Aberdeen data shows that 52% of SMB retailers are targeting enhancing integrated channel sales and operations plans. This includes more coordinated and cohesive merchandising, marketing, inventory management, customer engagement, and supply chain processes. "SMB retailers realize that if they can unify their channel processes there are potential gains to be made in customer conversion, gross margin, and average transaction value," commented Anand.

Aberdeen data also shows that nearly half (47%) of SMB retailers are striving to improve their visibility into customer data and related insights. This strategy includes but is not limited to increasing investments towards centralized customer data collection, assembly, analysis, and reporting. Currently, a mere 39% of all retailers are able to ensure integration of all sources of customer data (e.g. POS, secondary, online, call center, shipping, fulfillment data etc.) at a centralized location to conduct meaningful analysis. "The challenge in the retail industry and more so in SMB retail relates to the fact that customer data never resides in one location or in one spreadsheet. Therefore, data integration and analysis is necessary, and proves to be more tedious than it may originally be perceived," commented Anand.

A complimentary copy of this report is made available due in part by the following underwriters: NCR, Retail Anywhere, and Tomax. To obtain a complimentary copy of the report, visit: http://www.aberdeen.com/link/sponsor.asp?spid=30410182&cid=6681&camp=2.

Visit Aberdeen.com for additional access to complimentary Retail and Banking Research.

About Aberdeen Group, a Harte-Hanks Company
Aberdeen provides fact-based research and market intelligence that delivers demonstrable results. Having queried more than 30,000 companies in the past two years, Aberdeen is positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748.

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