By Vincent Quan, Associate Professor, Fashion Merchandising Management Department at the Fashion Institute of Technology (FIT)
I had the opportunity to participate in an informative and lively dinner panel hosted by IBM for the retail press in the Big Apple last Wednesday. Joining me on the panel were Nihad Aytaman, director of Business Intelligence at Elie Tahari, IBM Global Retail Industry Leader Jill Puleri, IBM Retail Analytics Leader Michael Haydock and IBM Enterprise Marketing Management Executive Director John Squire.
A few takeaways from the dinner:
- A fundamental shift has been taking place in retail – power is shifting from the retailer to the consumer through the use of technology. However, retailers are working hard to maintain, and even grow, market share. Customer satisfaction is a main focal point. Now, there are multiple touch points to reach the consumer (through personalized promotions, mobile websites and social sites like Facebook).
- Although e-commerce is posting huge comps (YOY) versus their brick and mortar counterparts, mobile devices are not driving the sales. Size of screen and limitations on mobile content are some of the primary challenges. When shopping for a fashionable dress from Elie Tahari, or the latest in technology on a site like Amazon.com, the typical cell phone screen just doesn’t cut it. Not surprising, in a “statistically insignificant” but real poll taken of my students (who are Gen Z “trendsetters”) only 8.3% actually use their smartphones to shop.
- Social is becoming a powerful player in the retail space. According to a global survey by IBM, up to 84% of consumers rely on their social networks when researching new products. When buying online, shoppers coming from a social network convert at 2x the rate of other non-social network channels.
While the majority of what we hear about the economy is gloom and doom, retail sales look like they’ll be fairly healthy this season according to Mike Haydock, who predicts, using decades of Census data and analytics technology, that jewelry sales will be up ( +7.7% Nov. 2011 vs. Nov. 2010 and +4% YOY for December). Clothing and health & beauty categories will also be strong this year, according to Mike.
Another “statistically insignificant” but real poll conducted on my students at FIT yielded a slightly more conservative outlook on shopping habits for the holidays – slightly higher than LY but the poll was based on “holiday gifts.” Economic uncertainty, including an employment rate remaining fixed at 9.1% for September, announced layoffs of 30,000 at Bank of America, a tumultuous stock market, issues with European debt, and recessionary worries have prompted the response from my students. The speed at which information flows faster than the aftershocks of the recent earthquake on the East Coast demonstrate that technology is a “game-changer”. News and information are fast and furious…