MARKET WATCH
SECTION ONE
SECTION TWO
U.S. Customer Loyalty Program Memberships Top Three Billion: COLLOQUY
U.S. consumers hold 3.3 billion memberships in customer loyalty programs, according to the 2015 COLLOQUY Loyalty Census. This represents a 26 percent increase over the number of memberships reported in the firm’s last census study in 2013.

The biennial report on the scope of U.S. customer rewards programs shows that American households hold memberships in 29 loyalty programs spread among the retail, financial services, travel and various other economic sectors, but are active in just 12 of them.

The corresponding household membership figures in the 2013 census were 22 and nine. Those numbers add up to a drop of two percentage points in the active membership rate, from 44 percent to 42 percent, a 4.5 percent decline. That marks the beginning of a trend, as the active rate declined for the first time in the 2013 report. An active member generally is defined as one who earns or redeems at least once a year.

The 2015 census report shows that specialty store loyalty memberships now total 434 million, exceeding airline frequent flyer memberships (356 million) for the first time, placing second only to credit card reward programs, which account for 578 million memberships. Specialty retailers, such as Best Buy, Container Store and Radio Shack, concentrate on selling one line of goods to a particular clientele and offer a narrow but deep selection in their niches.


New Mobile Solution to Simplify DSD
A mobile solution for direct store delivery (DSD) has been developed to improve performance and simplify the process.
  
The DSD mobile solution from SAP is designed to help consumer products companies improve lack of access to real-time data, limited role and process optimization, and poor route planning. The solution can materially boost top- and bottom-line performance by reducing costs and increasing revenues.

The solution combines sales and logistics process requirements for sales, sales management and other related roles. It orchestrates the complex process of selling and distributing goods directly to the final point of sale. It also manages the activities of sales representatives including visit planning, preselling, van selling, taking sales orders and returns, pricing and promotions, audits and surveys, credit checks and performing mixed roles.

SAP officials say DSD operators spend 90% of their day on driving and product handling instead of direct selling.

“The DSD sales process is a complex one for consumer products companies, who must contend with varying requirements for price, merchandising, promotion and order management across any number of retailers and formats,” said E. J. Kenney, senior vice president, global head of Consumer Industries, SAP.

 
GS1 US Publishes National Data Quality Program Framework
GS1 US has published a GS1 US National Data Quality Program framework, which outlines the key components to help companies establish and sustain effective data quality programs based on GS1 Standards. The framework offers detailed information about the assessment criteria and scoring for the three pillars of data quality: data governance process, education and training protocol, and attribute audit.

Developed with companies in the consumer packaged goods, grocery, general merchandise, retail, hardlines, healthcare, fresh foods, and foodservice sectors, the GS1 US National Data Quality Program is designed for companies of all sizes, product types and distribution channels across multiple industries. In addition, the framework enables each industry to add additional components to address industry-specific challenges.

“The GS1 US National Data Quality Program framework is the culmination of industry stakeholders collaborating to address and confront data quality issues head-on,” said Siobhan O'Bara, senior vice president of industry engagement, GS1 US. “The common approach based on GS1 Standards will promote a higher level of trust among trading partners and consumers that product information is complete, accurate and timely.”


Retail CIOs List Data Security, Omnichannel Initiatives as Top Priorities
Security and digital innovation are this year’s top priorities, according to an annual survey of retail CIOs by the National Retail Federation and Forrester Research. The results come at a time of high-profile data breaches and the growing need to deliver a unified and differentiated customer experience.

The study, Retail CIO Agenda 2015: Secure and Innovate, found that managing data security is the most urgent area for retail CIOs to focus on. Ninety-seven percent of surveyed business leaders placed it at the top of their 2015 priority lists. Forrester predicts that at least 60 percent of enterprises will discover a breach of sensitive data in 2015.

“With the role of the CIO evolving further as a company’s strategic technology innovation leader, the complexity of the business challenges cannot be lost - from data security to new digital customer experiences,” said Tom Litchford, NRF’s Vice President of Retail Technologies. “Our study findings provide insight into the enormous accountabilities placed on the IT leader’s role, which will help C-suite retail executives collaborate more innovatively as they respond to everything from security issues to staying in step with their customers’ needs.”

Omnichannel initiatives is the second of three key business priorities for IT retail CIOs who looking to deliver a seamless experience across touch points to win, serve and retain customers. Three of four executives surveyed (76%) highlight integrating selling channels (e-commerce, mobile, social, catalog and stores), up from 61 percent in 2014 and 64 percent in 2013.

Additionally, six in 10 (63 percent) say modernizing marketing systems to optimize assortment, pricing and inventory, is the number three priority for 2015, on par with 61 percent in 2014 and 62 percent in 2013.

“Today’s retailers must manage an extended range of merchandise to woo customers who are spoiled by vast choices from online specialist retailers,” said Forrester Research Vice President and Principal Analyst George Lawrie. “They also must manage more vendors and merchandise across multiple channels, and support frequent price changes to compete with the automated pricing of Internet specialists.”

Almost a third of surveyed CIOs (30 percent) expect their budget to be flat for 2015. Slightly more - 34 percent - expect an increase of less than 10 percent.


CP Companies’ Data Security Practices Lag Expectations 
Eight in 10 consumers (80 percent) say they are more likely to buy from consumer products (CP) companies that they believe protect their personal information, yet only 37 percent believe that these companies are adequately doing so, according to a new Deloitte study.

Nearly six in 10 consumers (59 percent) state that a single data breach would negatively impact their likelihood of buying brands from a CP company, although roughly half (51 percent) would be forgiving of a CP company that quickly addressed the issue.

“Consumer product companies are collecting more detailed individual profiles, and unfortunately, the more data a company gathers, the more attractive that information becomes to malevolent parties,” said Pat Conroy, vice chairman, Deloitte LLP and consumer products sector leader. “Many of these companies have yet to establish themselves as stewards of consumer data protection, but stand to gain a great deal by strengthening their privacy and security practices and communicating them to consumers. Doing so can help distinguish these companies from competitors and subsequently impact purchase decisions.”


Mobile Consumers Prefer NFC Technology: Retail Study
Mobile phone users overwhelmingly prefer Near Field Communication technology over competing alternatives such as Bluetooth Beacons, QR codes and browsers, according to a new survey. NFC, a standards-based connectivity technology, enables consumers to make transactions, exchange digital content, and connect electronic devices with a touch.

The results of the survey, conducted by research firm Strategy Analytics on behalf of The NFC Forum, also gives retailers insights into providing more relevant, convenient and enhanced in-store shopping experiences and a better understanding of the potential of in-store engagement.

The study revealed the following six opportunities that retailers and brands can use during the customer journey to generate more sales and enhance customer loyalty and trust:

  • Store deals, store Wi-Fi and rewards accounts
  • Multimedia content and real-time store inventory
  • Information about related products
  • A digital, NFC-enabled shopping cart on their phones
  • Product information for large purchases
  • Exact refill cartridge information and one-touch reorder capability.

A related white paper, “NFC Technology: How Changing Consumer Preferences Create New Opportunities for Retailers,” is available on the Forum's website.

The study also revealed that:

  • Over 75% of respondents who used NFC were very satisfied with their experience
  • More than 75% of respondents indicated an interest in viewing additional product information including inventory and availability via NFC
  • Over 60% were interested in an NFC-enabled mobile shopping cart in-store experience and using NFC to order the replacement parts or accessories for products, such as ink and toner cartridges for printers.

“Smart phones continue to change the way we live, interact - and shop,” said Paula Hunter, Executive Director of The NFC Forum. “Thanks to this survey data, we have a much deeper understanding of how retail consumers want to be engaged.”


More Retailers Plan to Expand Mobile Services in Store: Survey
Retailers plan to expand the use of mobile technology for point of sale (POS), customer engagement and payments, according to a new survey by Boston Retail Partners (BRP), a management consulting firm.

The report on the findings, Mobile Technology - Transforming the Customer Experience, outlines how mobile devices will change retail operations and the shopping experience in three key areas:

  • Mobile POS - Nearly 300% more retailers plan to deploy mobile as  checkout device in the next two years
  • Customer-Facing Mobile Services - About 200% more retailers plan to leverage the geolocation feature of mobile devices to enhance the shopping experience within the next three years
  • Mobile Payment - Some 350% more retailers plan to support NFC (Near Field Communication) payments by October 2015 as consumers use the smartphone at checkout.

“Mobile technology enables retailers to break down barriers between the digital environment and the physical store,” said Ken Morris, principal, Boston Retail Partners. “Advancements in mobile capabilities are driving retailers to upgrade and replace technology to keep ahead of the competition and keep up with their very informed, technology-savvy customers. In the payments arena, mobile payments could become the next ‘killer app’ for mobile devices, much like what iTunes did for music.”

The mobile trend can create several opportunities for retailers to enhance customer service, according to BRP analysts. Store associates can use mobile devices for checking inventory for products not immediately available, assisting customers on the selling floor, and supporting transaction processing anywhere in the store.


IRI Forms Alliance with Kline & Company
Information Resources, Inc. (IRI) and Kline & Company, a global market research and management consulting firm, are partnering to serve the worldwide, over-the-counter (OTC) drug and overall consumer healthcare industries. The alliance aims to provide a higher level of data accuracy and an unparalleled, global range of thought leadership on stimulating topics in the consumer healthcare space.

As part of this collaborative relationship, IRI will contribute its granular, widely recognized, point-of-sale (POS) market data, related insights, and thought leadership. Meanwhile, Kline will provide its unmatched historical database, global network, and 360-degree view of the complex OTC drug market.









SECTION THREE