Sales Performance Improvement Is Number 1 Business Priority for Western European Retailers in 2015, According to New IDC Retail Insights Study

A new study by IDC Retail Insights reveals that in 2015 Western European retailers will review and update their sales strategies by taking an "explore, exploit, cash in" approach. In the short to medium term, IDC Retail Insights predicts that Western European retail businesses will search, innovate, and experiment in multiple areas, with the final goal of attracting new (ideally loyal) customers to their brands and protecting their current customer base from competition from other companies active in the same retail segment. However, exploring new consumer engagement approaches will not be enough to ensure retailers' success.

To address changing consumer expectations, IDC Retail Insights recommends that retailers switch from a product-centric view of retailing to a customer-centric view. At the core of omni-channel transformation is becoming channel agnostic from both business and technology perspectives to provide retailers with consumer engagement models that enhance customer awareness, consideration, conversion, and loyalty across the new consumer journey driven by the attributes of the "5I" shopper.

Key findings of the study include:

• "Profit is dead, long live profit" is the business mantra for most Western European retailers in 2015. Due to commoditization in the industry, high market transparency, blurring retail segmentation and competition, and uncertainty, Western European retailers are prioritizing the need to achieve better economic performance.
• In the short to medium term, Western European retail businesses will put in place an "explore, exploit, cash in" strategy. It will be key for retailers to strike the right balance between the exploration of new consumer engagement approaches and the exploitation of their current customer base on their way to the final transformation as omni-channel retailers.
• Security related issues - such as sensitive data protection, loss prevention, and PCI compliance - are no longer major drivers of Western European retailers' business agendas.

"Retail is a low-margin industry," said Luca Bonacina, senior research analyst, IDC Retail Insights. "Margins are under more pressure now than ever because of competition from very different angles, from market transparency, and from consumers becoming increasingly demanding and less loyal. To respond to this and to survive the industry shakeout, Western European merchants are being forced to improve their economic performance. In this respect, retail companies will devote most of their efforts to setting up and putting in place initiatives aimed at improving as much as possible their sales and revenues as well as reducing their costs, especially operational costs, and at the same time keeping an eye on security related business issues."

More insights are discussed in the survey-based study Western European Retailers' Business Focus in 2015 (IDC Retail Insights #GIPW03X, March 2015). The study focuses on retailers and their business priorities, and reviews the short-term initiatives that Western European retail companies will focus on in 2015 and beyond from a business perspective.

To arrange a one-on-one briefing with an IDC Retail Insights analyst or for more information about IDC Retail Insights, please contact Kanupriya at +44 (0)20 8987 7111 or kanupriya@idc.com.