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NEW SURVEY SHOWS RETAILERS NEED TO ADAPT TO CHANGING CONSUMER BEHAVIOR
NRF Participants Believe Retail Media Networks Could Substantially Increase Profits
New York, NY — January 18, 2006
As the retail industry digests holiday trends, retailers are turning to investments in technology innovations to lift profits in 2006, according to a new survey. Capgemini, Intel, and Micro Industries showcased one of these technologies, Retail Media Networks, at the annual National Retail Federation Conference in New York this past week. Retail Media Networks distribute content, including paid advertising, instructional content, shopper navigation and news, through a network of digital devices within a store. This integrated set of media and display solutions offers consumers interactive, self-service and rich-media applications that can impact their purchase behavior in real-time.
This solution addresses the primary needs of retailers and manufacturers, according to a survey of over 100 participants at the 2006 National Retail Federation Conference. The joint Intel, Micro Industries, and Capgemini pulse survey showed that while only a fifth (22%) currently offer digital media in stores, nearly half (52%) of participants plan on offering digital solutions in the near future. The survey also revealed the majority (47%) of participants believe RMNs could increase the sales of a particular item by up to 10%.
Participants suggested that changing consumer behavior (62%) is the biggest market trend in the retail industry, with new technologies (20%), multi-channel retailing (10%) and media fragmentation (8%) following. RMN-based advertising is adaptable to changing consumer behavior. It can be tailored to an individual store brand, specific store locations, or even single operational events; it can be changed or adjusted quickly to respond to consumer reaction; and can even be tailored to an individual shopper by coordination with a store loyalty program. All of these adjustments can be done in real-time, allowing manufacturers and retailers to make subtle changes, either automated or directed, on the fly to maximize sales and profits as conditions change.
RMNs have the potential to build profitability through three enhanced business functions: dynamic operations, compelling experiences for consumers and in-store advertising.
“Those who deploy a Retail Media Network strategy that impacts the consumers buying decision in real time, while providing a better shopping experience will likely create significant business advantage and profits,” said Brian Girouard, Global Consumer Products and Retail Sector Leader for Capgemini. “This survey shows Retail Media Networks have the potential to change the competitive landscape.”
View Retail Media Network Fact Sheet
Other key findings from the Intel, Micro Industries, and Capgemini pulse survey at NRF:
- While more than 45% of participants were retailers, another 39% were information technology vendors, and 16% manufacturers.
- Large and small organizations were well represented. While one third (33%) hailed from organizations with more than $1 billion in annual sales, a quarter (23%) came from organizations with less than $100 million in revenue.
- For those participants that have seen digital media in stores, a large majority (62%) said the technology had a positive impact on their shopping experience.
- The greatest benefit of digital media for consumers is the ability to see the product in use (37%), followed by the ability to receive important product information (26%), and pricing promotions (18%).
About the Capgemini Group
Capgemini, one of the world’s foremost providers of Consulting, Technology, and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience. Through commitment of mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology and thrive through the power of collaboration. Capgemini employs approximately 60,000 worldwide and reported 2004 global revenues of 6.3 billion euros. More information about individual service lines, offices and research is available at www.capgemini.com.
