Manhattan Associates Predicts Retail Trends to Watch in 2013 ...

Manhattan Associates Predicts Retail Trends to Watch in 2013 ...

Manhattan Associates Predicts Retail Trends to Watch in 2013:

Accelerating International Expansion, Mobile-optimised Retail

Operations, Bricks-and-Mortar Retailers Combatting Showrooming

-- Customer service, mobile integration and technology investment key to success --

SYDNEY – Febraury 5, 2013 – Global supply chain optimisation provider, Manhattan

Associates, Inc. (NASDAQ: MANH), has released its predictions for retail shopping in 2013,

with developments in web, mobile and social commerce set to continue reshaping the way

goods are bought and sold domestically and in overseas markets. The projections forecast

that continued pressure on margins from prevailing economic conditions and an increasingly

inflationary environment will force both bricks-and-mortar and online retailers to invest in

strategies and technologies that make their assets work harder and that help them reach

new customers in new markets.

“Online-only retailers have, by and large, been the winners to date in the ongoing retail

revolution that continues to see the volume of goods bought online grow and grow, however

traditional bricks-and-mortar retailers are starting to fight back by investing in services and

technologies that will help them remain both profitable and relevant, said Scott Gillies,

Director of Retail, Asia Pacific at Manhattan Associates. “They are implementing what

consumers like about ecommerce into their stores at the same time as investing in their own

online offer and making the overall cross-channel shopping experience seamless for their

customers. They are also, in increasing numbers, selling their goods overseas – through

online and offline ventures - and building infrastructures and associated systems capabilities

that can facilitate this.”

Manhattan Associates identified six top trends that are set to influence the Australian retail

scene in 2013:

1) Online retailers facing tough competition

Online shopping in Australia accounted for 6.3% of all retail sales in 2012 and this is

expected to grow at a compound rate of 14.1% by 2016 1 . Whilst online-only retailers may

have taken a large slice of the online sales market in recent years, bricks-and-mortar

retailers are investing in their multi-channel offering, meaning that online retailers will now

have to up their game to retain market share. Additionally, Australian online retailers will

continue to face pressures from international retailers who are potentially more advanced

than local retailers and have the ability to offer the same products at lower prices. With more

intense competition in the online retail world, traditional etailers will need to focus on

providing an excellent overall service experience by investing in the supply chain and

associated technology that supports an optimised fulfilment process. They may also need to

consider improving visibility of their brand on the high street via pop-up shops, kiosks and

other types of ‘product-less stores’.

2) Mobile commerce is here to stay

Annual smartphone shipments are predicted to soar to one billion globally for the first time

this year 2 and over 172 million tablets will be shipped internationally in 2013 3 . This will

1 Digital Media Research 2012 report by PWC and Frost & Sullivan, July 2012

2 Smartphone sales to hit 1bn a year for first time in 2013 published on Guardian, January 3, 2013

3 Worldwide Quarterly Tablet Tracker, report by IDC, December 2012 published on

increase mobile shopping and force retailers to optimise their websites and online shops for

smartphone and tablet access. Retailers will also need to offer brand, store or product

mobile interactions to their shoppers. Examples include quick response (QR) codes, gift

cards stored in mobile applications like Apple’s Passbook or free applications to scan a

product’s barcode and have an instant quote on delivering the same product direct to their

home. More recently, we are witnessing the emergence of ‘shopping walls’, were consumers

can use their smartphone devices to scan products from billboards, which are then delivered

directly to their home. Locally, the likes of Topshop and Woolworths are already capitalising

on this trend.

3) Winning the showrooming battle

‘Showrooming’, known in the retail world as the practice of a buyer coming into a brick-andmortar

store, finding the product they want, taking pictures or scanning it, and then leaving to

buy online at a lower price, is becoming increasingly more common amongst consumers and

is causing concerns for traditional brick-and-mortar stores. To win this showrooming battle,

retailers will need to build customer profiles based on previous purchases to encourage

future transactions. Many traders are also in the process of deploying omni-channel

strategies, such as buy online and pick up at the store. To connect all channels and obtain a

holistic view of customer activities it will be essential to run an effective and reliable order

management system in tandem with other enterprise systems. Furthermore, those

merchants that are most likely to combat showrooming are those that provide a great instore

experience, run outstanding loyalty programmes, offer private labels or exclusive

brands, embrace both consumer and business technologies, and provide consistent superior

customer service across their multiple and integrated channels.

4) Investment in in-store technology accelerates

The next months will see more technology integration between the store and other channels

to ensure customers get what they want when they are actually in the store. At the front-end,

tablets, apps, QR codes and interactive screen technologies will be used in innovative ways

to facilitate search, payment, and other in-store service options, whilst at the back-end, order

and warehouse management systems as well as supply chain intelligence tools will ensure

stock availability and visibility. Leading brands are already testing interactive screen

technology, for example, Sportsgirl, who have installed interactive mirrors in its fitting rooms.

2013 will see more deployments of these types of initiatives as retailers look to maximise the

potential of their high street real estate. In terms of back-end systems many retailers will

need to take a hard look at the legacy systems that they may have relied on for many years

to get products into the hands of their customers but which simply do not support the new

way of operating in the fast-changing, multi-channel retail world in which they now exist.

5) A seamless shopping experience across multiple channels will become critical

Consumers demand a cohesive view of the retailer, whether in-store, on the retailer’s

website or on its mobile shopping application. They expect to find consistent items, prices,

availability, payment methods and promotions across all channels. To meet these

increasingly complex demands requires creating a single view of the world that can be

facilitated by a distributed order management solution, which provides flexibility in the way

supply chains are able to execute fulfilment. Moreover, an intelligent supply chain

management solution helps to move beyond the simple view of inventory held in stores or at

the distribution centre and widens the field of vision to encompass all the channels through

which the company interfaces with the consumer. By being able to see – and make available

for sale – as much inventory as possible, the opportunity presents itself to sell more.

6) International expansion to accelerate

As international retailers continue to realise the business growth opportunities that exist in

Australia, many international brands will continue to accelerate expansion throughout the

country in 2013. Zara, TopShop and Costco are just a few of the recent international stores

that have enjoyed success in Australia in recent years. Costco for example, recently

announced its plans for further expansion, having received an additional $50 million (AU)

from its American partner to invest in Australia, with three additional warehouses already

under construction or awaiting planning approval. With international stores increasingly

penetrating the Australian market, local brands have a fight for survival on their hands and

will need to maximise service levels, provide a seamless shopping experience for their

customers at the same time as ensuring they’re matching supply and demand in an efficient

and effective manner as possible.

“The longer the supply chain becomes, the more complex and prone to risk it will become. In

the same way that it has enabled the global sourcing process, supply chain IT can also

manage the complexities of feeding stores globally and the increases in throughputs that

ensue. Logistics systems such as warehouse and transportation management; supply chain

planning for replenishment and applications offering supply chain visibility to view, link and

manage a globalised retail operation will be vital” commented Raghav Sibal, Managing

Director, Australia and New Zealand at Manhattan Associates.

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About Manhattan Associates, Inc.

Manhattan Associates continues to deliver on its 23-year heritage of providing global supply

chain excellence to more than 1,200 customers worldwide that consider supply chain

optimisation core to their strategic market leadership. The company's supply chain

innovations include: Manhattan SCOPE® a portfolio of software solutions and technology

that leverages a Supply Chain Process Platform to help organisations optimise their supply

chains from planning through execution; Manhattan SCALE, a portfolio of distribution

management and transportation management solutions built on Microsoft .NET technology;

and Manhattan Carrier, a suite of supply chain solutions specifically addressing the needs

of the motor carrier industry. For more information, please visit

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