Mobile Technology Will Decide Who Wins Battle on the High Street

Michelle Remo, “Big 4″ observer
February 14, 2012 /

Retailers and consumer goods companies say mobile technology will be the key driver to maximize sales over the next two years ahead of more traditional ways to generate business such as business intelligence or supply chain management, according to a global survey of CFOs in the sector.

The research suggests that the importance placed on mobile technology varies by country. According to the KPMG Consumer Markets CFO Survey, 36% of UK respondents view mobile technology as key to maximize sales, compared to 46% in Germany, 44% in the US and 50% in India. One of the key reasons for mobile technology being more important in developing countries is the lack of access to broadband and stores so more people are shopping via their smartphones.

Tim Clifford, Partner Consumer Markets at KPMG comments: “Mobile technology will help decide who wins in the retail space. Retailers must embrace mobile technology as an urgent priority or otherwise risk falling behind.

“Mobile technology is dramatically altering the retail experience and changing the relationship between retailers and customers. Success in both developed and emerging markets will depend on the swift adoption of mobile as a device for communicating with customers and for facilitating transactions. Consumer goods and retail companies that are slow to embrace mobile will find themselves struggling to keep up at a time when competition for market share is becoming increasingly fierce.”

Investing in new technologies in order to drive sales seems particularly important against falling revenues in the sector. 47% of UK respondents expect this year’s revenues to be lower than last year’s, compared to 46% in the US, 50% in Canada, 48% in China and 50% in India.

Despite falling sales companies globally are increasing their budgets across a number of key areas, including market expansion, new product development and digital commerce as they recognize the need to invest to keep pace.

The survey also reflects the growing importance of emerging markets for UK consumer companies. Although the majority still see their biggest opportunities for growth in Western Europe (39%), this is closely followed by Asia (excl China & Japan) 26%, India 22%, US and Canada 22% and Central America 13%.

Tim Clifford comments: “For retailers and other players in the consumer goods market the challenge is to respond to a ‘two-speed economy’: On the one hand they need to adapt to slowing consumer demand in the more mature markets by managing risk and cash and destressing the supply-chain. On the other hand, they are under pressure to look for new sources of growth which means investing money in order to tap into the new emerging markets and make acquisitions as the opportunities arise.”

Further, the survey found that 54% of UK respondents say that tapping new middle-class consumers in emerging markets is key to their long-term strategy, compared to 75% in the US, 79% in Australia, 85% in Brazil, 92% in China, 38% of respondents in Europe and 52% in the US and Canada say they have earmarked at least 10 – 20% of their 2012 research and development budget for emerging markets.

Companies globally conduct more frequent risk reviews and sustainability moves up the boardroom agenda.

 

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