Caitlin Storhaug
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Allen Valahu
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October 09, 2002
European Retailers have Untapped Opportunity to Improve Speed and Effectiveness of “Supply and Demand” Decisions, According to Accenture Research

Analyzing and Sharing Customer Data are Two Key Challenges

PARIS and LONDON; Oct. 9, 2002 Although the majority of European retailers collect information on customers’ purchasing preferences and behaviors, this information is not being used to make better, faster decisions on key supply and demand issues such as pricing, promotion, merchandising and inventory planning, according to new Accenture research.

While more than two-thirds (68 percent) of retailers surveyed reported having information on more than half of their customers, fewer than one-half (46 percent) of respondents said they share customer information across their organizations on at least a weekly basis.

“Effectively and quickly using customer information to make better decisions about every part of a retailer’s business is critical to a company’s ability to grow profitably and outpace its competition,” said Armelle Carminati-Rabasse, partner in the Accenture Retail industry group. “Our experience shows that significant value can be gained from customer data, but insights from this information must be spread throughout the organization from marketing to logistics to the CEO’s office.”

The research shows, however, that sharing of information has been largely limited to retailers’ marketing departments, which collect and use more customer information than any other department. A large majority (70 percent) of retailers said that their marketing departments are responsible for customer data collection and mining, and an even larger group (88 percent) reported that their marketing departments use the information on a regular basis.

In contrast, only 37 percent of merchandising professionals, 33 percent of the forecasting, planning and replenishment professionals, 32 percent of the C-level suite and 27 percent of both the strategy function and the logistics department report using customer information.

Additionally, retail executives reported an additional challenge. Almost three-quarters (73 percent) of respondents said that despite having access to customer data, they lack the analytical capabilities that enable turning customer information into insight. Indeed, the vast majority (87 percent) regard the use of customer information as a key success factor, but fewer than half (40 percent) of retailers said they have strong skills in this area.

“Executives are generally overwhelmed by the amount of customer data available to them,” said Carminati-Rabasse. Collecting information is only the first step. The winners will be those companies that use technology and analytics to rapidly turn this data into customer insights that result in driving sound business decisions.”

Beyond analytical capabilities, survey respondents reported two other significant issues: having “timely shared, integrated information” (53 percent) and “managing the cost of maintaining data” (39 percent). Almost one-third (29 percent) reported that they consider the technology to mine and analyze the data as a key obstacle.

This survey of merchants across Europe also found that, on average, retailers use multiple sources to collect customer data, with the large majority (73 percent) of companies using customer surveys. Other sources include: buyer feedback (49 percent), Web sites (45 percent), telemarketing (44 percent), loyalty cards (43 percent), external providers (36 percent), suppliers/vendors (34 percent) and credit services (33 percent).

Among other findings of the survey:

How Retailers Use Customer Information

  • Spotting trends and disruptions – 81%
  • Determining the most profitable clients – 72%
  • Driving promotions – 70%
  • Helping determine replenishment numbers – 42%
  • Selecting merchandise for individual stores and determine shelf space and store layout – 40%

Retailers Collect Customer Information, including:

  • Customer profitability – 52%
  • Purchase-behavior information – 77%
  • Geographic information – 69%
  • Demographic information – 68%
  • Promotional efforts – 62%
  • Customer attitude information – 60%

Methodology
Accenture surveyed executives at 100 European retail firms in France, Germany, Italy, Spain and the U.K. during June and July 2002. Respondents at these companies, each of which had minimum global turnover in 2001 of 500 M euros, were Marketing and/or Sales Directors or C-level executives. The survey was conducted by telephone.

About Accenture
Accenture is the world’s leading management consulting and technology services organization. Through its network of businesses approach -- in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities -- Accenture delivers innovations that help clients across all industries quickly realize their visions. With approximately 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.

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