The 2004 Retail Tech Trends Study by RIS News asked retailers: "What Scares You about Wal-Mart?"

Almost half (48 percent) stated that their main concern is Wal-Mart's unprecedented purchasing power and interestingly 47 percent indicated disregard. Only 11 percent mentioned that Wal-Mart's global reach was a cause for concern. The survey shows that retailers have a complex view of Wal-Mart, the world's largest retailer claiming sales of $256 billion annually and gobbling up market share in a myriad of categories from toys and games to clothing. The editor of RIS News speculated that the key to competing with Wal-Mart is through differentiation in a competitive marketplace. Mark Elliott, vice president, Retail, Lawson Software, a leading IT solutions provider added, "This compels retailers to focus and even define possibly for the first time their core competencies and to better communicate their competitive point of difference and what makes them unique. The bottom line is not for retailers to go head to head with Wal-Mart like K-mart did, but to employ sophisticated retail software solutions that give retailers in-depth knowledge of who their customer is and ways to increase profitability and streamline operations."

It's All about the Customer: Retailers Increase their Understanding of the Customer

The study found that retailers today are placing more emphasis on getting to know their customers and engaging them in ways that generate important and competitive information based on customer metrics. Customer metrics is not a new retail concept, it has been around for years, but it is being done today with more sophistication and "with gusto." As a result, more and more retailers are developing marketing and promotional programs based on customer analysis. More state-of-the-art customer-centric tools are now in place in an effort for retailers to better understand their customers and basically what makes them "tick." Nearly half of the study respondents report being involved in customer data and intelligence projects - 32 percent in the last three years and 14 percent currently.

The RFID Era Begins

14 percent reported current involvement with RFID (radio frequency identification) projects. Gaffney said, "This percentage is surprisingly high for a technology that is relatively brand new. We expected that RFID in the supply chain would hardly register as a blip on the radar screen, especially since Wal-Mart announced its RFID strategy last spring 2003. This is a good indicator that there are many more retail pilots underway."