New York City -- Retailers will pursue major investment in customer relationship management systems, business intelligence systems, and enterprise resource systems for transaction processing, according to a survey of 152 senior financial executives of global retail companies by KPMG International. In improving supply chain efficiency and costs over the next two years, the retail execs, in order of priority, see enhancing distribution structure, investing in production or distribution technology, decreasing inventory levels, and consolidating suppliers as the greatest priorities.
As to how they believe their firms can increase market share, 46% said primarily through organic growth initiatives, 22% said through a mix of organic growth and M&A, and 22% primarily through M&A.
Forty-four percent of the retail executives in the KPMG survey believe that it is "very likely" that their companies will enter new geographic markets in 2011. As to how they will expand, 53% said by opening new stores, 39% said through additional distribution channels (including online), and 21% said through mergers and acquisitions.
Asia (49%) and the United States (48%) were identified as the global regions where the retail executives expect the greatest growth in company sales. The next two regions were Latin America (44%) and India (40%).
The surveyed retailers expect improved financial performance in 2011, as a result of increasing consumer demand, but many indicate that their companies will have difficulty raising prices and sustaining profit margins, In the KPMG global survey, 24% of the retailers expect "significant increases" in financial performance over last year and 51% are expecting "some increase." Only 9% expect a decline in performance. This optimistic view is a result of seeing an increase in consumer demand. In fact, 18% said they've already seen a sustained increase in demand for their company's products and services since the economic slowdown, while 54% expect sustained demand in 2011, and 24% in 2012 or later.
Despite the growth in demand, 58% of the KPMG survey respondents said that their companies will have difficulty raising prices in 2011 and 41% said that their firm