Invest, Reinvest and Disrupt: 2019 Recipe for Retail Success
Target is surging right now and CEO Brian Cornell wants to explain why. At the recent NRF Big Show, Cornell said 2018 was the best year Target had in a decade and the reason was investment, reinvestment and disruption.
Here is Cornell’s exact quote as it originally appeared in my recent blog: “You must be able to invest in the present business and tomorrow. You must be willing to reinvest and be willing to invest in your selves. We will never be able to be successful unless we disrupt ourselves.”
2019 Store Experience Study
Cornell’s analysis of Target’s strong financial performance is a good summary of the insights provided by the recently released 2019 RIS/IHL Group Store Experience Study, the first major benchmark retail tech study of the year.
Key findings in the study support Cornell’s recipe for success – invest reinvest and disrupt. Retailers like Target, the one third that outpaced the revenue gains of the overall market, took aggressive steps to adjust to competitive pressures and leap ahead of the marketplace with new initiatives that had no proven path to success until they were tested and launched.
Most, if not all of these initiatives involved a major technology component and many were entirely dependent on IT innovation. The same will be true in 2019. Technology budgets, once considered to be a formula pegged to 1% to 2% of annual revenue, are now rising because retailers that have broken the formula and invested, reinvested and disrupted have achieved the industry’s biggest gains.
Major takeaways and findings in the study include:
- Year-over-year revenue increase in 2019 for national and large regional chains was 4.5%
- Estimated revenue increase for the above group will be 5.3% in 2019
- Of the estimated revenue increase in 2019, 87% will come from store sales
- Top five strategic priorities in 2019 are: Personalizing the customer experience, Empowering store associates, Upgrading CRM/Loyalty programs, Refresing POS infrastructure, and IT transformation.
- Top five emerging Technologies in 2019 are: Proximity/Location-based marketing, AI/Machine Learning, Internet of Things, Microservices architecture and Serverless computing.
- Top five technology investments in 2019 are: Personalized customer journey, Store-owned mobile POS, Track online behavior outside store for personalization, Mobile devices for managers, and Consumer mobile checkout.
To download the report and get a complete set of charts and analysis click here.
February 28 at 11 am. To register for the upcoming RIS webinar that examines key findings in the study click here. It will take place February 28 at 11 am ET.