Gartner SCM (1)

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User Survey Analysis: Retail Supply Chain Trends, Europe, 2010

Jeff Roster, As of September 2010

Overview

The intent of the survey:- To advise technology and service providers regarding

the European retail sector's current and future adoption plans and investment priorities for IT.

- To identify what retailers perceive to be the key trends, drivers of and barriers to technology spending.

The study was conducted in the fourth quarterof 2009. This document completes a series of three documents looking at European IT spending behaviors.

Respondents to the study were located in France, Germany and the United Kingdom.

Key Findings

Supply chain spending will build steam through the second half of 2010 and will increase in 2011.

Order management systems will enjoy the strongest demand through 2011.

RFID has gained traction in general and specialty retail. Grocery is now embracing RFID.

Quick and late adopters of IT will start the majority of new initiatives in order management systems, sourcing systems, transportation management, warehouse management systems and RFID.

Recommendations Develop an RFID point of view. Retailers are increasingly likely to

consider the impact of RFID capability for their supply chain and in store experiences. It is critical that you help clients understand what RFID can and can't do.

Prepare for moderate spending recovery in supply chain initiatives through 2011. Prioritize your client base, focusing on quick and late adopters, and nonadopters who are planning more projects than aggressive adopters.- Lead with order management systems through 2010 and sourcing

systems in 2011.- Focus on general retail. In all the categories surveyed, this segment offers

the largest growth opportunity. Develop software as a service (SaaS) offerings with built-in best

practices to attract more Tier 2 and Tier 3 retailers. Tier 2 retailers are interested in many supply chain applications, but this group will be unreachable selling currently priced enterprise software.

Survey Objective and Methodology The intent of the 2009 Western European retail

survey is to understand the European retail sector's current and future adoption plans for IT.

Methodology statement:- The data was collected from November and December

2009. The respondent pool consisted of 61 senior-level executives in retailing.

- This data, while older, still illustrates trends Gartner is observing in inquiry patterns, trade press coverage and ongoing Gartner research.

General Retail28%

Hotels/Restaurants28%

Specialty Retail24%

Grocery/Supermarket20%

Respondent Demographics

N = 61

Size of Retailers Subsegment

$250 Millionto Less Than$500 Million

46%

$500 Million to Less Than $1 Billion

13%

$1 Billion or More

41%

Respondent Demographics (Continued)Country

N = 61

United Kingdom28%

France33%

Germany39%

European Retailers Resume Moderate Spending on Supply Chain Initiatives

Question: What best describes your company's status with supply chain systems?

N = 61

10

41

43

54

70

3

2

2

3

5

3

7

3

7

10

7

5

3

8

2

0 20 40 60 80 100

RFID

Warehouse Management Systems

Transportation Management Systems

Sourcing Systems

Order Management Systems

Percentage of Respondents

Up-to-Date Technology Started but Not Finished Will Start This Year Will Start Within Two Years

63

76

25

4 4 4

0 20 40 60 80 100

Tier 2

Tier 1

Percentage of RespondentsUp-to-Date Technology Started but Not Finished Will Start This Year Will Start Within Two Years

General Retail Provides Best Opportunity in Order Management

Tier (Percent)

Question: Please check the one column that best describes your company's status with order management systems.

Segment (Percent)

N = 61

29

47

67

83

6

7

18

8

6

18

8

0 20 40 60 80 100 120

Hotel/Restaurant

General

Specialty

Grocery/Supermarket


Nonadopters Plan to Outpace Other Profiles in Spending on Order Management SystemsQuestion: Please check the one column that best describes your company's status with order management systems.

Adoption Profile

N = 61

60

70

73

75

20

9

20

10

9 5

0 20 40 60 80 100

Nonadopter

Late Adopter

Quick Adopter

Leading-Edge Adopter


61

38 13

4

13

11

13

0 20 40 60 80

Tier 2

Tier 1


General Retail Planning Major Investments in Sourcing Systems Through 2011Question: Please check the one column that best describes your company's status with sourcing systems.

N = 61

Tier Segment

29

47

67

83

6

7

18

8

6

18

8

0 20 40 60 80 100 120

Hotel/Restaurant

General

Specialty

Grocery/Supermarket


Nonadopter Retailers Planning Major Investments in Sourcing SystemsQuestion: Please check the one column that best describes your company's status with sourcing systems.

N = 61

Adoption Profile

40

60

50

50

20

3 3

14

20

3

14

0 10 20 30 40 50 60 70 80 90

Nonadopter

Late Adopter

Quick Adopter



General Retail Looks to Be the Best Bet for New Opportunities in TMSs

Question: Please check the one column that best describes your company's status with transportation management systems.

N = 61

Tier Segment

45

48

4 4

4

4

4

0 20 40 60

Tier 2

Tier 1


18

41

53

67

6 12 12

0 20 40 60 80

Hotel/Restaurant

General

Specialty

Grocery/Supermarket


Quick Adopters Provide the Best Growth Opportunity

Question: Please check the one column that best describes your company's status with transportation management systems.

N = 61

Adoption Profile

40

37

50

50

5

3

5

3

5

0 10 20 30 40 50 60 70

Nonadopter

Late Adopter

Quick Adopter



Tier 1 Retailers Planning WMS Investments Through 2011Question: Please check the one column that best describes your company's status with warehouse management systems.

N = 61

Tier Segment

38

44

13

8 8

0 20 40 60 80

Tier 2

Tier 1


12

41

53

67

6 6

18 12

8

0 20 40 60 80

Hotel/Restaurant

General

Specialty

Grocery/Supermarket


Quick Adopters Look to Be the Best Bet for Growth

Question: Please check the one column that best describes your company's status with warehouse management systems.

N = 61

Adoption Profile

60

40

36

50

5

3

14

3

9

0 10 20 30 40 50 60 70

Nonadopter

Late Adopter

Quick Adopter



Grocery/Supermarket Aggressively Developing RFID Capabilities

Question: Please check the one column that best describes your company's status with RFID.

N = 61

Tier Segment

14

12

12

4 8

9

4

0 10 20 30 40

Tier 2

Tier 1


18

20

6

7

17

6

8

6

7

0 10 20 30 40

Hotel/Restaurant

Grocery/Supermarket

General

Specialty


Nonadopter Retailers Could Become Largest Users of RFID

Question: Please check the one column that best describes your company's status with RFID.

N = 61

Adoption Profile

20

7

14

20

5

3

5

3

14

0 5 10 15 20 25 30 35 40 45

Nonadopter

Late Adopter

Quick Adopter



Methodology

The data was collected during November and December 2009 from a respondent pool of 61 senior-level executives in retailing. Screening questions were used to determine detailed IT strategy and spending plans. Survey respondents had significant IT decision-making authority.

While this data is older, it illustrates trends Gartner is observing in inquiry patterns, trade press coverage and ongoing Gartner research.

19

Definitions Gartner defines retail tiers by revenue. Tier 1 retailers have yearly

revenue of more than $1 billion. Tier 2 retailers have yearly revenue of from $250 million to $1 billion. Tier 3 retailers have yearly revenue of from $50 million to $250 million. Retail subsegments are made up of general retailers (nonspecialized stores), specialty stores (building materials, hardware, automotive, fuel, apparel, furniture, miscellaneous and nonstore), grocery stores (food, beverage and tobacco stores) and, finally, convenience stores.

The retailer adoption profile includes four classifications: - Leading-edge adopter These retailers are at the cutting edge of

technology. - Quick adopter These quickly follow the leaders in technology adoption. - Late adopter These retailers typically wait until a technology has been

proved, then consider adoption.- Nonadopter These retailers adopt new technology only when it

becomes necessary.

Gartner SCM (1)

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