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NRF/KPMG Report: Retailers on Expansion Path in 2011

WASHINGTON - Signaling a more optimistic attitude about the economy, retailers said they are intent on expanding store counts - both domestically and overseas - and less focused on cost cutting this year.
     This is according to the ninth annual Retail Horizons: Benchmarks for 2010, Forecasts for 2011 report, conducted by the National Retail Federation's research and education arm, the NRF Foundation, and U.S. audit, tax and advisory firm KPMG.
     The report surveyed 318 retail executives representing 135 North American retail companies, including general retailers, department and specialty stores, supermarkets, restaurants and online companies.
     "Retailers in 2011 will be intent on actively growing their businesses and improving customer insight capabilities, in addition to continuing efforts begun during the economic downturn to stabilize operating costs and focus on financial discipline," NRF said.
     The report found that 41% said that their companies intend to increase domestic store expansions in 2011, up from 25% in 2010. Additionally, 25% plan to expand overseas, up from 21% a year ago.
     In turn, the number of retailers surveyed who said cost reduction/cost containment will remain a companywide strategic initiative dipped to 58% from 81% in 2010.
     Retailers also noted that mobile e-commerce or m-commerce business strategies will be a top focus. "In fact, 69% identify this as a strategic initiative, up considerably from 28% a year ago," NRF said.
     "It's quite obvious retailers are anxious to put the recession behind them and build upon their customer service initiatives, enhance their mobile platforms and even grow their footprint," said Katherine Mance, executive director, NRF Foundation
     Added Mark Larson, partner in charge of KPMG's retail group: "These findings dramatically demonstrate that retail expansion is back on the agenda. After several years of belt tightening, retailers are also ready to begin experimenting again with new brick and mortar concepts, hoping to appeal to shoppers interested in buying discretionary items once again. They will, however, move ahead with cost discipline in mind."
     Other survey highlights included:
     • With significant changes in customer shopping behaviors, 74% of retailers in 2011 will increase their consumer insight and data gathering initiatives, up from 65% last year;
     • While 56% of retailers surveyed in 2010 said customer service would be a top priority, 75% said it would be in 2011;
     • The number of retailers who report using Twitter jumped from 61% in 2009 to 79% in 2010, and now an additional 18% said they are planning on using the social networking site for their e-commerce program during the next 18 months;
     • In reviewing customer insight initiatives, 78% of the execs ranked customer loyalty programs first, up from 65% a year ago;
     • 80% of retailers surveyed said leadership development will be a top priority in 2011, up from 69%in 2010;
     • Among supply chain initiatives, greater focus will be made for optimizing the distribution network, increasing to 52% in 2011 from 38% in 2010, and for cross-docking up from 17% to 24%.

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