TOP
STORIES
 1 of 5
ESPN Makes Digital Splash with $178 Million SportsCenter Upgrade
Mobile displays, video floor, social media wall among many highlights of the new SportsCenter digital studio DC-2.
 2 of 5
Mission Critical 411 on Control Room Integration
Integrators with long histories in this space discuss how projects and customer demands are different than others.
 3 of 5
How Boston College Gets Fans off Comfy Couches, onto Metal Benches
Boston College installs new Daktronics 13HD LED video boards at Alumni Stadium to draw fans to the in-game experience.
 4 of 5
Top 10 Dante-Enabled Products
Check out 10 key products that have received the increasingly important Dante touch.
 5 of 5
An AV Guy's Guide to Talking IT
This quick glossary of IT terms will at least help AV integrators demonstrate some basic network knowledge when speaking to their clients' CIOs and IT directors.
Retail Market Remains Sluggish, Elusive
How do you succeed in a vertical market pummeled by the economy and Internet shopping?

Article


Retail
There's little question about whether or not well-designed technology solutions can enhance the in-store shopping experience.
February 08, 2013 | by Tom LeBlanc

It’s no surprise that the retail vertical market is growing more slowly than the rest of the commercial integration market. Retailers have been and continue to be hit hard by five years of recession and slow economic recovery.

Since retail integration clients don’t necessarily have swelling budgets, it’s necessary for integrators to provide them with real, quantifiable return on investment (ROI).  The need not only to understand the clients’ organizations, but to understand their customers’ experience is essential. The goal of providing meaningful technology solutions that spur sales is lofty. The consultation process and lead times for retail projects are exceedingly long.

In short, retail integration isn’t for every integrator. Within the challenges, however, are opportunities for those integrators that can effectively serve retail clients.

Crunching the Numbers

Only 35 percent of retail market integrators surveyed by CI Research say their revenue from that vertical was up in 2012 versus that of 2011. Meanwhile, only 47 percent expect their retail market integration revenue to climb higher in 2013. 

Those are modest expectations compared to how integrators overall feel that their businesses will grow in 2013. Taking all commercial vertical markets into consideration, 62 percent of integrators expect their companies’ revenue to increase in 2012, according to a separate CI Research survey.

Surveyed integrators might be overly pessimistic about the retail market. There are clear indicators that retail clients are back to spending money after several recession years in which they generally did not. One reason for optimism is that construction spending in the retail market was up 6.2 percent in 2012 and is projected to be up another 9 percent in 2013, according to the American Institute of Architects.

Construction spending trends don’t necessarily reflect technology purchases, but they do reflect clients that have money to spend. Consider that General Growth Properties, the second largest mall owner, was on pace to spend $1.5 billion on redevelopment projects between 2012 and 2013, according to a Wall Street Journal report. CBL & Associates Properties, which owns 93 U.S. malls, was involved in redevelopment projects at 20 of its properties during 2012; and Westfield Group, owner of 47 U.S. malls, plans to spend $3 billion on redevelopment over the next three years compared to the $800 million it spent over the previous three years, according to WSJ. Not all, but some, of that enormous chunk of capital will be spent on technology solutions.

Need for Reinvention, ROI

The state of the retail market depends in some ways it depends on who you ask about it. For integrators that excel at providing and articulating ROI to retail clients, the market isn’t bad at all.

Selling integrated technology solutions to retailers can be “a constant battle to show ROI,” says Edwards Technologies’ Roberta Perry.

It’s noteworthy that the mall spending data cited by WSJ continually refers to “redevelopment” plans. That’s because brick-and-mortar retailers understand that in order to set themselves apart from online competitors, they need to add value to their in-store experiences. Technology is one way to do that, says Roberta Perry, VP of business development for El Segundo, Calif.-based Edwards Technologies.

“The retail community knows they have to do something to further engage the consumer,” she says. “They have to find better ways to convert shoppers into buyers, more effective ways to find traffic. They know that.” 

About the author

Tom LeBlanc - Editor-in-Chief, CI,
Tom has been covering electronics integration since 2003. Prior to being named editor-in-chief of CI, he was senior writer and managing editor of CE Pro. Before that, he wrote for the sports department of the Boston Herald. Migrating to magazines, he was a staff editor for a golf publication and an outdoor sports publication. Follow him on Twitter @leblanctom.
View all posts by Tom LeBlanc
Article Topics
Social Bookmark or Share This
  • Facebook
  • Twitter
  • Digg
  • Del.icio.us
  • Yahoo! Bookmarks
  • Google Bookmarks
  • StumbleUpon
  • Technorati
  • Reddit
  • Windows Live
  • LinkedIn
  • Evernote
  • E-mail


  • Latest
  • Blogs
  • Photos
  • Resources
Tales of the Mentors Who Made Us Who We Are

CI, along with InfoComm, NSCA's Chuck Wilson and Zdi's Jay McArdle, takes a step back to appreciate the mentors who get young, tech-savvy professionals excited about a career in the integration industry.

Redefining the Control Systems Programmer
An AV Guy's Guide to Talking IT
What Are You Thinking… Seeking RMR From Yesteryear’s Trends?
5 Strategies for Selling and Renewing Service Plans
View more blog posts
InFocus LiteShow 4 Transmits Digital Content to Projectors & Displays

The LiteShow 4 easily connects to projectors and displays to create a 150Mbps wireless access point with a range of 300 feet to allow Windows, Macs and mobile products to wirelessly transmit video.

ESPN Makes Digital Splash with $178 Million SportsCenter Upgrade
How Boston College Gets Fans off Comfy Couches, onto Metal Benches
Top 10 Dante-Enabled Products
A Brief Conversation With Dante
View more photo galleries
White Paper:
Campuses Banking on Emergency Notification, Upgrades

A survey from CI sister publication Campus Safety shows that one in two campus protection professionals say their institutions plan on or are considering deploying new/upgraded emergency alert solutions in the next year.

Webcast: Unscrambling Your AVB, HDBaseT Questions
White Paper: Technology Brief on Control Rooms
White Paper: The Voice: How to Design Emergency Communication Systems with Announcements
White Paper: Digital Signs of the Times
White Paper: A Snapshot of the Onsite Freelance & Contractor Workforce
Webcast: 7 Ways an Integrator Can Save Clients Money on Utility Costs
White Paper: 3 Dazzling LED Panel Implementations
View more papers or webcasts



Recent comments

Thanks for your comment, Alan. I understand and appreciate your frustration about the pictures and belief…

Posted by D. Craig MacCormack on 2014 10 14 · commented on
'Inside Look: Long Island Railroad's Hiperwall Command Center Unveiled'.

Too bad the pictures only show a promo of IntraLogic and no real or simulated picture of what was used during…

Posted by Alan M Hoffberg on 2014 10 14 · commented on
'Inside Look: Long Island Railroad's Hiperwall Command Center Unveiled'.

Benson - nicely done.  This is a trend in some of the smarter integrators in AV, but needs the kind of…

Posted by dave fahrbach on 2014 10 10 · commented on
'5 Strategies for Selling and Renewing Service Plans'.

For sure it’s not always better! Maybe just selling better!

Posted by Argis on 2014 10 06 · commented on
'Getting Over That Growth Hump: 5 Questions to Ask Yourself'.