TOP
STORIES
 1 of 5
Red Thread: Furniture Company or Change Agent?
Born out of an office furniture manufacturer, Red Thread is having different audio-video conversations than any other integrator — and clients like what it’s saying.
 2 of 5
AV, Sports and Beer… with a Chance of Meatballs
Integrator Real Sound uses JBL speakers, Crown amplifiers, Crimson AV and Key Digital cables to send audio and video throughout this unique three-level building.
 3 of 5
Top 40 CI Influencers Under 40
There was no shortage of candidates for our look at some of the young people who are making a difference for their companies and this industry. See who made the cut for 2014.
 4 of 5
The Rise and Reign of Verticalization
Have we reached the age of requiring integrators to become even more vertically focused?
 5 of 5
Medical Simulation Lab Makes All the Difference in Education
CompView Audio Visual helps California community college district build high-tech nursing education facilities.
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



Recent comments

Thanks for your comment, Derek! While this article was just a brief background about Audinate and Dante, we…

Posted by Chelsea Cafiero on 2014 08 08 · commented on
'What is Dante and Why is it So Popular?'.

Nice Overview Jason!

Integrators should be taking note of these changes and positioning themselves…

Posted by Mark Coxon on 2014 08 04 · commented on
'Stricter California Lighting Standards Take Effect'.

Robert,

It is curious that you just threw in the sentence “Audinate is a member of the AVnu Alliance,…

Posted by Derek R. Flickiinger on 2014 07 29 · commented on
'What is Dante and Why is it So Popular?'.

Casey - another great project! 


Your design and implementation came out a amazing!

Posted by Chanan Averbuch on 2014 07 10 · commented on
'Getting 'Serious' About Boa Lounge Upgrade'.