What’s "In-Store” for Retailers in 2007?

Stores magazine, courtesy of our friends at RetailWire.com, has dusted off its crystal ball to see what will happen in 2007. Here's what the editors at the publication predict for 2007.

1. The future's calling: Cell phones are poised to become "the most significant electronic consumer device in history," according to Stores. Next year, retailers will advertise, run promotions and even process payments via the cell.

2. Cheap is the new chic: Retailers need to find ways to bring new unique fashions to the market more swiftly and, oh yes, hold down the price if you're looking to stay competitive in the future. According to Stores, the fast-fashion of retailers such as H&M, Topshop and Zara are among those leading the charge in this area.

3. Demographics assume greater power: Shifts in the nation's demographic profile will continue to shape retail for years and years. In response, retailers will increasingly turn to micro-merchandising and micro-marketing to connect with consumers on a level that addresses their individual needs.

4. “Green” is the new black: Sustainability and social responsibility will be key for retailers as more consumers look to support products and merchants that help make the world a better place to live and shop.

5. Economy hits a speed bump: Retail sales will grow 4.5 percent next year, according to the National Retail Federation. That number will be two percentage points off what the association expects the final tally to be this year.

6. New Rx for supermarkets: Supermarkets are looking to provide consumers with reasons to shop in their stores other than in all the other retail channel options they have available to them.

7. Smart money is on retail technology: Business intelligence applications, contactless payments, kiosks, self-checkouts, biometrics, and radio frequency identification (RFID) are some of the technologies that retail decision makers will be concerned with in 2007…

Warehouse Management Study Finds There are Still a Lot of Homegrown Systems Out There

The Supply Chain Consortium, a benchmarking arm of supply chain and logistics consultant Tompkins Associates, has just released results of a study on warehouse management system (WMS) practices, largely among retailers but also other segments.

There are a number of findings, but what caught our eye was that 45% of respondents said their current WMS is an in-house or custom developed solution, rather than a purchased package.

We know many retailers (Wal-Mart, Target , Sears, etc.) fall into that homegrown WMS category, and we suspect the percent of home grown systems in retail is higher than in other industries, but the number was still a bit higher than we might have guessed. The report also found that even amongst purchased packages there is still a large amount of customization….

Marks & Spencer Still Very Bullish on RFID, Looks for More

The success of radio frequency identification (RFID) pilots at Marks & Spencer (M&S) likely will lead to widespread use of the technology throughout the retailer’s supply chain.

The U.K. retailer recently announced that it is to start a full rollout of item-level tagging in its clothing departments, while the grocery side is also using RFID to fast-track delivery and receipt of stock, and increase visibility in the supply chain.

“Now that we have improved speed, accuracy and visibility of deliveries from supplier to the depot, we will look to other areas where we can use RFID,” Ian Mumby, Marks & Spencer’s head of food supply chain and logistics, according to a report out of the U.K.

Mumby said the firm’s most advanced suppliers already read the tags at various points in the supply chain, from the production process to dispatch.

“It means that suppliers can always be 100 per cent certain of how many trays and what type of products they have dispatched,” he added. “The opportunity to improve visibility in the supply chain and ensure that we get the right volume of goods into our stores is very exciting.”…

The Return of Cheap Oil?

While the arguments continue over “peak oil,” alternative fuels, and other energy issues that ultimately impact transportation costs and other supply chain decisions, one expert says the drop in oil prices we’ve seen lately is just starting.

Michael Lynch, of Strategic Energy and Economic Research in Massachusetts, says oil will dip to $45 per barrel in 2007, and maybe back into the $20s by 2008. Why? Good old supply and demand – rising prices have causes a flood of exploration and oil supply is coming on-line from many areas of the globe.

Lynch’s forecast, however, is not the one most experts subscribe to…

Iron Ore Costs Will Rise in 2007, but less So than 2006 – Steel Prices Will Still Likely Rise

After absorbing iron ore costs of almost 20% in 2006, steel makers are gearing up for tough negotiations with iron ore producers for 2007 pricing. As the talks begin, consensus is building that prices will rise between 5% and 10%.

Interestingly, China, with its voracious appetite for steel, appears to be taking the lead in the negotiations. In 2006, China tried hard to resist the huge iron ore price increases, but ultimately failed.

As we’ve noted previously, some steel companies across the globe are looking to become more vertically integrated and purchase iron ore mines, to buffer them from the tight supplies and volatile prices. While iron ore cost increases will be down from this year, it still seems like steel consumers will see strong upward price pressure again in 2007 based on raw material costs…

Do you have any comments on this week’s supply chain news bites? What types of news is of most interest to you. Let us know your thoughts.