IDC Retail Insights joined a panel discussion hosted at SAP Sapphire 2010 in Frankfurt. The theme of the discussion was how to enable profitable multichannel retail operations. Danielle Tuarze, CSC, Darryl Owen, SAP, and Ivano Ortis, IDC Retail Insights were the panelists. Why multichannel retail profitability is an issue and how multichannel retailers can improve margins?

In a recent supply chain survey, retailers overwhelmingly, among all segments and sizes, reported that "Improving product quality" is their number one supply chain initiative. Completely in line with our 2010 predictions, this response means retailers clearly understand the gravity of the competitive landscape, and have received the consumer message that quality, value and transparency are all equally important.

This is an incredible challenge in light of the dual leading business objectives to increase top line sales and grow profit margins, reported in the same survey. How can a retailer improve quality and increase margins without impacting the product value perception? The answer lays with retailers that are already leading in the development of quality private label brands that meet customer expectations, including Safeway, HEB, Ahold and SuperValu. Let's look more closely at a great example, Safeway, who announced, just a couple of weeks ago (March 2010), that they are assuming full ownership of private label brand development, cutting out the middle man.

Lawson recently announced that, beginning in May 2010, it will offer its ERP and Talent Management applications on the Amazon Elastic Compute Cloud (EC2) infrastructure.   Lawson has a good base of retail experience especially in Food/Drug where they have installations on both coasts in the US with grocers who are seen as technology leaders - Safeway on the west coast (financial applications) and Hannaford Brothers in the east (human resources).  So will Lawson on Amazon (LoA) be a viable alternative for retailers?