Retailers have predicted a strong holiday season, but sales rose only 0.1 percent in November, less than expected, according to the U.S. Department of Commerce. Merchants are struggling to keep up with changing customer behavior, and the consequences of misunderstanding it are dire. Witness the bankruptcies of Aeropostale, American Apparel and Sports Authority, all of which miscalculated the importance of e-commerce, among other mistakes. Online sales still make up only a small fraction of overall retail sales (about 8 percent), but that’s where all the growth is.
Innovative technology offers an unprecedented set of tools to measure and analyze what customers are doing. Meanwhile, e-commerce giant Amazon.com Inc. (Nasdaq: AMZN) is experimenting with a slew of physical extensions, including pop-up retail sites and curbside locations for pick-up services, or “click and collect.” To make sense of it all, retailers are increasingly turning to analytics providers for help. Companies that measure consumer behavior, such as JDA Software, Mi9 Retail and ShopperTrak, have become desirable targets for strategic buyers and private equity firms alike.