We’re currently putting the finishing touches on our annual “State of the Store ” report, which releases May 9, and we think you’re going to enjoy the story it unfolds. Within, retailer tell us enough has changed in the past 12 months to warrant serious reconsiderations inside their stores: how customers are now using stores, and which technologies are best served to meet their new demands. But some of the most interesting data within, as always, pertains to differences by retailer performance.

When it comes to stores, Winners and laggards aren’t even facing the same set of business challenges.

Figure: Different Lens, Different Picture

Source: RSR Research, May 2012

For Winners, early on in the report they tell us that they recognize their employees need help. But they also recognize the challenge isn’t just in giving their associates access to more product information; it’s in getting more out of them all the way around.

People come to stores for a reason, and the ability to make store execution more consistent – coupled with the ability to make better use of associates’ down time during off-peak hours – is Winners’ top challenge (68%, Figure 3). As expected, Winners are also more sensitive to out-of-stocks and the unnecessary time their store managers spend in the back room.

For laggards, however, these issues pale in comparison. To them, customer price-sensitivity has become all-encompassing.

We saw this in our recent pricing study, where laggards have pre-determined that price has re-emerged as an important concern to customers, without any substantial evidence to support their theory. Some of the most interesting Business Challenges data (not pictured) in the coming report:

• For the entire response pool, out-of-stocks are more of a challenge this year than last (25% in 2012 vs. 15% in 2011). Retailers’ recent tendency to under-inventory stores — coupled with their reliance on supply chains whose points of origin are thousands of miles away — is not without peril.
• The largest retailers seem to have the weakest handle on out-of-stocks: 40% of those whose annual sales exceed $5 Billion identify out of stocks as a primary business challenge: for mid-market retailers ($51 – $999 million dollars), that number is only 14%.
• The smallest retailers are the least sensitive to consumers knowing competitor’s prices (only 18% of retailers under $50 million annually report it as a challenge). For those without the size and leverage to boast low cost pricing, this seems counterintuitive at first. However, providing these “mom and pops ” compete on a service-based business model, this data speaks to a faith in people’s willingness to reward knowledgeable, helpful staff with a slightly higher-cost sale.
• Nearly twice as many retailers report differentiating themselves from their competitors as a business challenge in 2012 (29%, vs. 15% in 2011). As products become more ubiquitously available, the need for a revitalized store experience only becomes that much more important.

We look forward to releasing the full benchmark data next week, and just as we do with any new report, look forward to your comments.