I recently spent the last two weeks in Europe. I know – that’s kind of like saying “I spent the last two weeks in North America.” It doesn’t mean much without a little more context.

So: I spent one week in London and another week in Madrid. Both weeks were almost entirely focused on cross-channel – what it means and what to do about it. One theme that emerged from both weeks was the idea that the United States is ahead of Europe (in general) when it comes to cross-channel. In some ways that’s true. I think because the environment had been so competitive during the 1990’s in the US – with the rise of Walmart and supply chain “masters” – that some US retailers found they had to be more aggressive in defining some new way to differentiate from the rest. It just happened to be at the same time that online shopping was on the rise.

So maybe US companies stumbled upon the need for cross-channel capabilities a little earlier than everyone else. But I do think there are some distinct evolutionary differences in how retailers will ultimately achieve omni-channel based on some structural differences that exist between retail in the US and retail in European countries.

These are generalities, applicable only maybe at the aggregate, but enough to start a discussion at any rate.

Here’s the first one to get started: Demand Forecasting In RSR’s eCommerce research from January 2012, we found that retailers increasingly are lumping together all digital channel sales – mobile and social primarily – into the same pool as eCommerce. But because of that, a majority of retailers expect the growth in sales coming from digital channels will easily exceed 10% in the next three years, and hover closer to 20-25%. That’s significantly more than most countries post as their average online sales as a percent of retail sales – the UK and US tend to sit at almost 10% right now. From a demand forecasting perspective, it means that the online channel’s demand forecast is going to be big enough that it can no longer be treated as “a large store” or a rounding error in the buy made for stores.

Additionally, online channels offer an opportunity for new kinds of demand signals – like intentions and sentiment expressed through social channels. From our research on demand forecasting in May 2011, we found that clear majorities of retailers believed there was at least some value in using Facebook, Twitter, YouTube, and check-in apps in that way. These two trends – online sales’ growth and the advent of new forecast signals – have the potential to make a big impact on how demand is forecasted.

But European retailers – in general – are better positioned to take advantage of those trends than their American peers. Again, in general, the US has historically been a less expensive place to hold inventory. Retail and warehouse space is cheaper, on average, in the US than in Europe, and transportation costs are also cheaper. For US retailers, it means there is much less cost pressure involved in using inventory as a buffer. So the discipline of forecasting is generally less well-developed in the US than Europe.

Demand forecasting, when used in the US, tends to live specifically around replenishment, rather than as an entrée to merchandise planning – a “supply chain” capability, rather than an enterprise capability. This also means that different forecast models – say, for replenishment vs. for setting prices – rarely get reconciled across the enterprise in American companies.

In Europe, retailers tend to approach demand forecasting as an enterprise capability that gets translated across functions, with an aim to reconcile at least assumptions, if not outright results

big changes are promised when it comes to demand forecasting. I think a lot of retailers are still in the early stage of evaluating how well “intention” information coming out of social media can actually be used to predict anything, let alone something as generally mathematically disciplined as demand forecasting. But all the interest in Big Data says that at least some retailers believe that all of that data being generated out in social channels has got to be useful for at least something.

When it comes to cross-channel, European retailers may well be in a stronger position to take advantage of that “something” than US retailers. So, advantage US?

Not for long. Part One of an Occasional Series Demand forecasting is one six areas where I’ve seen some differences between US and European retailers. The other five are price transparency, inventory localization, inventory optimization for cross-channel, personalization/relevancy, and store labor. I’ll write about each of these in the coming future.

And, if you’ve got a strong opinion, I’d love to hear any other differences you’ve found to exist. Let me know what you think!