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Sun Microsystems' Survey of Holiday Shopping Habits Puts Retailers on Notice

Posted on: Wednesday, 1 December 2004, 15:00 CST

SANTA CLARA, Calif., Dec. 1 /PRNewswire-FirstCall/ -- According to a new survey on consumer shopping patterns this holiday season released today by Sun Microsystems, Inc. , 91 percent of American consumers will walk out of a store and shop elsewhere if they cannot find the particular gift they want. Adults online who plan to shop for gifts this season(1) are equally unforgiving of online retailers that do not have the product they want when they want it -- only four percent would buy a different gift on that same site. Technical hitches on websites are also likely to result in lost revenue for retailers with only 35 percent of consumers indicating that they would come back and try later. The survey's findings confirm that retailers unable to meet consumer demand and deliver what they want, when they want it, may lose money to competitors. The survey was conducted by Harris Interactive(R) on behalf of Sun Microsystems, Inc.

(Photo: http://www.newscom.com/cgi-bin/prnh/20041201/SFW094-a

http://www.newscom.com/cgi-bin/prnh/20041201/SFW094-b )

At a time of year when consumers spend the most, losing customers could translate to a worse year, overall, for that retailer. Sun Microsystems, which will have a presence at the National Retail Federation (NRF) event in January, believes that retailers who have made smarter technology investments in four key areas -- lead time optimization, supply chain management, mark down optimization and labor force management -- will likely have an advantage over their competitors this holiday season.

"Retailers who have not invested in smart processes and enough compute power to handle seasonal spikes in demand will feel enormous pain," said Mike Green, vice president, retail industry, Sun Microsystems. "Harris Interactive's research confirms that we live in a culture in which instant gratification is synonymous with customer service and it is now the standard expectation of shoppers. Add to that the compliance demands of Sarbanes-Oxley and it would be surprising if what retailers spend on technology did not increase again in 2005."

Other Key Survey Findings:

-- Virtually all of American adults, 99 percent, who plan to shop for

holiday gifts this year, would buy some of their presents at a brick

and mortar store. Only 16 percent of those surveyed expect to do all of

their seasonal shopping in stores, confirming the transformation in

consumer shopping habits over the past decade.

-- 53 percent plan to do up to half of their shopping online; 31 percent

would purchase at least a quarter of their gifts at online stores. 37

percent plan to engage in up to half of their shopping through

catalogues, television or on the phone. This figure jumps to 61 percent

among 18-34 year-olds.

-- 60 percent of adults, who plan to shop for holiday gifts this season,

would stroll into another physical retailer they cannot find the gift

they want in a store, while another 31 percent would go online.

-- Only four percent of online adults, who plan to shop for holiday gifts

this season, would buy a different gift at the same online retailer if

they could not find the gift that they originally wanted; 51 percent

would visit a different online retailer if they could not find their

gift at their first option and 29 percent would opt for visiting a

store.

-- Reinforcing how critical business continuity is, 42 percent of online

adults planning to shop this season would visit another online retailer

or a store if a website they visited was experiencing technical

problems. Only five percent would contact customer service as an

alternative; 35 percent would try the site again later.

Smart Technology Investment Delivers Happy Customers

To meet the demands of sophisticated, impatient consumers with a number of retail options open to them, Sun believes there are four critical areas of focus for their retail customers -- whether they are bricks and mortar or online. In all of these areas, smart technology investment strategies are critical to bottom-line success:

-- Lead time optimization makes sure that the right product is in the

right store at the right time and eliminates stock-outs.

-- Supply chain management helps ensure that the link from the sourcing of

product through transportation and warehousing to the store is timely,

efficient and unbroken. A key technology revolutionizing this chain is

Radio Frequency Identification (RFID) that allows products to be tagged

and monitored from source to shelf.

-- Mark down optimization focuses on the need to eliminate costly

overstocked product as quickly as possible by sending it to an outlet

store or putting it on sale.

-- Labor force management is critical with the peak demand of the season

and the consumer expectation of high customer services levels. With 300

percent annual employee turnover in the retail world and Sarbanes-Oxley

compliance in effect, identity management technology is becoming

critical to keeping track of temporary employees.

"Technology exists to transform how retailers optimize product and labor management and improve the shopping experience for demanding consumers," Green explains. "Happy, satisfied customers who come back again and again is the ultimate target for all retailers particularly at a time of the year when the most money is spent."

An extensive Q&A with Mike Green, Sun's retail expert, is available at: http://www.sun.com/aboutsun/media/features/green_qa.html

Methodology

Harris Interactive(R) fielded the study from November 16-18, 2004, via its QuickQuery(SM) online omnibus, interviewing a nationwide sample of 2,125 U.S. adults (aged 18 and over), of whom 1,979 plan to shop for holiday gifts between Thanksgiving and New Year's Day, and 630 are aged 18-34. Data were weighted to reflect the total U.S. adult population on the basis of region, age within gender, education, household income, race/ethnicity, and propensity to be online. Data were also weighted to reflect the total U.S. online adult population. In theory, with a probability sample of this size, one can say with 95 percent certainty that the results have a statistical precision of plus or minus 3 percentage points. Sampling error for the results of the 18-34 year old sub-sample is plus or minus 6 percentage points. The online sample was not a probability sample.

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision -- "The Network Is The Computer(TM)" -- has propelled Sun Microsystems, Inc. to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://www.sun.com/.

About Harris Interactive(R)

Harris Interactive Inc. (http://www.harrisinteractive.com/), the 15th largest and fastest-growing market research firm in the world, is a Rochester, N.Y.-based global research company that blends premier strategic consulting with innovative and efficient methods of investigation, analysis and application. Known for The Harris Poll(R) and for pioneering Internet-based research methods, Harris Interactive conducts proprietary and public research to help its clients achieve clear, material and enduring results.

Harris Interactive combines its intellectual capital, databases and technology to advance market leadership through U.S. offices and wholly owned subsidiaries: London-based HI Europe (http://www.hieurope.com/), Paris-based Novatris (http://www.novatris.com/), Tokyo-based Harris Interactive Japan, through newly acquired WirthlinWorldwide (http://www.wirthlinworldwide.com/), a Reston, Virginia- based research and consultancy firm ranked 25th largest in the world, and through an independent global network of affiliate market research companies. EOE M/F/D/V.

(1) This season defined as the time between Thanksgiving and New Year's

Day.

For more information, contact:

Aaron Cohen

Sun Microsystems

415-294-4207

aaron.cohen@sun.com

Ivy Zuckerman

Ogilvy Public Relations for Sun

415-677-2740

Ivy.Zuckerman@sun.com

Photo: http://www.newscom.com/cgi-bin/prnh/20041201/SFW094-ahttp://www.newscom.com/cgi-bin/prnh/20041201/SFW094-bAP Archive: http://photoarchive.ap.org/PRN Photo Desk, photodesk@prnewswire.com

Sun Microsystems, Inc.

CONTACT: Aaron Cohen of Sun Microsystems, +1-415-294-4207 oraaron.cohen@sun.com; or Ivy Zuckerman of Ogilvy Public Relations,+1-415-677-2740 or Ivy.Zuckerman@sun.com, for Sun

Web site: http://sun.com/

Source: PRNewswire-FirstCall

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