Blog: William McKnight

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June 25, 2006

Gas increase affect on retail industry

An article I recently published will be verticalized for the retail industry. I was asked to give my thoughts about trends facing those information management programs, based on my work in that industry. Although it may not seemingly be an information management concern, gas price increases are difficult to avoid as a major trend affecting retail as well as other industries.

Information management programs like data warehouses and master data management are being used to improve the analytic capabilities of retail organizations. This is being done to enable the natural follow-on to those activities that would place higher costs on long transport of items. Call it an economic “re-localization” or whatever you wish, but it is an inevitable result of current trends taken into the future. Did you know, from the supply side, the food industry operates under the presumption that the average piece of food we (U.S.A. citizens) purchase travels over a thousand miles from its origin!? This is only scalable when oil/gas is cheap.

Information management is naturally immune to heavy transport costs – at least on the surface. However, much of information management is an enabler of other highly affected industries like retail, consumer goods and energy. Some great thinkers in these industries are getting ready with their information for a continued increase in gas prices to the point where transport will become a primary determinant of product mix.

In the future, and who knows how long, if trends continue, people will come to be aware of and appreciate the production abilities of the land in their region. In a sense, the world may get bigger rather than smaller in our future.

Posted by William McKnight at 2:32 PM | Permalink | Comments (0)