August 17, 2006 at 08:12 AM EDT
Innovation Is Key to Regaining Pricing Power and Growing Revenues, According to Kanbay Research Institute's 2006 Retail Demand Today Report
U.S. Consumers Rate the Most Desired Retail Companies

ROSEMONT, Ill., Aug. 17 /PRNewswire-FirstCall/ -- Even though consumers in the US today have more places and ways to shop than ever before, industry growth has been cut in half when comparing 2000-2005 to 1995-2000. The primary cause of the decline is due to a lack of retailer innovation, according to Kanbay Research Institute's (KRI) latest report on retail demand. The report, which was released today, is entitled "Retail Demand Today: How Well Retailers Deliver on America's Shopping Desires." The report augments the data presented in Retail Demand Insights 2006, a co-branded report between the KRI and the NRF Foundation and sponsored by SAP Americas, which was released at the NRF's annual convention in January 2006.

The study identifies the top performing retailers in 16 major retail categories:

    -- Auto Parts: Autozone
    -- Books: Books-a-Million and Barnes & Noble (NYSE:BKS)
    -- Clothing Stores: Men's Wearhouse (NYSE:MW)
    -- Cosmetics: Revlon (NYSE:REV)
    -- Department Stores: Kohl's
    -- Discount Stores: Target and Dollar Tree
    -- Drug Stores: CVS/pharmacy (NYSE:CVS)
    -- Electronics: Kodak (NYSE:EK)
    -- Internet/Catalog: Amazon.com and Netflix (NASDAQ:NFLX)
    -- Jewelry & Accessories: Tiffany & Co. and Gucci (foreign)
    -- Office Supplies: Office Depot (NYSE:ODP)
    -- Package Delivery: FedEx  (NYSE:FDX)
    -- Pet Supplies: PetSmart (NASDAQ:PETM)
    -- Specialty Goods: Carters (NYSE:CRI)
    -- Sporting Goods: Sport Chalet
    -- Toys: Hasbro

KRI is an operating unit of Adjoined Consulting LLC, a subsidiary of Kanbay International, Inc. (NASDAQ:KBAY), a global management consulting, technology integration and development, and outsourcing firm. In the 2006 study, KRI conducted 6,674 web-based interviews with U.S. consumers, rating 104 of the leading retail companies to discern how well their desires are being met and identify emerging trends in the industry.

Although retailers as a group have improved their delivery substantially since 2004, pricing power with consumers has dropped 68% from 8.1% to 2.6%. Most improvement has focused on either cost-cutting or opening more stores. Yet, shoppers increasingly want retailers to better connect with them in new and exciting ways.

Several retailers are developing competitive advantages to hold customers captive and enable consistent revenue growth. Economies of skill, which are the benefits achieved from core competencies in a retailer's supply chain, is where most leading retailers today are building moats around customers and generating a disproportionate share of profits over their competitors. Petsmart, ranked as one of the top ten most desired retailers by consumers, has achieved the highest moat rating for economies of skill with its integrated stores and web site offering services and solutions to pet owners.

"Developing competitive advantage in the retail industry is one of the more difficult challenges," said Gary A. Williams, executive director of the Kanbay Research Institute. "Retailers must create barriers of entry for competitors by innovating their strategies, operations, technologies and business models. "

Among the key findings in the report, consumers want to take advantage of technology and integrated shopping methods by interchangeably using physical stores, web sites and catalogs to make purchases.

"With so many choices today it's critical for retailers to become truly demand-driven," said John White, executive director of Kanbay's Consumer & Industrial Products practice. "This requires retailers to not only continually understand the emerging needs of consumers, but also how to focus internal resources and systems to meet those needs in the most efficient way. Some retailers, such as Barnes & Noble, Coach, Estee Lauder and Kohl's, have been focused on these initiatives for quite some time already."

The 2006 edition of Retail Demand Today provides a complete list of consumer ratings for 104 retailers overall and by category. To download a complimentary copy, go to http://www.kanbayresearch.com/reports/retail.htm or contact us at info@kanbayresearch.com.

Other reports published this year identify innovators from other industries. The 2006 edition of Travel Demand Today highlights Jet Blue (NASDAQ:JBLU) as the leading airline company and Harrah's Entertainment (NYSE:HET) winning for casinos. This report can be found at http://www.kanbayresearch.com/reports/travel.htm and provides a complete list of consumer ratings for the travel industry.

About the Kanbay Research Institute

The Kanbay Research Institute (KRI) is an operating unit of Adjoined Consulting LLC, a subsidiary of Kanbay International, Inc. Originally founded in 1998 and formerly the independent research division of Adjoined Consulting, Inc., the KRI conducts primary research on an original set of leading indicators that measure consumer demand across functional, emotional and economic factors. Through a patented research system, comprehensive market models are built based on consumer desires that measure how well leading companies are meeting those desires. The KRI researches and analyzes over 300 market leading companies on a continual basis, with over 14 million data points since 2001 in a standardized fashion. The research provides strategic, technological and operational insights about how today's best performing companies tap into unmet customer demand to build long-term, economic advantages over the competition.

For more information, contact 800-840-5148 (U.S. only) or at 703-788-6751 worldwide, or visit www.kanbayresearch.com.

About Kanbay International, Inc.

Founded in 1989, Kanbay International, Inc. (NASDAQ:KBAY) is a global IT services firm with more than 6,200 associates worldwide. Kanbay provides a highly integrated suite of management consulting, technology integration and development, and outsourcing solutions through a proven global delivery platform to clients focused on Financial Services and Consumer & Industrial Products, as well as an emerging presence in the Communications & Media and Life Sciences industries. Kanbay is a CMM Level 5 assessed company headquartered in greater Chicago with offices in North America and India as well as London, Singapore, Hong Kong, Tokyo and Melbourne. Further information about Kanbay can be found at http://www.kanbay.com.

Source: Kanbay International, Inc.

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