Retailers slip tech laggards tag, Gartner

Global retail sector technology spending will grow 3.6% to reach almost $203.6 billion in 2019, with similar growth rates for the next two years, according to Gartner.

Retail has traditionally been a laggard in terms of appetite for change, digital maturity and hence technology investment. However, it now surpasses most other industries with regard to IT spend, driven by customer expectations and intense competition. CIOs, meanwhile, are prioritising analytics, digital marketing, mobile applications, e-commerce platforms and AI.

“Retail CIOs used to be tasked with minimising risk and cost,” says Molly Beam, Senior Director, Analyst at Gartner. “Now they are held accountable for business results. They are prioritising ROI and other measurable business impacts. Retail CIOs are investing in analytics for both near-term benefits like decision making and to prepare for innovations such as smart machines, AI and augmented reality — all of which will require robust datasets.”

Thomas O’Connor, Senior Director, Analyst at Gartner, says that, contrary to what many people believe, physical retail is thriving. Global retail sales will increase 4.8% in 2018, more stores are opening than closing and consumer confidence remains high.

Gartner predicts that by 2023, Alibaba and Amazon will have captured 40% market share of global online retail, up from 33% in 2017. “There are many ways for retailers to differentiate from e-commerce giants, and therefore profitably coexist,” says O’Connor. “We think that yes, there will be a robust retail industry. But the rules of the game are changing rapidly. Different kinds of retail businesses will continue to arrive and challenge the status quo.”