Retailers must take fresh look at tech spending, REPL Group
50% of UK retail CIOs and CTOs are focusing their technology investments on backend IT infrastructure as they look to futureproof their organisations in a challenging climate, according to research by REPL Group. Data security (37%) and digital operations, such as apps and websites (24%), were also revealed to be main priorities.
The survey, conducted by Censuswide and involving 50 retailers, found that these investments are being driven by a number of factors but most commonly cost-savings (35%), answering customer demand (32%) and getting ahead of the competition (32%). Only 8% of CIOs and CTOs were invested in workforce management, which, according to REPL Group, highlights a concern that they may be neglecting the shopfloor and customer experience.
Most retailers are found to plan these investments up to two years ahead (40%). Among the barriers to implementing new technologies, they cite the complexity of integrating new technology with existing systems (33%) and a lack of any additional budget (33%).
Yet while 92% of CIOs and CTOs have increased investments in tech over the past five years, falling profits mean that 31% say they will be unable to do so moving forwards. Conversely, 29% revealed that the decline in the retail sector has inspired them to increase their spend in this area.
“Bricks and mortar retailers should indeed be planning their spend, but not exactly what it’s for. They must instead think about spend in two ways: for infrastructure systems, which requires long-term planning, and agile small spends to react to the changing market,” says Mike Callender, Executive Chairman at REPL Group.
“For this, it’s time high street retailers took inspiration from online retailers by doing pilots and A/B testing and being more agile in terms of delivery. It’s important that they focus on ring-fencing their core systems and allow for agile projects to integrate to them. Additionally, instead of trying to keep all costs in-house, retailers should also look at what can be outsourced to free up their technical teams so they can make a real, value-added difference to the business and to customers.”