US companies ramp up spending on retail technology as they face a host of challenges

More than two-thirds of US retailers plan to increase their investment in technology over the next three years, with nearly three in ten set to up spending by at least 10%, according to a new report from Coresight Research.

This notes that retailers are facing a host of challenges, including intense competition, macroeconomic headwinds and shifting consumer preferences, and they also need to grow revenues, manage costs and improve efficiency.

They must, therefore, address crucial business components and identify solutions to drive growth and weather near- and long-term challenges.

In its report, which can be downloaded here, Coresight Research examines retailers’ rapid investment in in-store technology and the implications, leveraging findings from a survey of US-based IT decision makers conducted in November 2022.

It says that retailers can tap business gains through technology solutions, such as by leveraging cloud computing, which enables them to turn fixed costs into variable costs, access near-unlimited computing power and develop new functions more quickly and easily.

Yet the cloud on its own may not be enough; retailers also need to deploy computing power closer to physical stores, for example, on store premises, which is also known as on-the-edge computing, to enhance security and provide a quicker response for functions such as computer vision, which are sensitive to delays in the network (i.e., latency).

Top of the pops

US retailers ranked security and safety as the most significant element impacting net revenue.

They face a growing number of potential threats and challenges, including cybersecurity breaches, a particularly sensitive issue due to potential loss of sensitive customer data and the ensuing damage to the retailer’s reputation. In addition, organised retail crime, fraud at the checkout terminal and threats to associates’ safety are increasing concerns for retailers.

To protect against retail crime, retailers may shift their investment priorities: while next-generation technologies can provide bells and whistles, retailers are feeling more pressure since the pandemic to focus on data and asset protection.

Business insights ranked as the second most significant category overall.

Retailers continued to combat supply chain bottlenecks and high inventory levels in 2022 due to inflation and global conflict. Nearly half of all survey respondents ranked supply chain visibility/management as one of the top three components impacting net revenue in the business insights category.

“We believe that technology solutions are key to helping retail companies solve a multitude of current business challenges and drive business growth in both the short and long term. Advanced technologies can be integrated throughout the in-store shopping journey across multiple business areas,” Coresight Research says.