Guess Who’s Planning to Increase IT Spending?
Innovations in IT continue to transform the retail sector, with digital signage, payment processing, customer engagement and other solutions playing increasingly important functions, according to new research by CompTIA, the nonprofit association for the IT industry,
Seventy-two percent of retailers surveyed rate technology as important to their business, according to the study, titled “Retail Sector Technology Adoption Trends Study.” That figure is projected to increase to 83 percent by 2014.
But the study also indicates that large numbers of retailers have not yet succeeded in using technology as well as they could or should. Just 7 percent of retailers report being exactly where they want to be in using technology, while 29 percent rate themselves as being very close.
“Reaching an optimal state of technology utilization is a high bar for almost any business to reach,” said Tim Herbert, vice president, research, CompTIA. “But the vast majority of retailers clearly want to improve their technology utilization. For some this will involve adoption of new technologies; for others, improving the use of what they have in place.”
A net 63 percent of retailers expect to increase IT spending in 2012, with the remaining 37 percent planning to cut back or hold the line. Large retailers expect to boost IT spending the most — 4.8 percent, on average. For all firms, the planned average increase is 4.2 percent.
New developments in digital signage, social engagement, mobility, payment processing and other areas haven given retailers new tools and capabilities and, in some cases, challenges.
One in three retailers currently use digital signage, with an additional 20 percent intending to do so soon, according to the CompTIA survey. Sales and promotional announcements and other direct engagement with customers are the most popular uses, cited by 71 percent of respondents.
Among all emerging technologies, adoption intent ranks highest for geo-location services. About one in five retailers now use geo-location technologies and other location-based solutions to reach customers. One reason for the strong interest may be as a defensive threat against “showrooming,” the practice where consumers visit a physical retail shop to assess a product but make the purchase from an online retailer to get the lowest possible price.
“Location-based technologies can give retailers the tools to incentivize in-store purchases, such as special discounts for in-store customers who check in via an app,” Herbert said.
Retailers also are experimenting with technologies that improve upon point of sale systems or leapfrog those systems entirely and leverage new platforms for payment processing. In the CompTIA study, 13 percent of retailers say they are using a mobile payment system. Another 19 percent plan to deploy the technology over the next 12 months.
But adoption of these emerging solutions — and others — must be accompanied by a broad-based technology strategy that addresses foundational needs as well.
“Reliable wireless connectivity, robust security, quality end-points, data backup and other IT basics cannot be overlooked by retailers anxious to add new capabilities,” Herbert said.
The study is based on an online survey of 500 U.S. retailers in primary retail categories, including apparel, home goods, health and beauty, sporting goods and related store types, and was conducted between March 27 and April 2, 2012.
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