Retailers revamp ageing tech to cash in on multichannels

Upgrading store systems and ecommerce get top billing
Written by Tim Ferguson, Contributor on

Upgrading store systems and ecommerce get top billing

UK retailers are once again planning to invest in technology after holding back during the worst of the recession.

Many retailers are now planning to replace ageing infrastructure that is deemed no longer fit for purpose, with store management systems a particular target for investment, according to new research.

Just under a quarter (23 per cent) of retailers are planning to replace store management systems, according to research by retail consultancy Martec for BT Expedite, which covered 100 UK retailers.

Brian Hume, managing director of Martec attributed the focus on store systems to the fact that much of the tech currently in place is failing to keep up with the requirements of increasingly multichannel operations.

Other technologies that retailers are planning to replace are logistics (17 per cent), merchandise management (17 per cent) and ecommerce (12 per cent).

Average spending on IT as a percentage of sales is predicted to be 1.1 per cent this year: the same as 2009 but lower than the 1.3 per cent seen in the four years prior to that.

An increasing proportion of retail sales are taking place away from shops, a trend that's likely to continue

Retailers are starting to invest in technology again
(Photo credit: Shutterstock)

To see spending increase, Hume said CIOs and IT directors in the retail sector will need to improve the way they construct business cases to secure investment for projects.

Grocery retailers will spend the least on IT as a proportion of sales in 2010, although spending still shows an increase on historic levels. Such growth is due to large grocery retailers moving into new areas such as clothing which require more sophisticated (and expensive) retail systems.

The research also found that store systems are rated the top IT investment priority for 2010-11 (22 per cent) while an increasing proportion of businesses - 17 per cent - said they see ecommerce as most important. For non-food retailers, ecommerce is actually the top investment priority with nearly a quarter (24 per cent) giving it top billing.

Ecommerce is becoming an increasingly important sales channel with non-store sales hitting 6.3 per cent of all sales this year compared to 4.8 per cent in 2009. Some clothing retailers are even seeing non-store sales of more than 10 per cent.

The vast majority of retailers (88 per cent) expect non-store sales to increase again in 2011.

However not all retailers surveyed currently have ecommerce capability: only 69 per cent of retailers have transactional websites with five per cent planning to implement them.

According to Martec, around five per cent of retailers have mobile sales technology in place, up from two per cent in 2009. In addition, a number of retailers who haven't got mobile sales tech in place are still using mobile technology, such as text alerts for ordered items.

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