Despite the negative impact of the recession on retail sales, retailers continue to increase their IT investments, according to a new study from ABI Research.
“Next Generation Point of Sale Systems and Retail Technology” indicates that in investment in retail technology hardware market, consisting of integrated point of sale (POS) systems, payment terminals, POS barcode scanners, POS printers, and electronic article surveillance (EAS) systems, managed to continue growing during 2009. Retail IT spending totaled approximately $14.8 billion last year.
In addition, retail IT spending is expected to continue growing at a rapid pace during the next four years. By 2014, ABI predicts retail IT spending will have undergone approximately 50% growth from its 2009 level, reaching almost $21 billion.
Security, Customer Service Fuel IT Growth
The study finds that continuing growth in retail technology systems shipments and revenues will be driven by global demand for technologies needed to meet rapidly evolving security standards, as well as retailers’ demands for highly efficient and customer-friendly technology.
According to Larry Fisher, research director of ABI Research, “Retailers look to technology to enhance the customer experience, drive customer loyalty, reduce costs, and to become more efficient at managing inventory, space and human resources. It is also a way to stay competitive as peers look to achieve the same goals.”
Fisher also said that retail technology vendors fared well despite the recession, as retailers maintained their long-term technology investment plans. Desire by retailers in emerging countries to emulate successful IT implementations by retailers in developed nations should help drive strong global retail technology market growth in the next few years.
Recession Increases Retail Shrink Threats
The ongoing economic recession has caused many retailers to both experience higher levels of shrink and make combating shrink a higher priority, which should contribute to expected growth in EAS technology.
According to a recent study developed in partnership by Retail Systems Research and the Retail Industry Leaders Association (RILA), 44% of retailers said the economy caused shrink to rise in 2009, and another 37% said it stayed about the same. Only 20% said it fell. Not surprisingly, 68% of retailers said the priority of shrink increased between 2007 and 2009, and another 25% said it stayed about the same, with 7% saying shrink became a less critical priority.