IT budgetary plans indicate retailers are preparing to focus on the selling floor to provide store profitability, according to data from Retail Systems Research.
Advance data from a Retail Systems Research report on retail store technology usage and budgeting scheduled for a June 2010 release indicates that in the near term, retailers are allocating funds to purchase IT solutions which directly impact the customer experience on the store selling floor.
Store IT Budgets Include POS
For example, modern POS hardware and software is the most-budgeted store IT solution, with 18% of respondents having budgeted for this item. Considering that modern POS hardware and software is also the most currently used technology by respondents (61% total current usage), it is clear that having up-to-date POS technology is seen as crucial to store profitability by most retailers.
Personal scanners, self-service scales, product information kiosks, and employee product information training technology is the next-most-budgeted item, with 14% of respondents budgeting for at least one of these solutions. All place more information directly into the hands of either in-store customers or store associates without interference from management. Thirty-eight percent of respondents currently use one or more of these solutions.
In-store rewards and coupons are currently budgeted by a slightly lower percentage of respondents (12%) but have a higher percentage of total usage (46%), suggesting the overall popularity of the second- and third-most budgeted items is roughly equal. Only 6% of respondents have budgeted customer-facing touchpoints, but 52% currently use them.
Future Plans Focus on Mobile
Judging by store technology solutions retailers are planning to implement but have not yet budgeted, the store will someday reside inside customer and employee mobile phones. Twenty-two percent of respondents plan to implement technology for delivering information to customer-owned cell phones and PDAs, and 20% plan to implement technology for delivering information to store-owned cell phones and PDAs. Significantly more retailers currently deliver information to customer-owned mobile devices (30% total) than store-owned devices (16%).
Economy Not Top Challenge
Only 39% of respondents said the economy is a top-three challenge, compared to 48% who said the need to execute more consistently across the stores they operate and 46% who said the need to improve their customer experience while still holding the line on payroll costs. The low percentages of store IT implementation projects postponed due to economic conditions further bolsters the finding that the economy is not currently a top challenge facing most retailers.
Retail IT Spending to Exceed $20B
Investment in the 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, is rapidly growing, according to ABI Research. A recent ABI report indicates that retail IT spending totaled approximately $14.8 billion last year and will have undergone approximately 50% growth from its 2009 level by 2014, reaching almost $21 billion.
About the Data: Data is based on almost 80 retailer responses to a currently open survey.