A third of retail CIOs foresee tech investment cuts
Written by Hannah McGrath
Nearly a third of the UK’s senior retail IT decision-makers think they will be unable to invest in new technologies in the coming years due to budget restrictions and legacy IT systems.
A Censuswide survey of 50 retail chief information officers (CIOs) and chief technology officers (CTOs) for supply chain technology firm REPL found that 92 per cent had seen a marked increase in tech investment over the past five years.
However, a third found that outdated systems were proving a barrier to implementation, while a further third said a lack of budget was slowing technological progress in their organisation.
Half of respondents said they are currently focusing their investments on backend IT infrastructure, with data security (37 per cent) and digital operations, such as apps and websites (24 per cent), also near the top of the priorities list.
The survey showed that although investments are driven by a number of factors, the most cited reasons for new tech were cost-savings (35 per cent), answering customer demand (32 per cent) and getting ahead of the competition (32 per cent).
Nearly a third (29 per cent) said that the decline in the retail sector, with lower footfall and the shift to online shopping, had inspired them to increase their investment in technology.
However, perhaps as a result of the switch to digital, only eight per cent of CIOs and CTOs were investing in workforce management, highlighting a concern that retailers may be neglecting the shop floor and customer experience.
Most retailers plan these investments up to two years ahead (40 per cent), which is likely to be too far in advance in order to stay competitive with fast moving competition.
Mike Callender, executive chairman at REPL Group, commented: “Bricks and mortar retailers should indeed be planning their spend - but not exactly what it’s for - they must instead think about spend in two ways: for infrastructure systems, which requires long-term planning, and agile small spends to react to the changing market.
“For this, it’s time High Street retailers took inspiration from online retailers by doing pilots and A/B testing and being more agile in terms of delivery; it’s important that they focus on ring-fencing their core systems and allow for agile projects to integrate to them.”