Zeroing In on the Top Three Technology Spend Priorities
Security, supply chain visibility and energy monitoring are among retailers' main concerns.
NATIONAL REPORT — Retailers have identified their technology priorities for the immediate future.
More than two-thirds of U.S.-based IT decision-makers (68 percent) plan to increase retail technology spending in the next several years, with nearly three in 10 planning to increase spending by 10 percent, according to a new survey conducted by Coresight Research and commissioned by VMWare Inc.
When asked about their investment plans for close to 20 different technologies, more than 85 percent said they are currently deploying or plan to implement at least one in the near term, reported Chain Store Age, a sister publication of Convenience Store News.
The findings of the survey include:
Security/safety is the most significant pain point impacting net revenue. These areas include retail crime, including e-commerce returns fraud, shoplifting and cybersecurity breaches. More than half of respondents use RFID/smart tags for tracking, making it the most popular currently deployed technology. Digital video for loss prevention is another top safety and security technology.
Supply chain visibility and price optimization are seen as revenue boosters. Survey respondents report they continue to combat supply chain bottlenecks and high inventory levels due to inflation and global conflict. They view supply chain visibility/management and price optimization as the technology investment areas with the biggest impact on revenue and most often ranked them as No. 1.
High energy costs drive energy and inventory management spend. Nearly a quarter of survey respondents ranked operational efficiency, including energy and inventory monitoring/management, as their top priority. On average, the top-ranked pain point in this category was energy monitoring. Coresight analysis indicates that respondents seek to address energy costs not only to ease financial burdens, but also to achieve more long-term sustainability costs as they attempt to find alternative energy sources.
The second- and third-ranked operational efficiency pain points, automated inventory monitoring and store manager dashboards, indicate respondent needs for increased visibility into their online and brick-and-mortar operations, enabling them to cut costs and save time, according to Coresight.
"To meet an unprecedented need to provide customers with e-commerce capabilities, at the onset of the pandemic, retailers doubled down on their e-commerce infrastructure," said Deborah Weinswig, founder and CEO of Coresight Research. "As we move into a new multichannel norm, a combination of diverse challenges from inflation and increased costs, to shortages of skilled labor, are causing retailers to diversify their both online and offline tech investments, to remain profitable."
Coresight Research surveyed 200 U.S.-based IT decision-makers with at least 50 consumer retail locations, who spend at least $100,000 each year on IT solutions, in November 2022. The full study, "Retail Challenges Boost Edge Technology Investment," is available here.
"Tech-enabled solutions provide increased transparency, visibility and enhanced security to help retailers operate in more agile and sustainable ways, maintain a competitive advantage and drive sales in challenging and changing environments," said Ed Durbin, senior director of retail industry solutions at VMware. "In this environment, we're seeing retailers rethink solutions and shift investment priorities from next-generation technologies to solutions that focus on data and asset protection, online and in-store customer engagement and long-term sustainability."
Chain Store Age and Convenience Store News are properties of EnsembleIQ.