CSA Exclusive: How retailers will make tech investments in 2024
A new survey released exclusively to Chain Store Age reveals the solutions retailers will dedicate funds to in the coming year.
Most (58%) retailers plan to increase investment in IT over the next 12 months, according to a survey of retail professionals about their plans for — and views on — technology investments in 2024 by multicloud technology services company Rackspace Technology.
AI is a major retail investment priority
Close to two-thirds (63%) of respondents said pervasive artificial intelligence (AI) would have the highest positive impact on the business/market environment, while 50% named AI as the most important technology. Top benefits repsondents have already received from AI include enhanced products (55%), improved security (47%) and new product creation (45%), with improved security (55%) as the top expected benefit it will bring near future.
AI initiatives gaining the most traction among respondents are computer vision (54%), custom engagement (47%), predictive maintenance (47%) and natural language processing (38%).
The biggest challenges to implementing AI into the retail business cited by respondents are measuring business value (47%), lack of support infrastructure technology (40%), and a shortage of AI talent (33%).
[Read more: Survey: Companies have mixed feelings about generative AI]
Retailers will shift more workloads to the cloud
The survey also shows that respondents will allocate more technology spending to edge computing, private cloud, hybrid cloud and public cloud in the coming 12 months. Respondents credited public cloud with reduced IT spending (60%), increasing process efficiency (49%) and faster testing for new products (46%).
Meanwhile, respondents said private cloud enhances a personalized customer journey (55%), creates new revenue streams (51%), and improves the ease of use for customers (45%).
The survey also identified three benefits to adopting a hybrid model respondents said have impact throughout their organizations: Improved security (54%), data control (46%) and reduced costs (45%). More than half (53%) of retail respondents said data integration is the biggest challenge in adopting a hybrid cloud model.
Other challenges include compliance with data sovereignty/privacy (39%), ensuring consistent security compliance (38%) and skills shortage (38%).
Talent is scarce
The survey also revealed general respondent concerns about a lack of available technology talent. Two in three (66%) respondents are struggling to recruit and hire the kind of talent needed to handle increased cloud and AI technology.
The key roles respondents are struggling to fill are 5G specialists (55%), data analysts (46%), cybersecurity experts (42%) and data scientists (38%).
As the need for technology increases, retail labor costs are increasing 55% to cover salaries, wages, bonuses, benefits, training and recruitment costs. The main reasons respondents gave for the increase are advancements in technology (44%), remote work (44%) and cloud adoption (41%).
Figures are from a larger survey of 1,420 IT professionals across industries including retail sponsored by Rackspace Technology with Dell/VMware in October 2023.