Current economic conditions are not driving retailers to cut their technology budgets.
According to results of a survey of 1,420 IT executives, many of whom were retailers, released exclusively to Chain Store Age by Rackspace Technology, there has been a 59% increase in IT investment by retail respondents during 2022. Many retail respondents also intend to make further investment in IT strategies over the next 12-18 months in the cloud (75%), security (57%) and digital transformation (48%).
Part of the reason why so many retail respondents are upping their technology investments is that 55% report an increased confidence in the ROI from technology across the business. At the same time, 49% of retail respondents say their CEOs are driving technology investment decisions, while only 29% say their CIOs are primarily leading technology investments.
Although current economic challenges are not prompting retailers to reduce technology investment, they are encouraging many respondents to focus on the following technology areas:
Take actions toward greater efficiencies through the cloud (60%), with 66% of these respondents pursuing public cloud and 34% focusing on private cloud implementations, while 53% see cloud as a long-term strategy and 47% as a short-term strategy;
Invest in innovation (55%);
Deploy more relevant products/services (52%);
Re-evaluation of supply chain (40%); and,
Staffing poses issues
Close to half (46%) of retail respondents said their organization is downsizing employees, starting with HR (53%), sales and marketing (53%), business operations (50%), accounting/finance (28%), IT operations (29%), security (18%), innovation (17%), and R&D (17%).
Seven in 10 (71%) retail respondents said they are trying to find ways to enable technology to do jobs performed by people in IT operations (29%), business operations (25%), sales and marketing (19%) customer service (15%), and HR (11%).
Half of retail respondents said they are currently struggling to fill vacancies in technology jobs in cybersecurity (61%), machine learning (51%), data analytics (49%), network engineering (37%), data engineer (31%), and cloud architect (32%). Fifty-one percent said they are struggling to retain IT staff in specific areas like cybersecurity (67%), data analysts (49%), cloud computing (44%), and systems and networks (40%).
Many retailers polled are not only struggling to hire new technology employees, they are also struggling to retain current tech staffers. Popular reasons include employee-oriented job market (67%), macro-economics (48%), competitor incentives (40%), forced return to an office (34%), and cutbacks on promotions and pay raises (31%).
Efforts by retail respondents to retain IT staff include offering additional training opportunities (67%), an increase in the value of rewards (51%), salary increases (47%), work/life balance improvements (48%), increases in benefits (34%), and career growth (30%)
In addition to trying to retain IT staffers, 46% of retail respondents are looking to implement the technical skills of all retail employees, including non-technical positions. The same percentage say tech proficiency/knowledge is mandatory for all retail employees
The economy tops all challenges
In another interesting finding, retail respondents said the biggest overall challenges to their organizations are: Economic slowdown (49%), inflation (48%), energy (45), hybrid/remote staff productivity (32%), hiring talent (28%) and supply chain. Global issues such as geopolitics or the Russia/Ukraine war (19% each) were less prominent.
The survey was conducted for Rackspace Technology by Coleman Parkes Research in September 2022. Findings are based on the responses of 1,420 IT decision-makers across sectors in the Americas, Europe, Asia and the Middle East.