IHL Group: Early tech adopters outperform peers – here’s how
Retailers that take the lead in deploying next-gen technology solutions obtain some significant benefits.
Retail organizations that are early adopters of leading-edge technology solutions such as artificial intelligence, electronic shelf labels (ESLs), and geolocation technology achieve profitability gains 99% higher than their peers.
A new IHL Group research study called “How Retailer Leaders Outperform – What We Learned from 400+ Brands” also reveals that retailers classified as “leaders” with superior financial performance have increased their enterprise IT spending by 56% over the past five years, compared to just 13% for laggards.
IHL Group analysis indicates this 3.8x difference in IT investment velocity translates directly into measurable competitive advantages across profitability, sales growth, and operational efficiency.
The study identifies several critical technology adoption patterns that separate retailer leaders from laggards:
- Early adopters demonstrate superior financial performance across all measured metrics, with profitability advantages approaching 100% over peer retailers and sales growth exceeding competitors by more than 70%.
- Specific technologies show quantifiable ROI advantages, with electronic shelf labels, geo-location capabilities, and mobile devices for store associates ranking among the highest-impact investments retailers can make.
- Leaders are more likely to have deployed critical technologies including payment terminal upgrades (showing significant adoption advantages), self-checkout solutions, and modernized POS/mobile POS architectures.
- Leaders show significantly higher optimization rates across all customer journey types, including buy-online-pickup-from-store, ship-from-store, and local delivery.
- During the past five years, leaders have grown their store IT spending by 52% while laggards increased it 9%, a 5.8x difference.
Other findings include:
- AI investment is accelerating rapidly across the industry, with retailers allocating substantial portions of IT budgets to AI initiatives in demand forecasting accuracy, markdown optimization, and operational efficiency.
- The Windows 10 end-of-life deadline has exposed significant compliance and security gaps, with major percentages of retailers facing urgent migration requirements that IHL says create both risk and competitive repositioning opportunities.
[READ MORE: AI could cause $1.6 trillion impact by 2030 — these retailers lead]
"We're witnessing a fundamental bifurcation in retail where technology adoption is no longer just an advantage – it's become the primary determinant of who wins and who falls behind," said Greg Buzek, president of IHL Group. "Early adopters of electronic shelf labels are seeing 75% higher sales growth than those not using. Retailers deploying geo-location technology are achieving 104% greater profit growth. The performance gap isn't narrowing; it's accelerating. Retailers who think they can catch up later are deluding themselves – every quarter they wait, the gap widens further."
Research for the study was conducted via web-based survey in fall 2025, with responses from more than 400 brands and retailers across the food/drug/convenience/mass, general merchandise, and hospitality segments. Forty-six percent of respondents represent retailers with more than $1 billion in annual revenue, with 29% exceeding $5 billion.
