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TWO TYPES OF INVESTMENTS
Joel Alden, partner in the retail practice at A.T. Kearney, said that investments in technology and physical stores mainly fall into two distinct categories: maintenance investments or growth investments.
“For maintenance investments — replacing a degrading building infrastructure, for example — the cost of not making the investment is critically important,” Alden said. -
ASSESSING IT
It’s important to look beyond the traditional hard metrics of ROI to determine the bottom line value of an IT solution. Here are five key areas CFOs need to consider when evaluating technology:
1. Sales growth: There are many types of applications that can drive increased sales, but some of the most common are solutions that optimize pricing, including markdowns. Determining the ideal price for maximizing sales without cutting profits at a store level is too complex for merchants to do on their own.