NRF: Retailers discuss tech investments

NEW YORK A report by the National Retail Federation’s CIO Council revealed that retail investment in store hardware increased by 18% in 2007 versus 2006, but investment in telecommunications decreased by 31%.

In a seminar developed to discuss the results, participants noted that retailers have been able to reduce long distance costs particularly after making significant investments in equipment a few years ago and by staying on top of telecommunications pricing trends. On the other hand, many retailers have been upgrading store-level technology. Panelist William McCorey, senior vp and cio of Circuit City pointed to his companies roll out of tablet PCs as one instance of hardware investment. But it is an investment for the long run. Now used primarily as a sales vehicle, the tablet PC, in the hands of Circuit City sales associates and Fire Dog service technicians will eventually become a point of sales device, leveraging the investment in the technology.

Circuit City isn’t alone in looking to get more out of its tech investments, Ken Brame, just-retired cio of AutoZone, noted that the retailer is beginning to use its parts ordering system, one developed for use by sales associates, as a self-serve kiosk. New hardware allows the device to be positioned for use by consumers when not in use by a sales associate, and at least one station is usually idle at any point in the day Brame noted. Using it, customers can look up parts, fill out warrantees and otherwise turn what would be a service occasion into a faster, less costly self-service transaction. While leveraging investment was one major theme of the panel discussion, another was the shift to prepackaged software solutions. Michael Jones, senior vp and cio of Michael’s Stores, noted that the retailer now is purchasing more packaged solutions than creating its own.

All three panelists agreed that the market is evolving in the direction of pre-packaged solutions and as it does, the issue of controlling software maintenance costs will become a bigger issue and one that retailers must push vendors to help them control.