Survey shows increased IT spending; CRM ranked most important application

Atlanta Retail IT budgets appear to be recovering after the initial downturn at the start of last year’s recession, with averages for all retailers at 1.3% of sales compared with 1% last year, according to the second annual Global Retail CIO Survey from Aldata Solution and IBM.

The survey, conducted by Martec International, showed that 26% of respondents expect their IT budget to increase, the same figure as last year; however, while last year’s survey showed that increase to relate to projects already under way, this year’s interviews revealed more aggressive plans to implement new systems.

According to the survey, more than 50% of retailers will be upgrading, replacing or implementing new systems in areas such as automated replenishment (52%), assortment optimization (58%), promotions optimization (56%), promotions management (54%), with a further 46% looking to invest in demand forecasting. Master data management has the highest planned implementation of all applications studied in the survey, both across the enterprise (35%) and for supplier management (28%).

“The truth is, though, that while the downturn hasn’t halted retailers’ IT spend, it has certainly changed the way that money is spent,” said Allan Davies, chief marketing officer, Aldata Solution. “Gone are the days of end-to-end, rip-and-replace projects, and instead we’re seeing a big focus on process optimization. Retail CIOs are not afraid of investing in new projects, but they need to see a quick return on investment. And by quick, I’m talking about months, not years.”

Systems to attract and keep customers featured prominently in this year’s survey. Multichannel customer relationship management was ranked as the most important application by respondents, with 42% having yet to implement multichannel CRM, but with plans to do so within the next three years. Similarly 38% of CIOs surveyed plan to implement loyalty systems -- with customer data linked to buying patterns and behavior -- within the next three years. And finally, systems that support the safety of customers were considered the most important application by 47% of respondents.

The survey, which queried 109 retail chief information officers and IT directors in both the Americas and Europe, can be downloaded at aldata-solution.com.