Retailers are allocating dollars to several critical technology areas.
A new survey reveals what technology solutions retailers plan to invest in, and why.
According to a new survey of more than 200 U.S.-based retail IT decision makers conducted by Coresight Research and commissioned by VMWare Inc., more than two-thirds (68%) of respondents plan to increase retail technology spending in the next several years, with close to 30% planning to increase spending by 10%.
When respondents were asked about investment plans for close to 20 different technologies, more than 85% reported they are currently deploying or plan to implement at least one in the near term.
Security/safety emerges as most significant pain point
Respondents indicated security and safety as the most significant potential pain point impacting net revenue. These areas include retail crime, such as e-commerce returns fraud, shoplifting, and cybersecurity breaches.
More than 50% of respondents currently use RFID/smart tags for tracking, making it the most popular currently deployed technology. Other top safety and security technologies indicated by the survey include digital video for loss prevention.
Supply chain visibility, price optimization seen as revenue boosters
Respondents generally continue to combat supply chain bottlenecks and high inventory levels due to inflation and global conflict. Supply chain visibility/management and price optimization are perceived to be the technology investment areas with the biggest impact on revenue and were most often ranked by respondents in the top spot (tied for top spot).
High energy costs drive energy and inventory management spend
About one in four (24%) respondents ranked operational efficiency, including energy and inventory monitoring/management, as their top priority. The top-ranked pain point in this category, on average, was energy monitoring. Coresight analysis indicates that respondents seek to address energy costs not only to ease financial burdens, but also to achieve more long-term sustainability costs as they attempt to find alternative energy sources.
According to Coresight, the second- and third-ranked operational efficiency pain points, automated inventory monitoring and store manager dashboards, reveal respondent needs for increased visibility into their online and brick-and-mortar operations, enabling them to cut costs and save time.
"To meet an unprecedented need to provide customers with e-commerce capabilities, at the onset of the pandemic, retailers doubled down on their e-commerce infrastructure," said Deborah Weinswig, CEO and founder of Coresight Research. "As we move into a new multichannel norm, a combination of diverse challenges from inflation and increased costs, to shortages of skilled labor, are causing retailers to diversify their both online and offline tech investments, to remain profitable."
"Tech-enabled solutions provide increased transparency, visibility and enhanced security to help retailers operate in more agile and sustainable ways, maintain a competitive advantage and drive sales in challenging and changing environments," said Ed Durbin, senior director of retail industry solutions at VMware. "In this environment, we're seeing retailers rethink solutions and shift investment priorities from next-generation technologies to solutions that focus on data and asset protection, online and in-store customer engagement and long-term sustainability."
In November 2022, Coresight Research surveyed 200 U.S.-based IT decision makers with at least 50 consumer retail locations, who spend at least $100,000 each year on IT solutions. Respondents did not include those in wholesale club, business services/office supplies, or auto parts industries. Download the study, "Retail Challenges Boost Edge Technology Investment."