RAI and British Telecom surveyed 150 retailers to gauge how technology ready they were to cater to the new breed of smart, tech-savvy consumer. 

Consumers have become fast, collective opined, relatively impatient and spoilt with choices. Amid this fast evolving ecosystem, retailers are challenged to delight customer and mitigate their cost associated with market and operations. Many organized retailers are transforming their existing operations and introducing new formats to balance their objective of expansion and internal improvement that can provide sustainable growth across various customer touch-points over period of next few years. And they are using technology as a lever to manage change. 

Supply chain is the top priority in 2014
As many as 59% of respondents were planning to invest in supply chain. Investments are substantial – 64% of total IT budgets are earmarked for back-end support and supply chain management systems. 

The next area of investment was IT infrastructure (data center). While this was a priority for about half of the respondents, the amount of investment was much lower, around 6%. CRM solutions (5% of investment) and Data analytics (4% of investment) also featured as priority areas for about half the respondents. 

When capturing the extent of alignment between immediate technology objectives and business objectives, again, supply chain solutions are seen to have the most alignment. The interesting finding is about CRM solutions. While retailers are planning to invest only 5% of total IT budget into CRM – it's considered to be a high impact area.  Similarly, investment in inventory management is 3% of the total, but the impact (at 90%) is even higher than supply chain solutions.

In-store solutions take precedence over front-end solutions
Customer centricity is supposed to be the holy grail of all retailers. However, the 2014 reality is that of all the front-end solutions, mobile and e-commerce scored lower than POS and in-store solutions. While at a market level there is no disputing the fact that mobile penetration and e-commerce usage have increased in 2014, this has not yet translated into perceived impact and budget allocations by CTOs.  CTOs were split down the middle (47% apiece), in terms of ranking impact of mobile as high or medium. They were a bit more polarized when it came to ecommerce (60% high impact, 35% medium impact) but POS solutions came out as the main impact area (90% of respondents ranked it as high impact).

CTOs realistic about technology maturity
Retail CTOs are fairly realistic about their technological maturity. They admit that they do not score high on technological maturity when it comes to front-end solutions but  see greater maturity when it comes to the back-end solutions.

Retailers see advantage of cloud
Retailers do see the advantage of adopting the cloud. 55% of retailers believe that it will provide better management and reduce cost (50%).

Three DOs for the CTO

1. Beware of your own/your team's limitations
   
   
2. Beware of the competition
   
   
3. Track customer behavior
   

All three statements reveal the need for the CTO to be realistic and focused on an 'outside-in' approach- to take the lead in partnering with the CEO/ owner in terms of adopting technologies which have the most impact on the customer

They are willing to move CRM, analytics and infrastructure to the cloud first (in that order). 62% of retailers plan to use cloud-based CRM solutions. Analytics is a high impact area, where 43% of retailers plan to adopt the cloud.  Interestingly, 33% of retailers are also willing to move their SCM solutions to the cloud – this is, as previously stated, an area of high investment in 2014.

Excerpted from the RAI-BT report Retail 2.0 – Next Generation Retail released at ReTechCon 2014. Download the full report.

Article Source: STOrai Magazine