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IDC report ‘Business Strategy: Technology and Retail Trends Shaping Australian Retailing – Australian Retail ICT Market 2011-2016, show local retailers are still spending heavily on day to day ICT; payment solutions, logistics, Internet connectivity and mobility for employees – including tablets. But this is about to change.
There will be a ‘shift’ from telecoms to software and services investment, the report notes, as retailers look to get the seamless ‘omni channel’ approach right.
“While there are pockets of innovation within the retail sector – which are growing – we are really still seeing the focus of ICT spending being in support of the delivery of day to day operations,” says Emilie Ditton, Head of AP Vertical Markets for IDC Australia.
“A number of large transformational projects have taken place as established players move to create integrated omni-channel capabilities.”
Big names like David Jones, Myer and Harvey Norman, all have jumped to assure investors of their focus on multi-channelling, as sales, profits go soft.
“Its about having an integrated strategy across instore, online and mobile” Ditton told CN.
This investment will be focused around the mobile channel but will incorporate newer technologies – analytics, mobile, cloud and social business, the report predicts.
In particular, there has been new ICT led innovation in analytics capabilities to drive product, pricing and promotional decisions.
“These areas of innovation and investment will continue to grow as Australian retailers seek to differentiate themselves from the competition”. The Good Guys have just announced the adoption of WebCollage system, which is also used by Best Buy in the US.
Social networks including Facebook are also another “significant channel”, says Ditton, and now a core part of retailer-customer engagement to gauge consumer likes and requirements.
Social networks are also a “channel for transactions”, although by how much this may increase in the future is uncertain.
“Until 12-18 months ago, selling online was a defensive play’ by major retailers,” but now recognise the Internet’s integral role in pursuing a successful retail strategy, Ditton told CN.
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While telecommunications will account for nearly half of ICT spend in 2013 ($832.3m), this marks a fall of -2.6% from 2011.
By 2016, ICT spending by retailers is predicted to rise just 1.2% to A$2,022.5 m in 2016. Total spend this year will hit A$1,945.1 m, the report suggests.
Retailers need to invest in the right technology, warns Kumar Gs Das, research manager IDC Retail Insights. “In the age of omni-channel retailing, retailers need to understand and adopt technology with futuristic needs. “
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