Retailers Are Prioritizing Innovation In IT Spending
By Stephen Bergeron, V.P. of Sales & Marketing North America, apg
Retailers are increasing their IT budgets and allotting a bigger portion of those budgets to innovation. They are investing in cloud-based and automation solutions to replace aging technology to meet customer demand for omnichannel experiences and cope with a severe labor shortage.
Five years ago, according to IHL, retailers were spending less than 20% of their IT budgets on innovation. Currently, the innovation share of the budget is as high as 40% in some sectors, specifically general merchandise stores (GMS) and hospitality, a recent IHL report reveals.
Retailers with sales growth of more than 10%, defined as “winners” in the report, are spending more on IT than those with lower growth. The winners also are allocating more of that spend to innovations such as updated POS systems and automated cash handling, localized marketing and mobile devices for managers.
“Winning retailers are 67% more likely than below-average retailers to have fully optimized their Buy Online-Ship from Warehouse channels,” the report says. “They are 39% more likely to have optimized BOPIS/Click and Collect systems and processes, and 120% more likely to have optimized Buy Online for Local Delivery than below-average retailers.”
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