As the retail world looks to stay competitive with the ever-growing footprint of online sellers like Amazon, many experts in the industry are urging brands to up their investments into critical technology, including mobile and IT transformation.
The good news is that brands appear willing to ante up. According to research from IHL Group, 30 percent of retail brands expect to make investments into mobile solutions for sales associates, empowering brick-and-mortar workers by giving them mobile tools to provide better customer service.
Meanwhile, 23 percent of retailers are making investments into IT transformation. Retailers also expressed interest in deepening their investments into the cloud.
These industry-wide trends represent where retailers are looking to improve in 2017. Digital investments are a top priority, but the brick-and-mortar store is not being conceded to online retail giants. As the advantages of a physical presence become more apparent, retailers seem determined to leverage this advantage by upgrading store experiences through digital transformation.
Allocating Larger Budgets
While retailers have demonstrated a willingness to spend more on digital transformation, a common message through NRF 2017 was that retailers still aren’t tackling change as quickly as is necessary.
When it comes to IT transformation, retailers have increased budgets by an average of 4.5 to 4.7 percent. But experts contend that the pace of this spending is far too slow to be competitive with Amazon and other brands in the years to come.
One expert at IHL suggested that IT investments should be increased by 87 to 237 percent percent, according to BizTech Magazine. That underscores a continuing problem with retail transformation: By the time the change actually occurs, brands have already dug themselves into a hole.
Likewise, cloud investments continue to grow, with budget allocations increasing from 26 percent last year to 34 percent this year. But if retailers don’t close the gap quickly, they will be faced with an ever-growing need to spend more to spearhead transformation, and they’ll have a short timeline to make that change happen before they find themselves on the chopping block.