Retailers still spending on some IT areas, BT Expedite says

BT Expedite survey by Martec shows falling spend but also bright spots

The retail sector has suffered but is still spending on certain IT projects

Despite recent cutbacks, retailers may still be spending up on IT around e-commerce, m-commerce, multi-channel and PCI compliance.

An IT in retail survey sponsored by BT Expedite has reported an expected decline in IT investment but noted that several areas bucked the trend.

Richard Lowe, chief executive at BT Expedite, said the bright spots for retail investment exist in e-commerce, multi-channel and PCI compliance.

“We’re also seeing retailers looking to sweat their existing assets as far as possible and this is sparking plenty of demand for small IT projects with quick payback,” Lowe said.

“Where bottom-line improvement can be demonstrated, retailers are more than willing to embrace new technology.”

The survey, carried out by Martec International, highlighted a shift to multi-channel retailing, mobile internet access and m-commerce in general as areas of investment for the retail sector.

Mobile technology has enjoyed steady retail adoption for five years. Today, 57 per cent use or plan to use mobile technology to increase productivity, according to the survey. That is up from 30 per cent in 2005.

It is mainly used for stock management, price checking and delivery scanning. Across the supply chain, mobile technology has been deployed by 62 per cent of players.

Non-store sales are expected to increase next year, although investment in in-house store systems has fallen five percentage points since last year. E-commerce and web sites appeared the second most important areas for retailers investing in IT.

In-house store IT is still the highest priority for IT investment for 19 per cent of retailers and with about 25 per cent of retailers planning to replace their systems, according to the survey.

“Non-store sales [have] not been adversely affected by the recession, now accounting for 4.8 per cent of sales, up from 4.4 per cent. The majority of retailers now also have a transactional web site, and this has increased from 68 to 74 per cent,” a BT Expedite statement on the survey said.

However, the poll also showed more retailers than in seven years had dropped off the list due to liquidation, including MFI, Woolworths and Zavvi.

Retailer IT budgets were slashed by 20 per cent in the past year, to 1.1 per cent as a percentage of sales. Outsourcing is also falling out of favour, where previously it was increasing.

Brian Hume, managing director at Martec, said many retailers have indeed cut their IT budgets, with 15 per cent making cuts of up to 50 per cent.

“There’s also a clear trend to bring things back in-house to minimise redundancies,” said Hume.