BT Expedite: UK retailers prioritise mobile and e-commerce

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Lowe: shift to multi-channel retailing

Lowe: shift to multi-channel retailing

Leading UK retailers are prioritising their IT investment in e-commerce and mobile commerce, according to the latest IT in Retail research by Martec International and sponsored by BT Expedite.

The annual IT in Retail report researches 100 retailers with annual sales totalling more than £180bn, representing 50,000 stores and 71% of the total UK retail sector, which is valued at £254bn.

The main IT investment priority for leading retailers is e-commerce and m-commerce, growing from 17% last year to 23% this year, reveals the report. It tops investment in store systems, which has been the focus for the previous nine years.

According to BT Expedite, e-commerce represents the only growth in sales for many retailers, so it makes sense for them to invest in expanding their websites, adding m-commerce and improving multi-channel business.

In fact, 16% of the retailers already use m-commerce – up from 5% last year – with a further 12% planning to take it up, the research reveals. 

For some of the leading 100 retailers, IT investment is centred on setting up a transactional website for the first time – 24% of the top 100 do not have one, although 5% are planning to set one up, the study shows.

For others, e-commerce is an investment priority to improve the customer experience; add more products, ranges or brands; internationalise their website and improve multi-channel integration.    

Investment in new or replacement head office systems is also up, with 25% of retailers planning to replace merchandise management systems, an increase of 8% over last year. Fifteen per cent intend to replace their merchandise planning systems and 6% are implementing one for the first time.

BT Expedite claims it is well placed to take advantage of the expected growth in retailers’ e-commerce spending highlighted by the report. 

Brian Hume, managing director, Martec International, said: “Many retailers are struggling to keep pace with the rapidly changing requirements of multi-channel operations with legacy systems slowing them down.

“Replacing these systems is vital for gaining competitive advantage. Consumers expect a seamless experience across all channels and retailers need to offer a single stock pool that can be accessed from all customer touch points, such as smartphones to check stock availability, pricing and product information.”

The average IT spend by leading retailers, equivalent to 1.1% as a percentage of sales, has marginally reduced to 1.0% this year, shows the study. BT Expedite suggests the reason for the fall is e-commerce is being prioritised and for many retailers it is not categorised as IT spend.

The drop is also set against a background of flat sales performance and efforts to reduce IT costs by offshoring IT work outside the UK, for example, BT Expedite adds.

Many retailers seem to be postponing EPoS replacement plans due to the recession and e-commerce being a higher priority, says the report. For most, investment in store systems is because of an EPoS replacement project but others are adding mobile technology in-store or systems to improve the customer experience with mobile tills and enhanced functionality or kiosks.     

Richard Lowe, CEO, BT Expedite, said: “Retailers are generally holding IT spending constant again in 2011, but there’s a positive indication of an increase of retailers planning to upgrade key business systems to keep pace with the continuing shift to multi-channel retailing, as well as the growth of mobile internet access and m-commerce. If this happens IT spend next year is likely to increase, but is dependent on both local, and increasingly, international economic factors.”

For more information or to download a summary of the IT in Retail report, visit: www.btexpedite.com/martec2011