BLOG: RETAIL INSIGHT

Mobility Drives Retail IT Investments to $43.9B

By Joe Skorupa
 
Mobility is the high-tech tail that wags the dog for retailers. So many projects cluster around mobility in the tech stack that it has become the dominant driver of IT investment today. According to a just released report by TBR, mobility is pushing a 5% increase in IT budgets in 2013 for large North American retailers and, not surprisingly, mobile POS is where the big money is going.
 
It used to be that POS was the driver of IT investment in retail. Then, after the turn of the century, it was e-commerce followed by omnichannel retailing.
 
Now mobility has emerged as the hub of investment with spokes extending to POS, loyalty programs, inventory management, e-commerce, productivity applications, security, reporting, IT infrastructure and more.
 
These conclusions are drawn by a recently released report by TBR (Technology Business Research), a multi-industry business and technology research firm based in Hampton, NH.
 
“Mobile is driving IT today,” says Stuart Williams, director of TBR’s software and cloud practice. “It is driving investments in solutions, infrastructure, hardware and services. Mobile POS is where a great deal of the money is going and many other elements of the IT budget are tied to it.”

The TBR report, titled “Retail SourceIT Report,” is the first in a planned annual research program. It is also the first in a series of similar research reports covering other industries.  
 
The report integrates surveys and in-depth interviews with IT and business executives at 247 large North American retailers to map out the future of IT spending across software, infrastructure and professional services in 2013. Respondents reported budget plans, decision drivers and vendor relationships across the enterprise software landscape.
 
Here are some key findings:
 
  • Large North American retailer IT budgets will increase 5% ($2.1 billion) to $43.9 billion in 2013. Of this, $30.7 billion is the component devoted to software, professional IT services and hardware. The rest falls into the salaries and overhead component.
  • External forces driving the investment are: increased consumer confidence, e-commerce growth, smartphone penetration and tablet use.
  • Internal forces that need to be addressed are: struggling profit recovery, inefficient systems to manage end-to-end value chain, aging packaged or in-house software, increased competition, and a sense of needing to capitalize on renewed opportunities.
  • Retailer responses to these forces are: expanding business capability via IT investment, focus on e-commerce and mobile projects, identify emerging consumer behaviors and trends via analytics, and optimize IT systems to enable efficient inventory and logistics.
  • Largest IT budget items are: 24% infrastructure ($7.4 billion), 14% professional services ($4.3 billion), 13% business applications ($3.9 billion), 11% software technology ($3.5 billion) and 11% systems management ($3.5 billion).
  • The following are the average project budgets driven by line-of-business departments in four key areas. Note that all tie into mobility and POS in one or more ways: retail POS $380,000, e-commerce/mobile commerce $790,000, inventory management $1.8 million, and BI and analytics $2.2 million.
  • The following are the average project budgets driven by IT in four key areas: HR and WFM plus supplier relationship management $2.6 million, transportation managemcent $2.8 million, data mining $4.3 million, and ERP $4.9.
To contact TBR for more details about the report click here.

POST A COMMENT

comments powered by Disqus

RATE THIS CONTENT (5 Being the Best)

12345
Current rating: 0 (0 ratings)

MOST READ STORIES

topicsMore >

RIS EVENTS

2014 Retail Executive Summit
2014 Retail and Consumer Goods Analytics Summit