Retail shifts may increase technology procurement needs

E-commerce is now the shopping channel of choice for a greater number of consumers than ever before. Companies are enjoying record-high revenues through digital platforms, and the ubiquitousness of smartphones means that purchases can be made instantaneously from nearly any location. The retail sector and the consumer product market are rethinking their strategies in light of this trend, which has led to an increased operational emphasis on technology, accompanied by a shift in procurement needs.

Will the storefront of the future be fully digital?

A growing number of retail outlets are considering reshaping their brick-and-mortar shopping channels and allowing commerce to take place entirely online. A study by the National Retail Federation, in conjunction with Demandware and the University of Arizona, found that in the United States and Europe, nearly 36 percent of chief information officers at companies in this sector are thinking about moving all transactions to a single, unified platform

That doesn't mean retailers are thinking of abandoning their physical operations altogether. Rather, a single-platform approach would mean bringing e-commerce technology into the brick-and-mortar storefront, the NRF noted. Tom Litchford, the organization's vice president of retail technologies pointed out that consolidating purchase data within a single channel would "enhance the endless opportunities that new technologies offer" and "allow retailers to provide seamless, relevant and personalized interactions for all of their customers."

Clearly, the benefits of such a strategy are considerable, and unifying transactions stands to boost enterprise agility considerably.

"It's no surprise that retailers are increasingly looking to leverage e-commerce technology as the single platform for all commerce," remarked Rob Garf, vice president of industry strategy and insights for Demandware, according to the release from the NRF. "This provides retailers a great opportunity to reduce costs, improve operational efficiencies and enhance the overall customer shopping experience in a dynamic consumer environment."

Retail IT teams need more tech resources

But in order reap the advantages that Garf outlined, investments in software, hardware and other technological tools will be necessary. The NRF found that 80 percent of retail CIOs plan to increase spending on in-store technology over the next three years.

As such, companies that are planning to unify commerce need to develop well-planned IT procurement strategies. Even if the firm plans to leverage the benefits in cost reduction and minimized physical infrastructure that cloud computing offers, a fully remote data storage system may not be viable. Especially for large-scale operations with vast amounts of sensitive, personally identifiable customer data, it may be necessary to keep some resources on-site - and this will require additional hardware.

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  1. This is an intriguing article that quotes some interesting numbers from a survey of retail executives. The interpretation of those numbers are thought provoking but can certainly be debated.

    "Nearly four in 10 (38%) surveyed plan to leverage an e-commerce software platform for their next generation store software" Doesn't that also mean that nearly 6 in 10 do not plan to do this?

    Also, what does it mean to "leverage" an e-commerce platform for store software"? Based upon the background of both the reader and the survey participant this could mean different things.

    Does it mean these retailers plan to replace POS systems with e-commerce's faceted visual searches and shopping carts? If so, expect checkout queues to lengthen and UX experts to scratch their heads.

    Does it mean CIOs want POS systems to have the flexibility of e-commerce systems and the quick turn-around time for making enhancements? Maybe.

    Does it mean that e-commerce companies are marketing their way into the stores and CIOs are buying it? Maybe. But do e-commerce companies know the brick-and-mortar "space"?

    Does it mean that CIOs are hearing from their system architects that after a decade of integration hassles between systems from different vendors that they can't keep up with the multi-channel enhancement requests?

    Does it mean that it's just logical to look for a single package that can support multiple-channels and about 38% have POS at the end of it's life-cycle? And as one of the oldest POS vendors puts it: "While point-of-sale (POS) systems are critical to retailers' success, many cannot efficiently handle the scale and complexity of multiple channels."

    Great survey article. It would be good if it were followed up with more details and possibly some comments from survey participants.