The retail sector’s tech spend is expected to increase by more than $200 billion in just two years, according to leading advisory firm Gartner.
The global sector’s tech spend will grow by 3.6 per cent in the next few years in response to a growing consumer demand for digitally-savvy retailers, according to the latest forecast from Gartner.
While the retail sector has traditionally lagged behind other sectors on IT spend, the industry now surpasses other areas for IT investment.
In Australia, retailers are forecast to spend almost $5 billion on technology products and services in 2019.
Software is the fastest-growing category of technology spending for retailers as CIOs look to invest in analytics, digital marketing, e-commerce, mobile and AI, according to the report.
But internal services, IT services, telecom services, devices and data centre systems are also set to be popular, with internal services expected to be at $33.3 billion US and IT services at 81.6 billion US.
Molly Beams, senior director, analyst at Gartner said that increasingly retail CIOs are being tasked with analysing business performance – prompting more investment in technology to drive business success.
“Retail CIOs are investing in analytics for both near-term benefits like decision making and to prepare for innovations such as smart machines, AI and augmented reality — all of which will require robust datasets.”
At the 2018 Gartner Symposium Thomas O’Connor, senior director and analyst at Gartner said that the physical retail landscape is in fact thriving, despite popular belief to the contrary.
“There are many ways for retailers to differentiate from e-commerce giants, and therefore profitably coexist,” said Mr. O’Connor. “We think that yes, there will be a robust retail industry. But the rules of the game are changing rapidly. Different kinds of retail businesses will continue to arrive and challenge the status quo.”
Technology is crucial to drive this future success, Mr O’Connor said, with tools such as advanced analytics and AI invaluable to understand customer behaviour and establishing key indicators of success crucial. But technology should be rolled out selectively, and only scaled once there is a clear consumer need for it.