Are online retailers winning the battle for customers’ hearts and minds?

Women with shopping bags

 

The run up to Christmas is always an ‘interesting time’ for retailers who need to gauge customer demand and deal with unpredictable factors like the Great British Weather. With recent reports highlighting the success of online retailers in particular with their Black Friday deals, how is the high street likely to develop in the future, and what is getting in the way of progress?

These are some of the interesting questions posed by a new report from Peru Consulting, entitled “Delivering the retail technology experience”. IT directors polled for the study warn that rising costs, competitive threats, disruptive business models and changing customer behaviours are not just piling on commercial pressure, but are also creating demands for investment from different parts of the business.

So while the majority of retail IT directors recognise that they need to provide free customer Wi-Fi connectivity in their stores to enable new services such as dynamic pricing, a third (33%) of larger retailers with 500 stores or more say that they are unable to provide it because of technology constraints, while a further third say that the perceived cost of upgrading their platform is too high.

New technologies such as superfast broadband networks will enable retailers to provide a better experience for customers as well as a deeper understanding of buying preferences and behaviour, yet investment in this technology is not currently perceived to be top of the list when it comes to allocating budgets.

David Upton, Director at Peru Consulting and author of the report, said: “The evolutionary fusion of high street stores and internet based shopping and distribution continues to transform how we all shop and buy, but there are fault lines emerging in the technology strategies that retailers have in place that will prevent them from taking full advantage of those changes.

“A key finding from the report is that retail IT directors and the business are on the same side and should be collaborating more effectively on how to create the best possible experience for customers, including improving the retail technology experience.

“IT is no longer a silo that sits outside the retail experience, but should be considered integral to the high street retail channel development rather than just a back office function or a separate route to market.  The good news is that there are proven ways for retailers to surmount both real and perceived barriers to progress, including cost and inflexible contracts.”

The evolutionary fusion described by David Upton may explain why a fifth (21%) of IT director surveyed believe that retail stores will be mainly delivery and distribution hubs and a quarter (25%) think retailers will offer convenience above all else and have smaller but more plentiful outlets.

However, the technocrat’s dream of robots and driverless cars doing our shopping for us may be appealing to some, but Peru’s research found that only 6% of IT directors believe it will become a reality by 2025.  Still some time to go, then, before the high street is completely subsumed by online shopping.

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