Below are excerpts from the Executive Summary for the Gartner/RIS News Tech Study . We’ll be releasing the study and presenting the data next month at the Retail Technology Conference 2009. Follow the runup to the conference on Twitter at #RTC
The year 2009 will long be remembered as a time of great challenge for retailing as a whole and the retail CIO in particular. No one wants to focus on doom and gloom on a steady basis, but as of this writing, there are few positive economic signs to point to on the horizon. The stock market continues to produce daily declines, the revaluation of housing has yet to stabilize, and the consumer continues to remain stingy on all but the most necessary of purchases and only buying items on deep discount.
So what’s in store for 2009? Will retailers slash their IT budgets in a desperate bid to improve their income statements? Slash, no, but they will definitely reassess, redirect, reallocate and remove costs as much as possible.
However, here’s why I don’t see overall IT budgets decreasing dramatically in 2009:
- Centricity is STILL the dominant strategy today in retailing. In all but the smallest retail formats this requires technology enablement to successfully carry out.
- Predominance of first-generation e–commerce platforms still exists across all tiers and subsectors, which requires significant upgrading or replacement.
Top 10 IT initiatives started in 2009
I’ve spent the last six months worrying what answer I would give to the question: What are retailers working on in 2009? “Nothing” was the most common answer I received from my blog and twitter efforts. While I understand it’s become fashionable to deliver negative news in this environment, fortunately the real answer to the question is much more positive.
The new initiatives can be summed up in two words: customers and data. A fair number of retailers are still wrestling with long-term POS and kiosk projects, which focus on improving customer service and satisfaction. And a larger block of retailers is wrestling with concerns surrounding data: How to find it, speed it up, and make it available to wider audiences within the organization.
So Where Do We Go from Here?
This year will be a time of phenomenal challenges to the retail community. We will see more retailers fall this year, like Circuit City and so many others. And as they pass from the scene their competitors will grow stronger.
We will see many retailers close unprofitable stores. Some will claim this is another sign on the pending retail apocalypse. While others, me included, believe this is a healthy development. It’s the pruning of the orchard in preparation for the next crop. Some of these stores should have been closed years ago. Better late then never.
We will most likely see housing valuations remain fluid and 401K’s still depressed. But those of us in the industry need to buckle down and persevere. And we will.
Finally, we need to begin preparations for a coming upturn. Despite all the doom and gloom a rebound will happen. And smart retailers will be ready when it does.
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