Global retail technology spending will near $203.6 billion in 2019, according to new research conducted by Tech., an Oct 2–3 event in London focused on prospering in the new retail age. The surge—an anticipated 3.6% leap from 2018—comes as owners of physical stores strive to add an advanced digital dimension to offline shopping, among other priorities. The need to engage customers in new ways, while managing stock, operations, and promotions more effectively and cost-efficiently, are also driving up international IT spending.
The extensive study, discussed in a new report, A World in Motion: Retail Digital Transformation Across the Globe, and the Technology Supporting it, also identifies country-specific trends:
- In the US, 75% of retailers cite growing urgency around digital transformation. Payment technologies are priorities, and 40% of retailers already use AI.
- In the UK, a third of retailers expect to invest six-figure sums—up to half a million pounds—on technology over the next 18 months. Visual search tools are high on the list to help shoppers find what they’re looking for more intuitively.
- In France, 90% of retailers say a new leadership mindset is needed to see through the scale of change required. Half are deploying robotics, and AI is high on the agenda.
- In Germany, retailers have a more keenly developed understanding of how technology affects their business, and 60% are investing in voice technology.
- In Russia, all retail leaders agreed digital transformation requires a new leadership mindset. Three out of four retailers surveyed admitted they do not currently have people with all of the right skills. 75% of leaders questioned currently use A1 while none are using visual search.
Need for innovation not limited to physical retail
The pressures facing retailers in all of these mature Western markets are well documented. The continued rise and growing sophistication of e-commerce is forcing all retailers to review their costs and the efficiency of their operations, and come up with new ways to add value for their consumer—for example, by appealing to them more directly and creatively in store and by combining digital and physical experiences in new ways. Online retailers need to keep innovating too, to stay competitive and to keep customers coming back and spending more.
In the UK, 45% of retailers claim to be using visual search, including the likes of Asos, Boohoo, M&S, eBay, and Argos, while visualization generally is proving important to sell higher-value items – for example, once customers can get a better feel for how furniture or a new kitchen would look in their own home. In the US, AI is enabling new levels of automation in Amazon Go stores, and in France (as in other markets), robots are transforming product picking in warehouses.
Carrefour calls on Google
One notable retail tech partnership: France’s largest player in the retail market, Carrefour, has sided with Google to drive innovation and build a tech-led strategy for serving the 21st century consumer. As well as supporting the development of the grocer’s e-commerce offering, the partnership involves comprehensive research and development work, the implementation of new Google communication and collaboration software across the enterprise, as well as the creation of the Carrefour-Google innovation lab. There is also a dedicated focus on working out how voice-enabled technology will play a role in the future of retail.
VR adoption progress slow
Plans for augmented or virtual reality tools to enhance shoppers’ experience are taking time to materialize, but Argus, AO.com, and Costa Coffee in the UK, and Walmart and Macy’s in the US, are among those with comprehensive trials underway.
What the research reveals
The research, which will be discussed in detail at Tech. festival in October, also highlights the growing importance of strategic technology partnerships as retailers’ digital ambitions grow.
Commenting on the findings, Poppie Mickleburgh, the event’s director, says, “New technologies have unlocked a level of potential that would have been unimaginable just a generation ago. All regions agree that there is a need for digital transformation and that a change in leadership mindset is required to do this. However, how they go about tackling this, and which technologies they prioritize, differs—which is fascinating, and offers a chance for international peers to learn from each other.