Editor's Note: Total Retail Releases its Annual Retail Technology Report
We're excited to announce the release of the 2023 Retail Technology Report: An Analysis of Trends, Buying Behaviors, and Future Opportunities. This annual report serves as a valuable research tool for retailers and brands to help them better understand the technology landscape within the industry, and then apply those learnings within their own organizations. The report was produced in conjunction with KWI, a retail point-of-sale and omnichannel platform,
For retailers to compete in today’s hypercompetitive market, they need to embrace innovation across their organizations. Doing so is required to meet and even exceed consumers’ rising expectations for the customer experience (CX). However, the constraints of budget, talent and other resources necessitate that retailers invest wisely in technology systems that truly move the needle for their businesses, whether it be improved CX, revenue generation, cost savings, increased efficiency, etc. Chasing the shiny object is not a sustainable tech road map.
Total Retail has surveyed its audience of retail executives — and technology decision makers — to better understand the impact technology is having not only on their internal operations, but also on the shopping experiences of their customers. We asked them about their companies’ current usage of technology, including identifying specific solutions within their tech stacks; future technology plans, including allocation of budget and how that may be adjusted; and the processes within their organizations for vetting and purchasing technology from third-party solution providers.
A total of 150 respondents took the online survey, which was conducted in May 2023 and June 2023. The respondents represented a mix of retail organizations (omnichannel, brick-and-mortar-only, online-only), as well as CPG and wholesale brands. The sizes of those companies ranged in annual revenue from enterprise ($1 billion or greater) to small (less than $1 million).
What the Survey Data Revealed
Here’s a look at some of the key findings to emerge from the survey:
- Inventory management and order management systems top the list of technologies that retailers are currently investing in (53 percent each). Retailers are prioritizing tools that can help them manage their most valuable asset, their inventory, as well as distribute that inventory efficiently and cost effectively across multiple sales and distribution points. Increasing consumer demand for omnichannel shopping experiences, including the fulfillment of orders, makes these tech systems critical for retailers’ operations going forward.
- Unlike the 2022 survey, when nearly three-quarters (74 percent) of respondents said they planned to increase their tech spending in the next 12 months, half of respondents this year will keep their tech spending flat. This pullback could be the result of a number of factors, including the threat of a recession, persistent inflationary pressure on goods and raw materials, rising transportation costs, among other factors.
- For those retailers that are planning to increase their technology budget over the next 12 months, more than half (54 percent) will boost spending by 6 percent to 10 percent. Similarly, for retailers that are planning to cut their technology budget in the next year, 40 percent said they'll decrease spending by 6 percent to 10 percent, the most of any of the answer options.
- Artificial intelligence (AI), and more specifically generative AI, is the technology that retailers are most willing to increase their spending on. The multiple applications of AI across a retail organization as well as its proven benefits have led to many retail executives figuring out how they can incorporate the technology into their businesses. Therefore, it’s likely that we’ve just scratched the surface when assessing the impact that AI will have on the retail industry.
- Retailers are primarily making tech investment decisions based on cost of ownership as well as ease of integration with existing systems. Regarding the latter, it aligns with respondents’ answers to the following question: What are the top challenges when implementing a new technology into your business? The No. 1 response, cited by 75 percent of respondents, was “integrating with existing technology.”
For more in-depth survey data as well as analysis of what it means for the retail industry, download the 2023 Retail Technology Report: An Analysis of Trends, Buying Behaviors, and Future Opportunities report here.
