The Covid-19 pandemic has shaken up our world and continues to cast deep uncertainty over the future. But while there have already been significant costs to jobs and livelihoods, it has also been remarkable how many businesses have shown their resilience to pivot and adapt.
One sector where this particularly stands out is retail. The consumer shift to online and digital shopping was already pronounced, but the pandemic has accelerated that to a significant degree and retailers have responded at speed, bolstering their ecommerce offerings and driving their digital channels.
In fact, this year’s Harvey Nash/KPMG CIO Survey, conducted amongst over 4,200 CIOs and tech leaders around the world, finds that retailers invested a staggering $10bn in just three months as the pandemic took hold to strengthen their digital capabilities as well as enable staff to transition to home working. This means they spent more than their projected annual technology budget rise in the space of just one quarter.
Our research also revealed that over half (57%) of UK retailers expect their overall IT/technology budget to increase over the next 12 months, and the vast majority (82%) also report that they expect their tech headcount to increase (45.5%) or stay the same (36.5%) in the year ahead.
This is obviously highly encouraging news for technologists working in retail – or those who want to carve out an IT career in the sector.
Of course, the overall picture for retail is complex and far from uniform. Those who depend on their physical outlets are facing very challenging times. Recent research found that a record number of shops closed in the first half of this year. Walk through the centre of any major city and you’ll see how many outlets dependent on business from office workers and other visitors are now presenting dark windows to the streets.
This mixed picture was reflected in our survey: we found that almost half of retailers had to ‘hard reset’ or transform their operations digitally to weather the crisis. On the other hand, for more than three in ten the challenge was to deal with a significant surge in demand driven through online channels.
Overall, retail sales have begun to hold up again with the latest Retail Sales Monitor from the BRC showing that total sales increased by 6.1% in September on a like-for-like basis compared to September 2019. But it is online sales that are producing the spectacular numbers – sales jumping by 36.7% in September against growth of 3.5% a year earlier.
We have to hope that, as the pandemic works itself through and a vaccine is eventually found, life will return nearer to normal and, with that, high streets will begin to properly recover. There is little doubt that there remains pent-up demand amongst many consumers for the physical shopping experience. Whilst the pandemic has accelerated online adoption, it has also revealed its limits, leaving many consumers cherishing that physical experience more than ever.
But at the same time, the changes we are seeing feel decisive. The uplift in ecommerce is with us to stay; increasing numbers of individuals are likely to use digital as their default, reducing the amount of shopping they do in person.
The ramifications for retail are enormous. A business model shift will continue to unfold before us as a new normal becomes clearer. Technology will be at the heart of this. The pandemic has already been a time for technologists to shine, to show how they can help businesses transform at pace and at scale. They have been right at the epicentre of the rapid response effort.
Moving forward then, it is no surprise that retailers expect their technology investment and resourcing to increase. There is huge demand for talent, with our research showing that the most sought-after skills are those with expertise in enterprise architecture, business analysis and organisational change management. The top three most important technology investments that retailers anticipate making are in systems of insight (e.g. business intelligence), customer experience and engagement, and supply chain and logistics. The logic in this is clear: everything must be geared around business transformation, the leveraging of customer insight and data, and speedy fulfilment.
In terms of attracting talent, retailers face tough competition against each other and against businesses in other sectors, all of whom have a heightened demand for IT skills. But they are in an attractive sector that many technologists will want to work in, and can also now potentially source talent from a much wider – even global – pool given that working models have become so distributed. It may also be an opportunity to drive up their diversity, being able to consider mothers (and fathers), carers and others who need more flexible working patterns.
For individuals meanwhile, retail offers so much to aim at. Those in possession of specialist tech skills will find themselves in high demand. At the same time, for those willing to retrain and upskill, increasing numbers of entry level tech opportunities could open up. A new government upskilling programme is also set to launch in the New Year to “prepare workers for the post-Covid economy” with a particular emphasis on technical and digital skills.
Through all the change that the UK economy is experiencing, online retail is in rapid growth mode. The opportunities are there for those retailers that get their digital proposition right.