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Store systems beat online in terms of retailers’ investment priorities

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Retailers’ IT budgets have been slashed by some 20% over the past year, down from 1.3% of sales to 1.1%, according to a survey of the top 100 retailers conducted by Martec International on behalf of BT Expedite.

However, despite this reflection of the current economic situation, it is far from doom and gloom for all retailers, the IT in Retail study reports, with the shift to multi-channel retailing and the growth of mobile internet access and m-commerce continuing to shine through.

“Many retailers have cut their IT budgets, with 15% making large changes to bring their costs down, some by as much as 50%,” says Brian Hume, managing director of Martec. “There’s also a clear trend to bring things back in-house to minimise redundancies.”

Although five points down on last year, store systems remain the highest IT priority for investment for 19% of companies and almost a quarter of retailers are planning to replace their systems.

Looking at non-stores sales, none of the respondents felt that sales as a percentage of total sales would decrease next year and 85% felt they would increase — and ecommerce and web sites are the second most important area for investment highlighted in the study.

“Despite the obvious cutbacks, there are some bright spots for retail investment in IT, particularly in ecommerce, multi-channel and PCI compliance,” says Richard Lowe, CEO of BT Expedite.

“We’re also seeing retailers looking to sweat their existing assets as far as possible and this is sparking plenty of demand for small IT projects with quick payback,” he added. “Where bottom line improvement can be demonstrated, retailers are more than willing to embrace new technology.”

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