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Retailers do not know what technology they need, according to 44% of IT suppliers.
Research by law firm Ashfords LLP found that many IT suppliers believe there is a disconnect between their own objectives and those of the retailers they are supplying technology to.
Retailers are definitely seeing the need for more technology in stores and across their businesses, with 82% claiming they will have greater collaboration with technology companies by 2025.
“The good news is that retailers recognise that challenges are looming, and not only in ensuring technology keeps up with competitors and changing demand. The legal and regulatory hurdles of handling increasing amounts of customer data are significant,” said Louise Workman, head of retail at Ashfords.
“Retailers and tech suppliers are positive about their future prospects, but will have to pool resources and ensure they are prepared to thrive in a rapidly changing and fluid environment.”
Seeking innovation through tech startups
This need for collaboration has led to some retailers collaborating with technology firms to find the next generation of technology startups, both to drive collaboration and technology innovation in the retail sector.
For example, online retailer Asos joined the Microsoft Ventures startup programme last year to identify new companies that could be beneficial to the retail sector.
A recent Tech London Advocates study found the IT industry believes retail technology will be the next industry sector to create billion-dollar startup companies, often dubbed unicorns.
Read more about retail technology
But although retailers are keen to implement technology, 48% admitted they don’t know what their customers want, and when they do they are unsure of how to use technology to provide customers with what they need.
For some retailers this means greater reliance on IT suppliers, but 60% of retailers have begun to focus on making technology an in-house function and more than half have created their own innovation departments to pursue the use of digital technologies.
For example, John Lewis runs a startup accelerator called JLab to invest in retail-focused tech startups that may be able to solve existing problems in the sector, and Sainsbury’s has its own digital lab to host creative and agile methods of adapting the brand’s digital services and presence.
Advances in retail technology present data challenges
Where new technologies are implemented, retailers are concerned about the data challenges this will present. Although data analytics can be used to adapt to customer behaviour, there has been a 70% increase in the level of concern over data security for retailers in the past two years.
In October 2015, M&S suspended its website following an IT glitch that allowed customers to see other customers’ data, proving retailers still have a long way to go to properly understand and manage customer information.
According to technology suppliers, mobile payments, big data and wearable technology are areas retailers are growing more concerned about.
“The challenge to create a seamless, modern and informative retail experience is huge and our research shows that retail businesses are fully aware of the steps they need to take,” said Ashfords CEO and head of technology Garry Mackay.
“The future of retail in a technology-empowered world is bright. However, staying competitive in the years to come will only be possible when retailers pool their resources and collaborate more closely with their tech providers.”