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The doom and gloom on Britain’s high streets in the last year that has cleared towns of giants like MFI and Woolworths has found its way into retailers’ IT departments. IT budgets in the sector have fallen by about 20 per cent over the past 12 months, a contraction defied only by spending on web and e-commerce projects holding steady. The result is IT directors being handed budgets that equate to just 1.1 per cent of their retailer’s total sales, compared with 1.3 per cent at the same time last year. Intrinsic to the cutbacks, and in an attempt to minimise redundancies, IT directors have shelved plans for outsourcing initiatives in favour of alternatives in-house. Many have cut IT budgets outright, and have been forced to make “large changes” to IT as a result, said Brian Hume, managing director of Martec International, the firm behind the figures. Based on interviews with IT directors at 100 leading retailers, the firm found 15 per cent had had such overhauls to cut costs, with some reporting their IT budget was down by 50 per cent. Though the researchers did find some “bright spots for retail investment in IT” said Richard Lowe, chief executive of BT Expedite, the teleco’s retail arm, which commissioned the study. They include store systems, multi-channel projects, PCI compliance, mobile technology – both in-store and in the supply chain, and, the brightest spot of all, e-commerce. In fact, so-called ‘non-store’ sales emerged as the “one area of retail that is showing growth and that has not been adversely affected by the recession,” the research authors said. Budgets for e-initiatives now account for 4.8 per cent of sales, up from 4.4 per cent last year, the research shows, with 85 per cent of respondents predicting non-store sales to increase. However store systems is the IT item which is highest on retailers’ shopping lists, with almost one in five readying an ad-hoc budget, and a quarter planning to upgrade their existing ones. “We’re also seeing retailers looking to sweat their existing assets as far as possible,” Mr Lowe said, “and this is sparking plenty of demand for small IT projects with quick payback. Where bottom line improvement can be demonstrated, retailers are more than willing to embrace new technology.” Aug 6, 2009 Email this article Printer friendly page Previous Page
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