Technically Speaking

May 01, 2002 9:30 PM  By

If you wish to stay competitive, loosen your purse strings for technology investments, advise analysts at Cambridge, MA-based Forrester Research Inc. At a seminar called “Making Retail Technology Pay Off,” held March 18-19 in New York City, Forrester researchers and retail executives discussed which technologies yield the best returns and how best to upgrade infrastructure for multichannel retailing.

It may not seem like it, but despite the economic downturn, retailers are spending on technology — spending 20% more, in fact, than Forrester’s Global 3,500 companies. Retail merchants allocate 4.3% of their revenue to CRM, procurement, supply chain, and merchandising apps. And they continue to pursue e-business: In 2001, retailers spent 4.5% of revenue on online ventures, compared to other companies’ 3%, according to Forrester data.

But before you whip out your checkbook, remember that today’s technology buys must integrate with all core and legacy systems. At Staples, for instance, said Forrester analyst Kate Delhagen, “if you order at an Internet kiosk, you can go to the store to complete the transaction at a cashier’s station.” Other tech innovators include The Home Depot, Saks Fifth Avenue, and Target Corp., with their creative use of wireless LANs, and Coca-Cola and Gap Inc., which deploy RFID to great effect. And all this is only the beginning. Confirmed technophiles should check out the Prada store in Manhattan — with dressing rooms that read garment RFID data, plasma screens informing the customer about the item being tried on, and soon-to-be-implemented customer ID systems, Prada, said Delhagen, is “piloting something that may revolutionize retail.”

What Have You Bought Lately?
G3,500 Retailers
Data mining software 36% 44%
Technology outsourcing 33% 39%
Supply chain apps 30% 34%
Wireless LANs 19% 32%
Source: Forrester Research Inc., January 2002