IT $$$ +9% W/O RFID: AMR, NRF

“IT spending in the retail industry has not increased this dramatically since the invention of bar code scanners.” So says Tony Friscia, president and CEO of Boston’s AMR Research Inc. He must be referring to spending on RFID, right? Wrong!

Friscia was describing the findings of the first joint study conducted by AMR Research and the National Retail Federation (NRF). The results show retailers are increasing their IT spending by more than 9% in 2004 — yet, according to Friscia, “projected expenditures did not include RFID compliance investment.” In 2005, however, RFID spending alone will boost retail IT investment, a trend that is a dramatic departure for an industry usually conservative in its approach to technology. Among the survey’s other findings:

  • The average retail IT budget increased from $219 million in 2003 to $239 million in 2004.
  • This year, capital expenditures are projected to be more than 27% higher than 2003 outlays.
  • Spending on network communication technology will go up more than 20%.
  • Retailers are budgeting an average 16% increase for IT staff training.

The study, drawn from a survey of 27 NRF CIO Council members representing over $180 billion in annual sales, dovetails nicely with another recent AMR Research report, “Technology Trends 2003,” a survey of 200 U.S. IT executives. It indicates that the majority of companies expect to increase their investment in technology this year, with customer management and performance management expected to be the most important areas of IT investment.

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