retail it survey 2014 - logicalis · 2014-09-26 · with customer-centric initiatives leading...

Retail IT Survey 2014The Rise of the Service Defined Retailer?

2 3

Retail IT Survey 2014

Contents

Executive Summary: page 4

IT as a Provider to the BusinessAligning with business priorities: page 5Bridging the communications gap: page 6

The IT Power ShiftShadow IT and the call for more control: pages 7 - 9

IT for Business InnovationReliance and adoption of key technologies: page 10Innovating with business analytics, cloud and mobility: pages 11 - 13

Survey Methodology: page 14

The Logicalis Retail Survey 2014 seeks to uncover the changing business relationship with the IT department, establishing the future expectations and demands of retail IT from the view of its internal customers. The survey was conducted in June 2014, by Vanson Bourne, with 100 business decision-makers in mid-large UK retail organisations.

4 5


What are your business priorities over the next 2-5 years?Multiple Responses

IT as a Provider to the Business

IT must do more to support customer-centric business goals

The top three retail business priorities are: (1) improve customer satisfaction; (2)

improve customer loyalty; and (3) attract new customers. However less than 1 in 5

believe that their IT team is fully aware of these business priorities today.

As the drive for digital e-commerce and the trend in the consumerisation of

technology continue to evolve at pace, it’s no surprise that IT-centric business

objectives - building a greater online (34%) and mobile (25%) presence - also rank

highly as key priorities amongst decision-makers. Yet IT, a critical enabler in this

agenda, is widely considered out of step in helping to contribute to these goals -

just 10% state that their IT services team is currently meeting all their departmental

needs. The retail decision-maker wants better engagement with, and from,

their IT team…

Just 18% believe IT is fully aware of their business priorities

Only 1 in 10 say the IT services team currently matches all of their departmental needs

27% state the IT team makes a significant contribution to achieving departmental goals

Improve customer satisfaction

Improve customer loyalty

Attract new customers

A greater online presence

Increase customer spend

Reduce waste of stock

A greater mobile presence

Manage organisational risk

Increase pro�t margins of the organisation

Better understanding of customer demand

Improve forecasting and accuracy

Increase customer awareness of brand

Improve green credentials

Mitigate fraud and maintain security & compliance

Improve supply-chain ef�ciency

Other

0 10 20 30 40 50

44%40%

38%34%

30%28%

25%25%

22%19%19%

18%16%

6%2%

1%

The relationship between business and IT is changing in UK retail. This report provides a unique insight for IT Leaders into how the new breed of tech-savvy internal customers, department heads and decision-makers, view the current and future role of IT in business.

The findings point to a retail industry ready for a new, strategic approach to technology innovation from its IT Leaders, a demand for

more business influence over IT decisions and a shift, already underway, toward a Service Defined Enterprise.

As decision-makers call for a more collaborative and consultative approach to IT service delivery, and fast, IT Leaders must prepare

for change. With rising pressure to align more closely with business strategy, now is the time to re-shape the IT function to focus on

high-value, strategic initiatives…

Executive Summary

The Communications Gap

Only 1 in 10 retail decision-makers believe the IT services team

currently matches all of their departmental needs, and less than

one third say IT makes a significant contribution to achieving

their business goals.

Clearly IT services cannot afford to be isolated if decisions are

to reflect and directly support business imperatives. However,

two thirds report a communications problem between their

department and IT, citing IT as too slow to respond (29%) and

too technical and difficult to understand (39%).

An IT Power Shift

Business decision-makers are not just calling for more

influence over IT, they are actively pursuing it. More than 9 in

10 want more influence and control in IT decision-making and

purchasing, and 80% admit to already purchasing technology

without the knowledge of IT, believing it to be faster and easier.

Over half believe they already have the knowledge needed to

take control of IT decisions today, but the call to elevate IT to

a strategic partner to enable this shift is clear. In the next 2-5

years, retail decision-makers believe IT should first prioritise

guidance and consultancy to help them maximise IT and make

future decisions, followed by developing strategy and innovation

of services. It’s telling that nowhere in their priorities was IT

support and systems management.

Time for Change?

Decision-makers believe increased IT influence is already on its

way, and on average that it will come within 12 months. Critically,

they believe it is this change that will help see their business

goals realised.

With customer-centric initiatives leading business priorities,

reliance on key technologies is already high - mobile 80%,

cloud 85% and data analytics & forecasting 90%. However,

retailers are not yet leveraging these investments to achieve their

top business goals of improving customer satisfaction, loyalty

and retention.

Although half say business analytics is already a great help to

their department, only 4% are using it to anticipate future trends

that could impact business performance. Similarly, the trend

for offering wireless for shoppers in-store is on the rise (48%

adoption in 2013-2014), but the opportunity to extract useful

data and increase customer engagement is not being exploited.

It is exactly these opportunities where a strategic, consultative IT

Leader can really make a mark on business performance.

The Service Defined Retailer

If IT is to serve its internal customers effectively and deliver

strategic value, they need to do things differently. It’s time for

the traditional IT department to evolve into an Internal Enterprise

Service Provider, moving from managing technology to offering

a consultative service portfolio for its users to exploit IT for

competitive advantage.

Our 2013 research into the changing role of the CIO - Optimal

Services Research Paper* - found IT Leaders have a clear

understanding of this new business IT reality, and are seeking

to shift toward this more strategic role. It seems then, that

business and IT Leaders want the same thing, now is the time

to make it happen.

- Gerry Carroll, Marketing Director, Logicalis UK

*Available to download from www.uk.logicalis.com/knowledge-share

6 7


What do you think should be IT’s priorities in the next 2-5 years?

The IT Power ShiftRetailers call for IT to focus on strategy, innovation and consultancy

Retailers’ top 3 priorities for IT are: (1) to provide consultancy and

guidance to the business to help make decisions; (2) focus on

technology strategy to deliver on business goals; and (3) innovate

technology and services for business efficiency.

With less than 6% believing day-to-day services such as IT support

and systems management should be considered a priority for

their IT team, retail decision-makers clearly want their internal IT

services team to move to a more consultative and collaborative

approach to services.

A new dynamic for communicating with the business (39%), and

better aligning with business goals (56%) are considered critical

steps to achieve the shift to acting as a strategic internal service

provider to help them better exploit IT for competitive advantage.

Top 5 improvements to help achieve business priorities

Communicate more often (47%) and more effectively (39%)

Implement systems that make business goals easier to achieve (38%)

Help us to understand how to best use IT to achieve business goals (31%)

Have a greater awareness of our goals (25%) and be proactive in understanding our needs (22%)

Be more consultative with us (9%)

What challenges do you encounter with your IT services team?Multiple Responses

Two thirds report a communications gap with IT

Although 43% of decision-makers are connecting with

their IT services team on average once a week, 66% report

communications as an issue.

When asked why they don’t engage more frequently, even though a

positive 36% state that IT meet their needs as and when they arise,

more complain of a misalignment of goals (43%) and that IT are

too technical and difficult to understand (39%) when liaising with

the business.

It seems that IT’s traditional culture of saying no to innovation is also

still at large in some retailers, with 27% reporting IT as unable to

install the software and services they need, and 31% saying apps,

services and devices have been disallowed.

43% cite that IT’s goals do not match their own department’s needs

1 in 5 communicate with their IT team less than once a month

29% said IT is too slow to respond to their needs

Lack of budget

Too slow to support the devices we need

Unable to support the devices we need

Lengthy trouble shooting times

Unable to install the software/services we need

Out of date software/systems

Problems with their availability to support us

Dif�cult to get hold of when we need them

Too slow to install the software/services we need

Communication issues - dif�culty in understanding our needs

13%

18%

25%

26%

27%

31%

31%

32%

33%

35%

0 5 10 15 20 25 30 35

Delivering IT support to employees

Ongoing management of IT systems

Making sure the existing IT infrastructure/services are reliable

Digital business growth & enablement

Innovation of technology/services for delivering better business ef�ciency

Technology strategy/implementation for delivering on your department priorities

Providing guidance and consultancy to you to maximise existing IT/make future IT decisions

0%

6%

12%

14%

17%

21%

30%

0 5 10 15 20 25 30

8 9


What are the main reasons for you bypassing the IT team? Proportion of respondents, multiple responses

4 in 5 admit to bypassing the IT team for speed and simplicity

86% of shadow IT has started in the last 12 months

4 in 10 call out ‘too much red tape’ in IT department processes

39% believe purchasing IT was easier and quicker without the IT team

I am allowed to purchase technology that my department needs

I know what I need better than the IT department

It did not require any budget (free app/services)

It was easier and quicker

Other

The IT department would slow things down

Too much red-tape going through of�cial IT channels

34%

0 10 20 30 40 50

40%

11%

39%

8%

41%

40%

When do you think you will get more control and influence over IT?

9 in 10 want more influence and control in IT decision-making

Although over half of respondents still rely on the IT team at some

stage in technology decision-making today, 92% want increased

responsibility for IT. There’s no time to sit back either, on average

these decision-makers believe they will gain more control over IT

budgets within 12 months.

80% are already taking matters into their own hands admitting

they have sourced and implemented technology for use in their

department without going through IT first.

With shadow IT well underway in UK retail, IT Leaders must listen

to the call for a new business relationship – one of consultancy

and guidance – to embrace the increased interest and

understanding of IT to support and enable high-value, strategic

initiatives throughout the business.

Over half believe they already have the knowledge needed to take control of IT decisions

16% would like total control over IT-decision making

Top 3 business improvements from taking more IT control are: (1) improving customer satisfaction; (2) attracting new customers; and (3) a greater online presence

0

5

10

15

20

25

30

35

40

Never Within the next 6 months

6 - 12months

1 - 2years

2 - 3years

3 - 5years

2%

20%

24%

38%

15%

1%

10 11


Ways data and information analytics is benefitting delivery of services and enhancing decision-making: Proportion of respondents, multiple responses

Inform us on...

Data analytics can do more for customer-centric insight

Over 48% of retail decision-makers are seeing positive results

from their use of analytics, however just 4% are using the insight

of predictive analytics for anticipating future trends that could

influence business performance.

Notably, fewer external facing decision-makers (sales and

marketing) are using analytics for delivering customer-centric

information than their internal-facing counterparts. 48% of

internal-facing decision makers (finance and operations) state

that they benefit from analytics to measure customer response

to marketing and sales initiatives, compared to just 32% of

external. Similarly, using data on customer demand for product

lines to inform future decisions is helping 67% of internal leads,

but just 48% of external.

Investing in IT for InnovationHigh adoption of data analytics, cloud and mobility

How reliant is the successful running of your department on the following technologies today?

Adoption rate of key technologies:

Only 7% do not plan to implement cloud computing

97% are using, or plan to use, data information & analytics

Wireless and mobility key for 9 in 10 retail decision-makers

19%42%24%8%7%

32%32%16%12%8%

20%40%30%8%2%

Wireless access & mobility (including smart devices like iPads) in your role

We have used for more than one year

We began using in the last year

We plan to adopt next year We have no plans to adopt

Data & information analytics to inform decision-making

Cloud computing (including apps & services)

0

20

40

60

80

100

19%

55%

21%

5%

58%

20%

3%

19%

65%

16%

12%

7%

0 20 40 60 80 100

19%42%24%8%7%

32%32%16%12%8%

20%40%30%8%2%

Cloud computing

Data analytics and forecasting tools

Mobile devices (smartphones, iPads etc.)

1-not at all reliant 2 3 4 5-completely reliant

0 10 20 30 40 50 60 70 80

2%

12%

...what areas of the business are performing well or �agging �nancially

...customer demand for product lines to inform future decisions

...customer response to marketing and sales initiatives to inform future decisions

...what areas of the business need investment

…any seasonal variations or trends on performance and how we may deal with these

...which sales channels are performing well and help us understand why

...and helps us anticipate future trends that could in�uence performance

None of the above

5%

3%

32%

27%

34%

33%

30%

45%

32%

48%

48%

67%

61%

52%

External

Internal

12 13


Future IT investment that would make the most difference to decision-makers:Multiple responses

Cloud tops the list for IT investment demand

The top IT investments retail decision-makers believe would make the

most difference in enabling them are cloud computing, wireless access and

mobility/smart devices.

The need for productivity and the consumerisation of business IT is clearly

apparent in these choices, as is the need for IT Leaders to play their part in

ensuring investment adds strategic value to business goals…

Although improving loyalty and attracting new customers are top business

priorities, new customer engagement channels is low in decision-makers IT

investment considerations (26%). Similarly, data analytics only ranks sixth

(24%) despite not yet being fully exploited to provide value for customer-

centric initiatives today.

As the IT power-shift gathers pace, the onus on IT Leaders to educate, guide

and consult on best use of technology is becoming increasingly important.

As retailers start to re-shape the IT function, those adopting a collaborative

approach that aligns decision-maker needs and IT’s strategic advice,

consultancy and knowledge, will be best positioned to exploit IT investment

for gaining real business advantage.

Wireless is top investment priority for large retail organisations (3000+ employees)

BYOD and mobile app investment more important for external facing decision-makers (48%) than internal (20%)

As consumers, more than 9 in 10 (95%) are using cloud-based services

Key business drivers for offering customer wireless by company size: Proportion of respondents

55% offer wireless to shoppers in-store

Over half currently offer wireless to

customers in-store, with the majority

(41%) of adoption taking place in the

last 12 months. Of those that currently

provide wireless, larger retailers (3000+

employees) have been driven largely

by customer demand whilst mid-size

organisations (500 – 999 employees)

also focus on its more innovative

uses, such as extracting shop floor

movement and footfall data, and

engaging customers with offers whilst

they shop.

Top business drivers for deploying in-store wireless

1. Customers want it; it improves loyalty and satisfaction

2. Customers expect it

3. We can get useful data from it, like footfall and shopper-floor movement

4. We can/will be able to engage with customers while they shop i.e. send marketing and offers to their mobiles

0 10 20 30 40 50 60 70 80

54%

42%

78%

46%

33%

33%

38%

8%

17%Ability to engage with customers while they shop, send marketing/advertising/offers to

their mobile

Ability to get useful data from it, like footfall & shopper-�oor movement

Customers expect it

3000+ employees

1000-2999 employees

500-999 employees

0 10 20 30 40 50 60

26%

29%

15%

29%

15%

6%

41%

15%

12% 25% 9%

28% 21%

18%3%

44% 24%

47% 18%

34% 15%

44% 21%

34% 47%

47% 41%Cloud computing

Wireless access

Collaboration & communication technology

New customer engagement channels

Smart devices & mobility

Data & information analytics

None

BYOD (bring your own device)

Mobile apps

500-999 employees

1000-2999 employees

3000+ employees

14 15


About the Research

All figures are drawn from a survey of 100 decision-

makers in UK retail conducted in Summer 2014.

Vanson Bourne, an independent specialist in market

research for the technology sector, conducted 100

interviews with business decision makers in UK retail

organisations of more than 500 employees.

The retail decision makers were from senior positions in

finance, marketing, sales and operations. Respondents

were questioned on their evolving relationship with the

IT department and their growing influence, dependency

and demand for leveraging technology to meet business

and departmental goals.

Base size: 100 business decision-makers in UK retail organisations

Company size: 500+ employees with an average of 163 physical stores

Fieldwork period: June 2014

Conducted by: Vanson Bourne

© Logicalis 2014. All trademarks are acknowledged.The information in this brochure is subject to change.

What can we do for

your organisation?

Visit

www.uk.logicalis.com

Call

01753 490 767

Email

[email protected]

Logicalis UK Ltd

110 Buckingham Avenue

Slough

Berkshire

SL1 4PF

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retail it survey 2014 - logicalis · 2014-09-26 · with customer-centric initiatives leading...

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