As many as 70% of companies in the retail industry declare that their IT development expenditures in the coming year will not decrease. In this respect, 80% of the surveyed utilise their own IT resources. The key implementations that retailers are focusing on are the National System of e-Invoices, e-Receipts and loyalty systems, and a significant factor encouraging them to invest in software solutions are legislative changes. These are the main findings of the RetailTech 2023 report, prepared by Exorigo-Upos.
The retail industry has faced many challenges in recent years that have permanently changed the shopping habits of customers. This has had a significant impact on the investment decisions of retailers, who had to quickly and effectively adapt to a dynamic environment. After a period of caution, the time has come to defrost previously deferred implementations.
– After a momentary stagnation, which hit the retail industry hard, in talks with our clients, we are seeing growing enthusiasm and openness to new investments. Retailers are aware that building competitiveness in this market means constant technological development, so they are returning to projects that were “frozen” recently. On the one hand, it’s about KSeF or e-Receipts, on the other hand, the use of artificial intelligence or cloud for trade, says Grzegorz Rogaliński, CEO of Exorigo-Upos.
The survey results show that 36% of companies plan to increase their IT development expenditures, another 34% will maintain them at the current level. Among the most important implementations, the National System of e-Invoices (KSeF) stands out the most. As many as 66% of companies pointed to investments in this area as a priority in the next 12 months. 40% of the respondents considered e-Receipts to be the most important. Slightly less, because 35% of retailers plan to develop loyalty systems. Next are international expansion, cloud, metaverse or omnichannel.
The dominant trend in trade is automation, which is indicated by 58% of companies, with a simultaneous drop in demand and slowing down production, which is noticed by over half of the respondents. The economic effects of recent events are visible to 38% of those surveyed in the form of seeking cheaper alternatives and substitutes for raw materials or semi-finished products. The same percentage of surveyed companies report a significant drop in margins, caused by, among others, higher wholesale prices. Over 40% of large retailers, who employ over 250 people, among the key trends, mention sustainable development and ESG. This issue is important for nearly 28% of companies from the medium retailers sector (i.e. those who employ 50 to 249 employees).
Among the mentioned trends, there is also a slowdown in the expansion of e-commerce and a return of consumers to brick-and-mortar stores. Although it is indicated by just over 7% of medium-sized retailers and only 3% of large chains, combined with a high rate of automation, it allows predicting an increased importance of omnicommerce.
– Omnicommerce, or multichannel sales, is a concept that is becoming increasingly visible in the retail industry, slowly taking the place of omnichannel. It is a technology-based strategy to provide customers with a seamless and personalised shopping experience in an end-to-end format. It is based on the integration of all available sales channels and touchpoints with the brand, as well as systems, payment methods, processes and consumer data. So it is a natural direction of development and basically defining under one term the most important issues for retail, says Anna Schabikowska, Marketing Director and Advisor to the Board of Exorigo-Upos.
Entrepreneurs also pointed to the main challenges they face in the context of investing in technologies supporting their development. The biggest barrier in the surveyed groups is finance – almost half of the medium retailers and almost 40% of large companies point to the problem of finding a budget for investments in this segment. 30% of the respondents point out a lack of government, EU or grant support. In total, 42% of the respondents also feel a lack of expert knowledge. To a great extent, entrepreneurs develop IT technologies using their own IT teams supported by external professionals.
– As the data show, as many as 80% of the respondents use their own human resources in the field of IT development. This happens in various formats – such retailers either build and permanently maintain such teams or seek support from external suppliers as support for their own specialists. The amount of such investments is in most cases a value from 1 to 2% of average annual turnover. Among them, 1/5 of the largest companies declare to allocate more than 5% of average annual turnover for this purpose. Thanks to this we see that the industry is first and foremost professionalising services. Secondly, naturally, the most is invested by large retail chains, which set the direction of industry development, adds Marcin Zimnicki, Director of Retail Technology Hub and a member of the Exorigo-Upos board.
When choosing a supplier, entrepreneurs once again primarily consider the price, indicated by 55% of respondents. Further down the list are experience in the industry and references from other market participants, mentioned by 37% of the respondents. The implementation of new solutions is determined by their adjustment to current trends and needs. In the vast majority (64%), retailers rate them as average – which may indicate a strengthening trend of personalisation. Existing solutions are only partially adapted to the expectations of retailers.
The study is based on a survey of 100 medium and large companies, whose annual turnover exceeds PLN 100 million. The study was conducted by Keralla Research.
