Customer retention, loyalty to drive IT investments in retail
According to a study by Gurgaon-based Annik Technology Services, a provider of market research and data management services, focus on customer retention and loyalty will drive significant investments in retail IT in the coming years.
The study reveals that CIOs are churning out innovative ideas to enhance customer’s shopping experience. They are experimenting with solutions involving point of sale (POS), such as printing coupons. Using their customer data collated over the years, retail CIOs are trying to understand the preferences of customers. Shopper loyalty discount is the most important in-store factor which helps making brand decision, states the study.
“Retail sector has moved up in the value chain of technology adoption,” says Partha Sarathi Sengupta, Senior Project Director at Annik Technology Services.
He adds that retail has crossed the stage of implementing inventory management, on-line activities, accounting and billing etc. and planning for mobile coupons. “Consumer interest in promotions, higher adoption rates and usage of mobile data services and the ability to reach younger demographics are driving adoption of mobile coupons,” he says.
IT spend by the retail sector in India has been averaging at 36 percent CAGR over the last few years. The estimated spending on IT by retail sector in 2010 remained $1.07 billion according to a recent study done by Annik Technology Services. There are more than 12 million retail outlets in the country.
As per the study, the biggest problem facing the retail sector is the absence of much differentiation.
“Indian retailers seem to have finally understood that to survive in the long run; they need to do something different which would attract customers. The loyalty program seems to have brought solutions for them,” says Sengupta.
The study also said that this sector spends maximum on business specific application followed by front end customer interaction and back end support function.
The modern retail market is estimated to be around $200 billion by the year 2014-15.
Many retail enterprises like Shoppers Stop and Globus have already deployed solutions to gain customer insights and analytics. Tools have been deployed to keep a track of customer buying patterns and tastes in order to increase their spending, provide more range of categories and increase their involvement with the brand.
According to industry experts, Internet and mobile retailing tools are some other areas that retail CIOs will be looking at as online buying is set to increase in the next three to four years.
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