Total Retail's 2020 Retail Technology Report: Inventory Management Software Spending on the Rise
Retailers are most likely currently spending on technology that helps them track inventory and fulfill orders across multiple channels, especially as consumers engage with brands across a variety of touchpoints, and often in a single purchase journey. This was a key finding from Total Retail’s 2020 Retail Technology Report, which was produced in conjunction with Orckestra Technologies, a leading omnichannel commerce platform for innovative retailers and brands.
For the survey, Total Retail surveyed its audience of retail executives to get a better understanding of their current usage of technology, future technology needs and wants, and the processes within their organizations for making technology purchases. A total of 111 retail execs responded to the online survey, which was conducted in February 2020 and March 2020.
Specifically, the report revealed that two-thirds of respondents will be increasing spending on technology in the next 12 months, and only 3 percent said they will be decreasing it during that time frame. However, that number is down year-over-year, as nearly three-quarters (74 percent) of retailers said they were planning to increase technology spending in 2019.
What types of technology are retailers allocating their technology budgets toward? According to the report, they're most likely to be spending on inventory management software (64 percent are respondents are currently doing so), followed by order management systems (58 percent) and order fulfillment software (48 percent). An interesting finding to emerge from this year's survey is that retailers and brands are allocating less of their budgets to the more buzzed about emerging technologies. For example, less than 10 percent of respondents are using each of the following technologies: facial recognition, robots, beacons, and blockchain. In fact, none of the respondents are using drones to help with order delivery.
The report also highlights how retailers' spending on technology will change in the next 12 months. When looking at the data, it's clear that they will be ramping up their spending on technology systems and tools to help them better market to customers in 2020 and beyond. For example, nearly half of all respondents (48 percent) plan to increase spending on marketing automation tools in the next year. In addition, budget allocations for personalization software (43 percent) and CRM platforms (33 percent) will be seeing an increase in the next 12 months.
Merchants are seeking to leverage the vast amount of customer data they have to improve their marketing effectiveness. Customer experience is quickly becoming the new battleground for customer acquisition, not price, and merchants are trying to equip themselves with technology that optimizes CX. Personalized marketing drives engagement, which leads to conversion.
Examples of retailers that have successfully leveraged investments in technology to grow their businesses include Target. In 2018, the Minneapolis-based retail chain announced that it would invest $7 billion into stores and technology, helping to serve as the impetus for the company's resurgence. And Nike, which has invested in technology solutions for product development, in-store experience, supply chain, among other business functions, now refers to itself as "tech company."
Want more data like this? Check out Total Retail's 2020 Retail Technology Report, which provides valuable insights into the technology landscape within the retail industry. The data collected from 100-plus retail executives serves as a road map for retailers and brands, identifying the technologies their competitors are currently investing in as well as what they’re targeting for future spend. Use it to optimize your brand's tech stack.
Related story: 2020 Retail Technology Report