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Retail Technology, Retail technology News

Survey delivers retail technology wake-up call

Friday July 13 2012

Retailers reveal disconnect between technology use and innovation amid prevailing uncertainty

Market_trends_genericRetailers reveal disconnect between technology use and innovation amid prevailing uncertainty


A recent survey of executive business leaders has found UK retailers failing to exploit the potential of technological innovation.


The Fit to Change study published by Fujitsu, which included interviews with 150 UK executives, including 50 retailers, suggested that uncertainty about the future went alongside an ambivalent attitude toward.


Five years ago, 54% of retail respondents felt they could plan two years ahead with a degree of certainty. That compares with just 12% now. On the other hand, more than half (56%) of the retailers recently surveyed believe that technology is actually a barrier to change within their organisation.


Retail Technology spoke to James Woudhuysen, Professor of Forecasting and Innovation at De Montfort University, Leicester, about the survey. His association with Big Potatoes: The London Manifesto for Innovation and the De Montfort Retail Lab has brought him to the view that neglect of research and development (R&D) in science and technology is hurting UK retailers.


Dogma of uncertainty


Woudhuysen highlighted two findings. First, 70% of retailers believe the current rate of change is too quick for them to keep up with. Second, the same proportion said failure to do so was one of the most significant risks facing their organisations today.


“Retailers say the current pace of change is too quick. In markets and in regulation, which is what they said they were most worried about, they may be right. But change is quite slow in terms of retailers bringing really useful technologies to the shopper,” Woudhuysen argued. “Moreover, the idea that change is always too fast is consistent with Fujitsu’s revelation that just one in eight retailers think they can plan two years ahead. There’s a whole dogma of uncertainty out there, and that tends to impair technological innovation, in retail as anywhere else.”


He said: “One thing that’s absolutely certain is that if technology is seen as a problem, not a solution, UK retailers will hit trouble. M&S stands alone in spending more than one per cent of its revenues on R&D. Yet UK businesses, including retailers, are sitting on £750 billion in cash. That’s not getting spent on innovation.”


Historic future-facing view


Pointing to the last industrial revolution, he said: “The US department store ushered in plate glass, the lift, the Ladies Home Journal and the mail order catalogue. For consumers, the 21st century hasn’t made that kind of difference to their shopping.”


“The biggest innovations have been e-commerce and m-commerce, but they were hardly driven by retailers,” he added.


Woudhuysen called for “imaginative, ingenious” R&D, “with plenty of failed prototypes”. He also cited some examples: “Take data visualisation. That could help deliver new, cheaper ways of shopping for consumers, both in-store and online – mashing up product information, location, price and choice in adventurous but clear graphics,” he said. “Yet we still don’t even see simple shelf-edge electronic displays, or intelligent lighting. Luxury shops make some interesting experiments in holography, but the major retailers seem to have ignored the potential of 3D printing.”


Retail must take lead on change


He called on retail IT leaders to “make an unabashed case for the potential of technology to lead change”.


Andy Taylor, Fujitsu UK & Ireland retail director, added that a number of external factors, including volatile economic conditions, have created unpredictable consumer spending habits. “As a result, there is tremendous pressure on technology planning and deployment to cope with this pace of change and to keep the focus on strategic outcomes rather than on tactical stop gaps,” he said.


Robin Youngs, Mitchells & Butlers operations director also commented that the global economic downturn and credit crunch has made almost every western business even more conservative. “Pulling risk curves down and delaying change initiatives simply creates and even bigger divide between the best and the old-world best,” he concluded. “Fortune favours the brave and never has this been more true.”