- 44 per cent of tech suppliers say retailers are unclear on what technology they need
- 34 per cent of retailers are now demanding shared risk arrangements with tech providers, citing data security concerns
- However, 64 per cent of retailers are optimistic about their growth potential
- Four
in five (82 per cent) of retailers believe that by 2025 tech suppliers
and retailers will have a far more collaborative relationship
Despite widespread awareness of the need for improved technology, nearly half of UK retailers (48 per cent)
say they don’t fully understand what their customers want and are
unclear of how to provide it, causing them to rely more on their tech
suppliers. This insight comes from new research by Ashfords LLP, a UK law firm.
The research, which surveyed over 250 retailers and technology providers as part of the Technology in Retail: Retail Re-imagined report,
reveals voids in both insight and innovation, caused in part by a lack
of collaboration between retailers and technology suppliers. 42per
cent of tech suppliers worry they are not working towards the same
objectives as retailers, meaning they are unable to ensure their
investment is aligned with providing the best service.
However, 64per
cent of retailers say that they are optimistic about their growth
potential over the next twelve months. Four in five retailers (82 per
cent) believe that they will have a far more collaborative relationship
with their tech suppliers by 2025, ensuring the development of better,
more customer centric technologies.
But
the future will also present challenges, such as concerns regarding data
production, something that both retailers and technology suppliers are
acutely aware of. The majority of tech suppliers have seen retailers’
levels of concern over regulation / compliance (72 per cent) and data
security (70 per cent) increase over the last two years. Concerns have
also led to 34% of retailers demanding shared risk arrangements with
their tech providers, in preparation for possible future rule changes.
Louise
Workman, Head of Retail at Ashfords said, “The good news is that
retailers recognise that challenges are looming, and not only in
ensuring technology keeps up with competitors and changing demand, the
legal and regulatory hurdles of handling increasing amounts of customer
data are significant. Retailers and tech suppliers both are positive
about their future prospects, but will have to pool resources and ensure
they are prepared to thrive in a rapidly changing and fluid
environment.”
Addressing the innovation void – Technology suppliers under pressure
Providers
of technology to retailers face specific pressures in meeting their
retail partners’ demands, particularly the need for a greater range of
products and services (46 per cent) and more innovation / creative
thinking (44 per cent). Tech suppliers are being compelled to provide
timely, accurate and insightful consultation on the latest retail
trends, particularly in relation to mobile payments (41 per cent), big
data (42 per cent) and wearable tech (30 per cent).
The
demand for constant upgrades has led some retailers to take a more
proactive role in sourcing new technologies. Three in five (60 per cent)
are pursuing in-house technology development and more than half are
creating their own ‘innovation labs’ (55 per cent).
However,
retailers and providers are coming to realise that closer collaboration
will be needed to keep up with the pace of innovation and in meeting
customer demands. Just under half (45 per cent) are creating ‘innovation
partnerships’ to support their technology partners, and around the same
number (51 per cent) setting are up retail conferences / communities.
Garry
Mackay, Ashfords CEO and Head of Technology said, “The challenge to
create a seamless, modern and informative retail experience is huge and
our research shows that retail businesses are fully aware of steps they
need to take. The future of retail in a technology empowered world is
bright. However, staying competitive in the years to come will only be
possible when retailers pool their resources and collaborate more
closely with their tech providers.”
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