IT to play key role in retail upturn

Retailers are increasingly looking to technology in support of their efforts to cope with recession and position themselves for the upturn when it arrives.

These were the conclusions revealed today from research carried out by software vendor SAP among a number of its customers and British Retail Consortium (BRC) members.

The survey of retail directors across key business functions revealed that UK retailers are focusing on growth into new channels or territories, while driving initiatives to better understand consumer demand and cut costs.

Just over half (51 per cent) of those retailers questioned said they were looking to expand into different regions or channels as a way to mitigate the affects of falling revenues.

At the same time, 90 per cent were planning to optimise inventory levels, with streamlined buying, forecasting and replenishment systems. While 54 per cent believed that understanding the customer would be key surviving the downturn.

Richard Lim, BRC retail analyst, added that retailers had actively taken between 10-15 per cent of stock out of their inventories this year and 40 per cent had actively reduced the amount of stock they held.

According to the research, this positioned IT strongly, as many said the likes of task management software would help staff become more productive in the back of the store so they have more time to spend with customers, for example.

Richard Mills, retail industry principle for SAP UK and Ireland, said: "You will see an increased focus on analytics, to better understand the lifecycle of consumer demand and how the retailer should respond."

The survey also found that 35 per cent of retailers were using IT to automate processes, in order to free staff up to spend more time with customers or take costs out of key business processes, such as in the supply chain.

In fact, the research found 51 per cent of those functional directors questioned said customer analytics would be particularly key in the near future, as "consumer confidence starts to rise," according to Lim.

"It's those retailers who use technology to support what they already do best that will come out of this downturn best," added Mills.