Gartner: Retailers accelerating IT adoption

Retailers have shed their reputation for being technology laggards and are funneling IT dollars to nearly all areas of their businesses, according to one Gartner analyst.

"The rate of technology adoption in the retail industry is accelerating," said Jeff Roster, principal analyst at Gartner. Retailers are transforming their operational systems, from supply chain and back-office applications to merchandising and in-store communications technologies, Roster said. "It's all hot," he said.

Roster presented the results of Gartner's annual Retail Technology Study, conducted in association with RIS News, at the Retail Systems conference held this week in Chicago. The study pools responses from 122 retailers.

As a whole, survey respondents are fairly optimistic about 2004 IT budgets. The majority - 55% - plan to increase their budgets over 2003 levels; 33% expect budgets to remain flat; and 13% plan to decrease their budgets.

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Retailers have shed their reputation for being technology laggards and are funneling IT dollars to nearly all areas of their businesses, according to one Gartner analyst.

"The rate of technology adoption in the retail industry is accelerating," said Jeff Roster, principal analyst at Gartner. Retailers are transforming their operational systems, from supply chain and back-office applications to merchandising and in-store communications technologies, Roster said. "It's all hot," he said.

Roster presented the results of Gartner's annual Retail Technology Study, conducted in association with RIS News, at the Retail Systems conference held this week in Chicago. The study pools responses from 122 retailers.

As a whole, survey respondents are fairly optimistic about 2004 IT budgets. The majority - 55% - plan to increase their budgets over 2003 levels; 33% expect budgets to remain flat; and 13% plan to decrease their budgets.

Financial and human resource management are the top two applications slated for upgrade or new adoption within the next two years by survey respondents, Roster said.

Sarbanes-Oxley compliance is one factor fueling financial systems investments, he said. The Sarbanes-Oxley Act is financial reporting legislation passed in the wake of corporate accounting scandals at companies such as Enron and WorldCom.

The IT department at Wilsons Leather became involved in Sarbanes-Oxley compliance efforts at the end of 2003, said Jeff Orton, CIO of the Minneapolis retailer. "It's impacting my life," Orton said. His company's approach is to use the legislation's requirements - such as certifying financial reporting processes and the structure of internal audit controls - as a means to improve the way IT operates. Wilsons Leather already has reviewed about 60 of its major business processes, updating security and change controls along the way, Orton said.

Chico's has focused some of its technology resources on improving human resource management. The Fort Myers, Fla., apparel chain recently gave store personnel real-time Web access to the company's centrally-managed deployment of Lawson Software's human resources suite. This allows managers in remote store locations to input interview information online, conduct immediate background checks, and hire candidates on the spot, Chico's CIO Ajit Patel said.

"We can centrally manage the software, and at the same time distribute functionality to the stores so they can hire associates and put them into the system in real time," Patel said.

Both Chico's and Wilsons Leather advocate limiting customization of applications.

"I'm not a software house," Patel said. He opts for packaged software over in-house development whenever possible. The cost to maintain custom software and integrate it with other systems is too enormous, he said. "If you can find a solution that works, put it in vanilla," Patel recommended.

Orton agreed. "Strive for vanilla," he said. Lifecycle maintenance costs for customized software are just too high, he said.