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IT faces seasonal test R

ecent rapid developments around mobile and digital technologies have driven unprecedented change in consumer

shopping habits, leading many retailers to invest in updating IT systems and introducing new back office or customer-facing IT innovations and keep pace with demand in time for Christmas. As usual, these investments have provided Retail

Technology with plenty of examples to highlight in the magazine and on, with this November/December issue being no exception. New Look’s radical digital instore redesign (page 9) or the mobile payments innovation from PayPal and PizzaExpress (page 26) are just a couple of examples, along with our in-depth annual look at ‘back office’ and ‘hospitality’ developments. Throughout the year, the likes of John Lewis

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(Retail Technology July/August issue), the Co-op (September/October issue) and even smaller firms Cath Kidston and Krispy Kreme (May/ June issue) have all demonstrated how new and strategic IT investment can deliver a crucial competitive advantage. During what has been another tough year, this evidence of a loosening in retail IT’s purse strings casts current market indicators in a more positive spotlight going into this key trading season. For example, November heralded another improvement in retail footfall levels, according to Ipsos Retail Performance. The Retail Traffic Index (RTI), the longest standing metric of shopper numbers in the UK, recorded a marginal decline of 0.4% against November 2011, far stronger than the 3% deficit in October. Month-on-month, the RTI saw a 2.6% increase across the country. Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance, commented: “This marks a significant step forward, building a belief that the worst is now behind us and that the ‘new normal’ has arrived.” But he warned that, in order to capitalise on any upturn, retailers will need to be on their mettle, able to respond quickly and decisively to competitive action and pricing initiatives. “Stock levels will be smaller than previous years, so on best-selling lines the brave-hearted might decide not to push the discount button and instead be prepared to gamble that demand will exceed supply,” he added. With a large proportion of many retailers’

Member of the Audit Bureau of Circulations 6,749 Jan 11 – Dec 11

ISSN No 1359-0146

revenue earned in the run up to Christmas and during the January sales, investments in every operational area, including the supply chain, store and online, will now be facing their stiffest tests, where the most savvy in the industry will really be able to make their IT pay.

Online shopping, as a source of much IT spending in the last few months, is likely to continue to offer a retail boost, with £4.6bn predicted by the IMRG Capgemini e-Retail Sales Index to be spent over the first two weeks of December – 15% up on the same period last year. This means retailers must meet what has become perennial challenge: to convert this Christmas rush into loyal and lucrative custom well into the next year. E-commerce, multichannel, supply chain and fulfilment systems will need to perform at optimal levels to maximise this opportunity. Looking ahead to 2013, the challenges faced

by retailers are unlikely to diminish, given the fact that the Chancellor just confirmed the economic outlook is unlikely to improve anytime soon. Rupert Eastell, head of retail at accountancy Baker Tilly, said: “There is understandable anger from retailers at the Chancellor’s failure to delay or cancel the planned 2.6% rise in business rates which come into force in April 2013.” With a situation that leaves retailers so little room for manoeuvre, a clear emphasis on the strategic use of IT to stimulate growth will continue to be a high priority. This is why passing this seasonal test is all the more important for retail IT systems this year. Without IT’s support, retailers are unlikely to flourish next year. In the meantime, everyone here at Retail

Technology is wishing you a peaceful and merry Christmas, as well as a very happy and, of course, prosperous New Year.

Miya Knights Editor

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