White Paper

2014 Global Agenda of Retail CIOs

Forrester Consulting Thought Leadership Study Commissioned by TCS

 

A TCS study shows that retail CIOs are primed to lead the innovation agenda.

 

In an era of digital Darwinism and evolving consumer behavior, there is a critical need for retail CIOs to transition from a focus on the ‘back office’ to driving innovation as C-level strategists, according to the findings from the study titled ‘The Global Agenda Of Retail CIOs.’


How are retail CIOs reacting to disruptive technologies?In 2013, TCS commissioned Forrester Consulting for a study on ’The Global Agenda of Retail CIOs,’ to evaluate the state of IT within the global retail industry and CIOs’ attitudes and plans toward key trends and ever-more disruptive, challenging technologies. In-depth interviews with senior business and IT executives of 192 global retailers revealed that the potential for CIOs to embrace disruptive technologies are too often hampered by a lack of key resources and business alignment. This is illustrated through the fact that almost two thirds (64 percent) of global retailers consider cost reduction as a major focus over the next few years, versus only two fifths (38 percent) citing innovation. 

This study yielded some important findings:

Retail business executives’ core priorities remain revenue growth – with 87 percent listing it as a top priority - underpinned by multichannel integration and digital customer engagement. Retail CIOs believe that the disruptive technologies of mobility, social media, cloud and Big Data will continue to radically transform the retail industry status quo, yet they are not staffed or structured adequately to take full advantage.

Mobile: At the forefront of innovation that will continue to disrupt retail over the next years

  • CIOs plan to rapidly implement an array of mobile technologies, with context-aware tech (32 percent), mobile payments (28 percent), digital signage (24 percent), and mobile POS (22 percent) leading the way. 
  • Retail CIOs in the United Kingdom are global leaders in having already implemented some form of mobile payments (73 percent), while German retailers interestingly buck the global trend, with 60 percent having no mobile plans at all. 
  • Perhaps with an eye toward further improving customer service and logistics, six out of ten (59 percent) retailers plan to invest in mobile-enabling their partners and vendors over the next three to five years.

Cloud: Frees up IT teams from traditional core functions to allow greater innovation

  • While 41 percent of retail CIOs currently use Software-as-a-Service (SaaS) for back-office functions such as supply chain and product life cycle management or ERP, more than half (52 percent) intend to do so over the next five years.

Big Data: Not yet being used to its full potential to drive actionable insights

  • Almost seven out of ten (68 percent) retail CIOs report that they collect data, but agree they are not maximizing its full value.
  • Only 47 percent have invested in cross-channel analytics - a critical enabling technology for deriving multichannel insights and enhancing the company’s ability to reach consumers effectively through their channel of choice.
  • Additionally, only a fourth (25 percent) of the retailers have plans to invest in Big Data analytics to support customer service.

Social: Looking to expand the reach and application of social media intelligence

  • Perhaps not surprisingly, eight out of ten (80 percent) retail CIOs leverage social media for sales and marketing, with customer service and recruitment the next most common functions.
  • However, almost half (46 percent) of retailers plan to link social insights to R&D and product design during the next three to five years – unlocking customer-centric product designs.
  • Canadian firms are far ahead of other countries/regions, with 67 percent already leveraging social media for R&D.

Talent Shortage: Lack of technical skills a key obstacle in implementing critical technology strategies

  • Almost seven out of ten (67 percent) retailers surveyed consider attracting and retaining talent, a critically important challenge over the next three to five years.
  • In the area of mobility in particular, a third (34 percent) report struggling to obtain the necessary talent.
  • Similarly, four out ten CIOs turn to SaaS solutions (39 percent) and are compelled to leverage external partners with emerging mobile expertise (equally 39 percent) to support internal teams as they build mobile strategies and applications.
        

CIOs can radically reimagine the retail value chain by driving deep multichannel integration and developing a customer-centric operating model that delivers next-generation, digitally enhanced customer experience. To achieve this, retail CIOs are well positioned to tap the enterprise-wide perspective that empowers them to overcome operational silos and become true change-agents using disruptive digital technologies to innovate and drive business growth.

About the Study: The Global Agenda of Retail CIOs:
In October 2013, TCS commissioned Forrester Consulting to evaluate the state of IT within the global retail industry and assess CIOs’ attitudes and plans toward key trends and technologies. By conducting in-depth surveys and interviews with 192 senior business and IT executives at global retailers, Forrester examined retail CIOs’ agendas to identify their key priorities and investments for 2014 and beyond.