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Fewer Retailers Are Increasing Tech Budgets

But digital transformation efforts are a major focus

Across all industries digital transformation is the order of the day, and tech investments are one method to bolster this. 

An RIS News and Gartner survey conducted in February found that 69% of retailers are planning to increase their IT budgets in 2018. That is actually down from last year (88%) but those that are upping budgets are doing so by a healthy margin. Around one-third plan to increase spending 1%-5% and roughly one-quarter by 5%-10%. 

More retailers are putting digital transformation plans into action. Last year, 15% characterized the stage they were in as “desiring” compared to 12% in 2018, and the number of those “designing” jumped to 36% in 2018 vs. 27% in 2017.  Some retailers have actually implemented such plans, but just 6% say they are at the point of harvesting results.

Personalization is an overarching theme for 2018, the study found. Close to half (47%) of retailers cited personalization/CRM as a top technology for this year, the leading response. 

This mirrors January research from Boston Retail Partners that reported the top customer engagement priority for 2018 was personalizing customer experience

In the RIS/Gartner survey, retailers expect CRM/personalization to decline as a priority two year from now, and they foresee going a step further with multi-channel behavioral segmentation (42%).

Digital transformation isn’t purely reliant on technology, however. For retailers, it requires merging channels and utilizing physical stores, as well as focusing on internal issues. Around one-third of retailers in the RIS study saw internal resistance to change (34%) and slow organizational response (33%) as the top obstacles over the next year and a half.