ICT spending within the retail sector in Australia is expected to reach AUD1,945.1 million (USD1.8 billion) in 2013, increasing to AUD2,022.5 million (USD1.9 billion) in 2016. This represents a compound annual growth rate (CAGR) of 1.2 percent for the forecast period.
Investment in telecommunications is projected to account for nearly half (43 percent) of retail sector spending on ICT in 2013, according to a report released by research firm IDC.
However, IDC forecasts that this will decrease over the forecast period, from AUD838.1 million (USD786.8 million) in 2011 to AUD734.5 million (USD689.6 million) by 2016, or a negative compound annual growth rate (CAGR) rate of -2.6 percent. Spending will then shift to software and services.
Currently, spending on telecommunications reflect the focus on payment solutions, employee productivity, logistics and day to day management of the businesses.
"While there are pockets of innovation within the retail sector – which are growing – we are really still seeing the focus of ICT spending being in support of the delivery of day to day operations," said Emilie Ditton, Head of AP Vertical Markets for IDC Australia.
Large transformational projects have been undertaken to create integrated omni-channel capabilities, but cost management related technology deployments are also priorities like – supply chain management, inventory management and investments relating to employee productivity e.g. enterprise mobility, wifi, and investments in tablets.
IDC expects to see investments in newer technology in the coming years, reflecting the changing patterns of retail such as the shift towards ICT investments to support omnichannel capabilities, where the retailer provides a seamless approach to the consumer through all available shopping channels, (mobile, internet, bricks-and-mortar).
"Some really exciting ICT led innovation is happening in the retail sector, particularly relating to the creation of mobile channel capabilities and investments in analytics capabilities that will enable the value of loyalty card data to drive product, pricing and promotional decisions. These areas of innovation and investment will continue to grow as Australian retailers seek to differentiate themselves from the competition," Ditton said.