The economy may be stuttering but the local retail sector is showing no signs of slowing down when it comes to digital investment. According to new research from Frost & Sullivan, the retail sector, which was estimated at R5.75 billion in 2016, is forecast to record a compound annual growth rate of 1.7% to reach R6.11 billion come 2019.
Research shows that by the same year, ICT retail spend will reach roughly R1.8 billion on offerings such as cloud-based services, managed services and cellular connectivity.
According to the research house, some of the key services that are set to shape retail ICT spend strategies include:
- Cloud-based services boost overall flexibility
- Mobile workforce solutions increase efficiency
- Retail analytics focused on developing consumer/business strategies
- Stock and layout analytics to mitigate stock outage and stock layout challenges
Not only does this retail spend trend improve signal improvements in the experience stores offer their customers, it also presents strategic service providers with opportunities to better give retailers what they need.
Naila Govan-Vassen, digital transformation senior industry analyst at Frost & Sullivan, notes that while overall spend is on the up, ICT retail spend strategies have shifted from broad capital expenditure to smaller operational expenditure. Smart service providers will tap into this.
What do retailers want and how should service providers respond?
- Offer lower-priced solutions: Strategic service providers will come up with competitive usage- and value-based pricing models
- Embrace flexible service-level agreement (SLA) contracts: Given how rapidly the industry changes, no retailer can afford to be tied down by a restrictive SLA that prevents them from upscaling and downscaling as their needs change.
- Provide solutions to improve value chain: Consider what it takes to get products from distribution centres to suppliers, stores and finally to customers. Retailers need technology and analytics to effectively track and monitor these activities.
- Give guidance: Service providers must better engage with their clients. By increasing overall knowledge about their solutions, implementation will run as smoothly as possible.
- Develop bespoke solutions: For retailers that require something unique, service providers must create something special. Think solutions that enhance customer experience and enable, two-way omni-channel communication between customers and the retailer. And integrated systems that provide a single view of sales, inventory and customers.
For Govan-Vassen ICT service providers need to be business partners, rather than technology partners. At Nebula, we think of ourselves as strategic business partners, not just service providers. To find out more about Nebula and our offerings to help you manage and optimise your telecoms ICT environment, sign up for our monthly newsletter by completing the form below.