Retailers to spend $832m on telecommunications: IDC

Total ICT spending will reach $1,945.1 million this year, says IDC

The Australian retail sector is set to spend $832.3 million on telecommunications this year as companies invest in payment systems and supply chain management, according to a new IDC report.

The report, entitled Business Strategy: Technology and Retail Trends Shaping Australian Retailing – Australian Retail ICT Market 2011-2016, found that telco spending is supporting the day-to-day management of retail businesses.

IDC Australia head of vertical markets Emilie Ditton said that cost management related technology deployments are still the order of the day. For example, retailers are investing in inventory management and employee productivity such as Wi-Fi and tablets.

However, Ditton said that telecommunications investment will decrease over the forecast period from $838.1 million in 2011 to $734.5 million by 2016.

“This reflects the shift in spending for the Australian retail sector from telecommunications to software and services,” she said in a statement.

Total ICT spend by retailers is forecast to reach $1,945.1 million in 2013 and will increase to $2,022.5 million by 2016, a compound annual growth rate (CAGR) of 1.2 per cent.

According to Ditton, retailers will start investing more in omni-channel capabilities across mobile, the Internet and physical stores.

"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 that will enable the value of loyalty card data to drive product, pricing and promotional decisions,” she said.

“These areas of innovation and investment will continue to grow as Australian retailers seek to differentiate themselves from the competition.”

Follow Hamish Barwick on Twitter: @HamishBarwick

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