Retail Sector Technology Adoption Trends

Research Briefing | July 16, 2012

Why | What | How Much | Where

The Retail Sector: Then

1998 SalesWal-Mart $118.0

billion

Sears

$41.5 billion

Kmart $32.2

billion

Amazon $0.65

billion

1998 Household Ownership

Computer 42%

Cell phone 36%

Internet 26%

1998 PaymentsCash and checks account for 70% - 75% of customer transactions

The Retail Sector: Now

More Options

More Information

More Moving Parts

What’s Keeping Retailers Awake at Night?

Finding/implementing more effective marketing strategies

Reducing costs/overhead

Improving staff productivity and capabilities

Better leveraging technology to improve customer engagement and sales efficiency

Need to enhance or refresh product lines

1

2

3

4

5

Top 5 Priorities

What is Showrooming?

Showrooming: the practice of consumers visiting a physical retail store to assess a product (aka visiting a showroom) before making the purchase online to get the lowest possible price.

A NET 42% of retailers express concern about the growing practice of showrooming

Rating of Importance Today The Conundrum

• Despite growing importance, the majority of retailers acknowledge the need for improvement in utilizing technology.

• As a sector, retail spends relatively less on technology compared to other industries such as finance or media/entertainment. That may be changing slightly though…

• The retailers in this study indicate they plan to increase their spending on IT by an average of 4.2% year on year.

21%37%

0.36

NET Unimportant

NET Important

Neutral

Very Important

Important

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Importance of Technology to Retailer Success Trends Upward, But…

Technologies in Place at Retailers OverallMicro

RetailersSmall

RetailersMedium Retailers

Large Retailers

Desktop or laptop PC 93% 92% 92% 95% 92%

Multi-function Printer 82% 83% 81% 80% 85%

Broadband (aka high speed Internet) 72% 70% 77% 71% 67%

Data back-up (on-site or online) 67% 56% 73% 66% 78%

Network (LAN, WAN) 59% 40% 62% 66% 85%

WiFi 57% 57% 54% 54% 66%

Smartphone 56% 51% 55% 57% 64%

Inventory management system or application 53% 31% 59% 62% 74%

Customer relationship management (CRM) system or application 34% 17% 35% 45% 59%

Tablet (e.g. iPad, Playbook, etc.) 32% 23% 30% 45% 46%

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Micro retailers = 1-9 staffSmall retailers= 10-99 staffMedium retailers = 100-499 staffLarge retailers = 500+ staff

Covering the IT Basics [Before the Fun Stuff]

And Now for the Fun Stuff

Retailers Begin to Experiment with Digital Signage

Digital Signage Usage and Intent to Adopt OverallMicro

RetailersSmall

RetailersMedium Retailers

Large Retailers

Currently using digital signage in some way 33% 22% 34% 37% 53%

No, but plan to implement soon 22% 13% 27% 34% 22%

No, and no immediate plans to adopt 40% 63% 36% 23% 18%

Don't know 4% 2% 3% 6% 7%

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Micro retailers = 1-9 staffSmall retailers= 10-99 staffMedium retailers = 100-499 staffLarge retailers = 500+ staff

Retailer Interest in Digital Signage Uses/Capabilities

% Digital Signage Use or Capability

71% Sales or promotional announcements

46% Photo display (e.g. images of customers using various products)

38% Custom videos (e.g. tutorials, advice, customer testimonials, etc.)

35% Internet connectivity to display things such as your business website, Facebook, YouTube or other online content

31% Real-time product info (e.g. inventory quantities, product shipment dates, etc.)

30% Entertainment (e.g. TV or movie) to keep kids or others occupied while parents shop

30% Touch screen display that allows customers to directly engage with the display

25% Product reviews from customers or third parties (e.g. Consumer Reports, Amazon, etc.)

18% App-enabled (could run apps on the display similar to apps found on tablets or smartphones)

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Mobile checkout via payment-enabled smartphones or tablets

Self-service, in-store kiosk

Direct sales via a third party website, i.e. eBay, Amazon, Etsy

Alternative POS payment processing, i.e. Square, PayPal

Accept orders via website_x000d_ that are processed offline

Direct sales via own website, using online processing and payment

19%

15%

15%

17%

18%

20%

13%

19%

24%

30%

45%

47%

Currently In Place

Plan to Deploy/ Adopt

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Many Retailers Still in the Process of Embracing E-Commerce & Emerging Payment Technologies

Social coupon initiative,_x000d_e.g. Groupon

Geo-location initiative,_x000d_ e.g. Foursquare

QR codes used in_x000d_ marketing material

Blog geared towards_x000d_ customer engagement

Digital customer loyalty_x000d_ program (app-based)

Email-based marketing campaigns

Facebook page geared toward customer engagement

24%

28%

26%

23%

27%

20%

15%

18%

21%

25%

30%

31%

62%

65%

Currently Utilizing

Planning to Use

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Retailers Rely Heavily on Email and Facebook for Customer Engagement

Incidence of Use

42%

37%

21%

Yes, currently using

No, but planning to start using

No, and no immediate

plans to start using

58% Email marketing campaign effectiveness

55% Optimizing inventory replenishment

54% Merchandising optimization (e.g. store

layout)

54% Customer profiling and purchase patterns

50% Forecasting

46% Website traffic patterns

46% Social media monitoring

45% Smart recommendations

42% Optimizing markdowns and discounts

Areas of Interest in Applying Data Analytics / BI Tools

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Data Analytics and Business Intelligence Tools Change the Retailer-Customer Relationship

Connecting the Dots: The Role of IT Solution Providers

IT Purchase Channels OverallMicro

RetailersSmall

RetailersMedium Retailers

Large Retailers

Local electronics/computer retailer (e.g. Best Buy, Office Depot, Apple Store, Verizon Store, etc.) 43% 57% 50% 30% 13%

Direct from an IT hardware or software vendor(e.g. Dell, Salesforce.com, Oracle, IBM, etc.) 31% 19% 29% 44% 49%

Online electronics/computer retailer (e.g. Amazon, CDW, etc.) 28% 36% 28% 28% 15%

Purchased through an IT solution provider, VAR or tech consultant 22% 10% 24% 39% 32%

Local general retailer (e.g. Wal-Mart, Target, etc.) 22% 27% 20% 20% 18%

Purchased through a business consultant 11% 10% 11% 9% 13%

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

Where Retailers Purchase IT Products

Cloud computing initiative

Audio/Video related

Mobile app development

Telecom or communications related

Cybersecurity related

General IT consulting / advisory services

Deployment, installation or_x000d_ integration of IT systems

Web design

Repair or troubleshooting IT problems

7%

13%

14%

19%

23%

29%

40%

48%

74%

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 192 U.S. retailers that use IT solution providers (aka outsource IT functions)

Among retailers that do NOT outsource any IT work, the #1 reason for not doing so is satisfaction with their current in-house arrangement.

Types of IT Services Retailers Have UtilizedPast 12 months

Rating of Interest in the Concept of Managed IT Services

17%

28%

18%

0.23

0.08

NET Uninterested

NET Interest

Neutral

Very Interested

Interested

Source: CompTIA’s Retailer Technology Adoption Trends studyBase: 500 U.S. retailers

1. Consistent and reliable IT operations

2. Lower total IT costs

3. More technical expertise

4. Better security / loss prevention

5. Proactive approach to IT fixes, maintenance, etc.

6. Greater staff productivity due to less IT downtime

7. Greater capacity to manage peak busy times (e.g. holiday season)

Aspects of Managed IT Services Most Appealing to Retailers

26%

40%

Managed Services Meet Retailers’ Need for More Consistent and Reliable IT Operations

Reminders

The full report can be found in the member-only area of CompTIA.org (aka MRC)http://www.comptia.org/members/research/allreports/RetailSectorTechAdoption.aspx

Solution provider members can share the report with their retail customers or prospects as a means to facilitate ‘trusted advisor’ discussions

Vendor and distributor members may share the report with their channel partners (note: as long as they do not post it openly on a public website)

Beyond members, feel free to share the report with prospects, partners or other strategic stakeholders. Research is meant to be shared!

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ptia

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