This Research Preview offers an early look at research from our forthcoming report, Retail Challenges Boost Edge Technology Investment. The full report presents proprietary survey findings from Coresight Research on critical business pain points impacting net revenue as well as retailers’ near-term technology investment plans. The distribution of next-generation technology investment reveals technology’s crucial role in optimizing the future store, underlining retailers’ need for investment in proper multi-cloud infrastructure to support this additional computing power.

The full report is sponsored by VMware, an industry leader in muti-cloud services and infrastructure.

Retail Challenges Boost Edge Technology Investment: Research Preview

Retailers’ Near-Term Technology Investment Plans

Despite the host of headwinds that retailers are facing in a challenging macroeconomic environment, our survey findings reveal that over the next three years, more than two-thirds (68%) of US-based retailers plan to increase technology spending (see Figure 1). As consumers continue to return to brick-and-mortar stores, we believe that IT spending is likely to remain high: physical retailers will increasingly look to build out more experiential and tech-enabled experiences.

In addition to addressing changing consumption patterns, we believe that strong technology investment plans indicate that retailers are turning to technology solutions to address a wide range of business pain points that impact net revenue.

Figure 1. US Retailers’ Plans for Technology Investment over the Next Three Years Compared to Now (% of Respondents)

Critical Pain Points Impacting Retailers’ Net Revenue

Our survey analysis revealed the impact of five major business aspects on net revenue: safety and security, business insights, operational efficiency, associate empowerment and customer engagement.

As shown in Figure 2, nearly half of respondents ranked security and safety first or second, indicating that, on average, this category is perceived as having the biggest impact on net revenue. However, overall, we think that the close rankings of categories likely reveal that retailers are experiencing meaningful pain points across their businesses. Coupled with retailers’ strong IT spending intentions, this suggests that retailers are pursuing an infrastructure-level approach to maximizing revenue through technology implementation across business units.

Figure 2. Five Business Categories: Potential Impact on Net Revenue (% of Respondents)

In addition to the obvious benefits of such large-scale technology implementation, it does pose challenges, including high costs, bandwidth limitations and high latency. Therefore, to increase flexibility and efficiency, retailers can invest in multi-cloud infrastructure, especially edge technologies, to support the integrated and seamless operation of tech across the business.

Our Upcoming Research

Read Coresight Research and VMware’s full report on retail technology investment to access our analysis of over 30 specific pain points across retailers’ businesses. In addition, explore retailers’ technology adoption of more than 15 specific technologies and gain insight into how these technologies can play a role in optimizing the future store.

Methodology

In November 2022, Coresight Research conducted a survey of 200 US-based IT decision makers at retail companies with at least 50 consumer retail locations and which spend at least $100,000 on IT solutions per year. Respondents represented companies across retail, apart from wholesale club, business services/office supplies or auto parts businesses.