Huge investments incoming
The approach of Tesco was supported by fellow panellist Brian Kalms, EMEA Retail Technology Lead at the AlixPartners consultancy which has run surveys in this area.
He agreed that an incremental approach to technology roll-outs – combining in-house and external expertise where needed to maximise value creation – is valid.
After all, it can be risky to run a comprehensive ‘rip and replace’ entire technology stack overhaul project, rather than encapsulate it as Tesco has done.
“There are huge investments in retail technology incoming,” said Kalms, as he explained how personalisation, AI, social media commerce and data will all cause money to be poured into ageing technology stacks in the near-term.
Retailers must overhaul their IT in a sensitive manner, however, as Tesco has done because as Kalms warned: “There is undoubtedly scar tissue out there in retailers’ systems [that must be navigated].”
Kalms cited Alixpartners’ 2024 Digital Disruption Executive Survey that polled 750 C-suite representatives across sectors in America and Europe to prove his point. A slide he shared from his consultancy showed that: “47% think their old IT is holding their growth expectations back.”
That compares to 96% of retailers, who deem their IT to be under control, expecting to see growth. Getting on top of your tech stack really does pay off.
The survey also showed that:
-
81% of retailers centre digital investment decisions in the tech team.
-
Only 69% across all industries do this, showing retailers are ahead of the curve in giving technologists their heads. Whether this is the best way to maximise RoI is debatable as C-suite oversight in decision-making is required as well.
Whatever approach they adopt – in-house or external – and however much they empower tech teams, the boardroom or a mixture of both, retailers must find a way to modernise their technology to fight off e-commerce rivals and thrive in an increasingly digitised customer environment.
Tesco offers up one blueprint. But each retailer must develop their own future technology strategy and stay atop of it.
