Recession-hit retailers fight back with online charm offensive

Depressed UK retailers are looking to exploit digital channels to tackle lower customer spending during the downturn.

According to a survey carried out by the British Retail Consortium (BRC) and software vendor SAP, around half (51 per cent) of respondents are looking at new channels to market - such as transactional websites - as a way of insulating their business from lower customer spending.

Retailers are also looking to update their existing digital channels in an effort to please customers.

The BRC report found the two most popular technologies being considered to improve customer service are web-based: enabling online ordering through their website (39 per cent), and having a 'click and collect facility' on their site (29 per cent).

The research also revealed that almost all the retailers polled (90 per cent) are planning to optimise their supply chain inventory to better control costs - meaning there is likely to be a focus on improving in-store organisation of limited stock.

Supermarket giant Asda, for example, is already looking to streamline its own online shopping business. The company recently announced it will be trialling a "dedicated home shopping centre concept" in Yorkshire this summer. At the facility, the Asda workers who pick the goods for online orders won't have to share the aisles with supermarket customers as they normally do.

A spokesman for the company told silicon.com: "Home shopping's been enormously successful [for us] and it's growing so we're looking at this as an option of catering for that extra demand. It may also help in areas where we don't have a big footprint of stores - so it allows people to experience Asda where there's no Asda store near them."

As well as helping retailers optimise inventory, technology is also being targeted to help optimise staff with 51 per cent of respondents saying they will optimise worker productivity by improving the management of tasks through automation.

Customer analytics - analysing customer data such as buying history and behaviour - is also a priority for retailers, identified by 57 per cent as the way they will try to understand their customers' needs better.

Speaking at an analyst and media event to launch the report, Christine Bardwell, retail technology analyst at Datamonitor, suggested future demand for customer analytics could fuel outsourcing in what can otherwise be an industry reluctant to outsource.

"I think [outsourcing's] going to grow from these areas of innovation… around customer analytics - retailers haven't got those kind of skills in-house, they haven't got that technology or the money to invest in it - so that's the sort of process they're going to need to outsource," she said.

For most retailers, however, the main IT priorities remain similar to those in other industries:

"Here is the perennial call for greater reliability and effectiveness. The CIO and IT director continue to have more demand from the business than budgets to satisfy it, and look for systems that will deliver the greatest return either in money, customer service or in the perception of the users," the research report states.

Asked how they expect the IT department to support them, the largest proportion (43 per cent) of respondents said making in-store systems more reliable and effective, followed by 37 per cent who said by helping the business innovate using existing assets.