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Is Mobile Commerce the Driver Behind Increasing Retail IT Budgets?

A mobile phone can now also be a retail POS device

Mobility, which includes mobile commerce, is taking over the wheel in terms of driving up retailers’ IT budgets. As the hub for IT investments, mobility moves “the spokes” of essential business functions — point-of-sale (POS), loyalty programs and more.

That’s one of the findings in a recent report highlighted in an article on the Retail Info Systems News website. Technology Business Research, which conducted the report, interviewed IT and company executives nationwide to gain insight into the biggest drivers of IT budgets.

Here’s a roundup of the report’s key findings.

  1. Company executives say their IT investment in mobile commerce developments is being driven by growth in consumer confidence, e-commerce and the use of mobile technologies. These external forces are driving retailers to make these investments because they don’t want to fall behind their competitors.
  2. Working with “aging packaged or in-house software” is among the biggest internal forces that concern company executives. That’s why now is the right time for retailers to make an investment in new systems.
  3. The top-three IT budget spending areas are infrastructure (24 percent, or $7.4 billion, of company budgets), professional services (14 percent, or $4.3 billion) and business applications (13 percent, or $3.9 billion). Services ranked above what the applications cost. The reason is that these systems are so advanced. They’re highly configurable with many capabilities. Most users can’t set the system up on their own for tasks like replenishment logics, deals/promotions and adding data to transactions. You have to spend money to use the tool correctly and derive the benefits you envisioned when the tool was being demonstrated; just buying the tool will not be enough.

Mobile commerce can impact retailers in many ways. They can put mobile solutions in the hands of a customer to reinforce or add value to a loyalty program. For store personnel, a mobile application provides another way to get information about products or completing the POS transaction. And in the warehouse, mobility offers more flexibility in moving and counting inventory. Nobody wants to be tied down to a desktop/fixed lane retail management system.

However, while everyone wants mobile retail POS, it’s still a bit out of reach for most retailers. That’s because the technology remains expensive. You have to be in the right place at the right time or have a big development budget to make it work in your environment, but it’ll become more mainstream in the next few years as POS vendors develop and integrate more cost-effective mobile solutions to their retail ERP offerings.

Source: Retail Info Systems News, February 2013