Did The Holiday Season Boost Profits For Retail IT Companies?
It has been a few months since the last holiday season, can you recall the holiday rush? How did you shop last Christmas? Just like people around the world, you probably overspent and you just realize it now. If you're a mere consumer, you benefitted from enjoying yourself and buying something you deserve. But for the retail IT department, they enjoyed the increase in profits more.
You read it right, the retail IT department got their hands on profits through higher holiday sales last holiday season. What made them capable to join the race? IT budgets grew 3 to 5 percent since 2011 and retailers had a 5 percent increase in their budgets. According to Gartner's 2012 Retail Tech Trends Study, this is a triple increase in the budget.
The increase in the budgets for retail IT projects is due to retail IT companies taking more control about earning revenues. Instead of just taking the back seat all the time, now, they want to enter the picture. Through this increase in budgets, retail IT departments can enjoy more success in earning profits and a better return on investments. But of course, retailers should take caution when investing in IT projects.
* Mobile shopping has boomed in the last years. With the explosion of Smartphones, consumers find it more convenient to shop from their mobile phones. Many retailers were not prepared for this which led to the pressure of upgrading their e-commerce platforms immediately. The upgrade is necessary but retailers should be careful about the upgrading prices.
The decision for the upgrade should be thought about thoroughly. Retailers should search for upgrade packages that have fair market prices and this will continue to affect the budget in the next years.
* With mobile shopping, retailers are forced to pay for wireless and data networking. But due to the pressure, retailers are overspending by 20 to 50 percent which is huge.
While it is imperative that retailers have their own wireless and data networking, retailers can lower down this percentage. Retailers should look into vendor-lock ins, incentives and monthly usage. There's no reason to overspend on something retailers will not be using.
* Retailers may rush into paying for cloud hosting and computing. Rushing their decision results to not being able to get the best pricing model appropriate for their business. Because of this, retailers are trapped paying annual costs, portability limitations and vendor lock-ins which will affect their budget in the next years when cheaper models come out.
Making retail IT investments is a must but retailers should be smart about it. It cannot be reiterated more how important making budget decisions are today.
You read it right, the retail IT department got their hands on profits through higher holiday sales last holiday season. What made them capable to join the race? IT budgets grew 3 to 5 percent since 2011 and retailers had a 5 percent increase in their budgets. According to Gartner's 2012 Retail Tech Trends Study, this is a triple increase in the budget.
The increase in the budgets for retail IT projects is due to retail IT companies taking more control about earning revenues. Instead of just taking the back seat all the time, now, they want to enter the picture. Through this increase in budgets, retail IT departments can enjoy more success in earning profits and a better return on investments. But of course, retailers should take caution when investing in IT projects.
* Mobile shopping has boomed in the last years. With the explosion of Smartphones, consumers find it more convenient to shop from their mobile phones. Many retailers were not prepared for this which led to the pressure of upgrading their e-commerce platforms immediately. The upgrade is necessary but retailers should be careful about the upgrading prices.
The decision for the upgrade should be thought about thoroughly. Retailers should search for upgrade packages that have fair market prices and this will continue to affect the budget in the next years.
* With mobile shopping, retailers are forced to pay for wireless and data networking. But due to the pressure, retailers are overspending by 20 to 50 percent which is huge.
While it is imperative that retailers have their own wireless and data networking, retailers can lower down this percentage. Retailers should look into vendor-lock ins, incentives and monthly usage. There's no reason to overspend on something retailers will not be using.
* Retailers may rush into paying for cloud hosting and computing. Rushing their decision results to not being able to get the best pricing model appropriate for their business. Because of this, retailers are trapped paying annual costs, portability limitations and vendor lock-ins which will affect their budget in the next years when cheaper models come out.
Making retail IT investments is a must but retailers should be smart about it. It cannot be reiterated more how important making budget decisions are today.
About the Author:
Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about IT expense reduction solution consulting
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