Ashfords LLP research reveals data security threats and the need for innovation drives the demand for closer relationships with tech suppliers.
Despite widespread awareness of the need for improved technology, nearly half of UK retailers (48%) say they don’t fully understand what their customers want and are unclear of how to provide it, causing them to rely more on their tech suppliers. This insight comes from new research by Ashfords LLP, a leading UK law firm.
The research, which surveyed over 250 retailers and technology providers as part of the Technology in Retail: Retail Re-imagined report, reveals voids in both insight and innovation, caused in part by a lack of collaboration between retailers and technology suppliers. 42% of tech suppliers worry they are not working towards the same objectives as retailers, meaning they are unable to ensure their investment is aligned with providing the best service.
However, 64% of retailers say that they are optimistic about their growth potential over the next twelve months. Four in five retailers (82%) believe that they will have a far more collaborative relationship with their tech suppliers by 2025, ensuring the development of better, more customer centric technologies.
But the future will also present challenges, such as concerns regarding data production, something that both retailers and technology suppliers are acutely aware of. The majority of tech suppliers have seen retailers’ levels of concern over regulation / compliance (72%) and data security (70%) increase over the last two years. Concerns have also led to 34% of retailers demanding shared risk arrangements with their tech providers, in preparation for possible future rule changes.
Louise Workman, Head of Retail at Ashfords said, “The good news is that retailers recognise that challenges are looming, and not only in ensuring technology keeps up with competitors and changing demand, the legal and regulatory hurdles of handling increasing amounts of customer data are significant. Retailers and tech suppliers both are positive about their future prospects, but will have to pool resources and ensure they are prepared to thrive in a rapidly changing and fluid environment.”
Addressing the innovation void – Technology suppliers under pressure
Providers of technology to retailers face specific pressures in meeting their retail partners’ demands, particularly the need for a greater range of products and services (46%) and more innovation / creative thinking (44%). Tech suppliers are being compelled to provide timely, accurate and insightful consultation on the latest retail trends, particularly in relation to mobile payments (41%), big data (42%) and wearable tech (30%).
The demand for constant upgrades has led some retailers to take a more proactive role in sourcing new technologies. Three in five (60%) are pursuing in-house technology development and more than half are creating their own ‘innovation labs’ (55%).
However, retailers and providers are coming to realise that closer collaboration will be needed to keep up with the pace of innovation and in meeting customer demands. Just under half (45%) are creating ‘innovation partnerships’ to support their technology partners, and around the same number (51%) setting are up retail conferences / communities.
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