IT Challenges in the Retail Industry

Time was not long ago that analysts were predicting the demise of the 'brick and mortar' store in favor of online merchandising. However, as web-based purchasing dropped and flattened last year, the retail sector went 'back to basics' with a focus on tried and true concepts like consumer loyalty and inventory control. Some of the information technology trends that support this movement includes:

RFID for inventory control and tracking

Automation of data on customer behavior for loyalty programs

Experienced based differentiation that collects data from the storefront as well as the internet to create customized buying experiences

Upgrade of old and ailing POS (point-of-sale) systems

Customer 'self check-out' technology

Centralized organization of data with decentralized distribution of data to the point-of-sale

SOA (Service Oriented Architectures) as a solution for crossing application boundaries

Dramatic pressures will be placed on IT infrastructure to upgrade and integrate legacy applications (POS, warehouse management and order management and fulfillment) with newer technologies that support '360 degree' views of customers and their buying behavior, across physical and cyberspace locations. Other trends in store automation will also require implementation and integration, such as 'self check-out' 'self-service kiosks' and upgraded customer experiences using new emerging technologies, such as Bluetooth interfaces.

These trends all present great opportunities for the retailer, but only for those in a position to exploit the new bonanza of consumer data with a robust and integrated IT infrastructure and good analytic capabilities. Most importantly, underpinning IT organizations will need to align processes, procedures, technologies and personnel with these challenging business initiatives in order to deliver on the promise of improved customer experience.

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