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Market Study:12th Annual IHL/RIS News Study Retail 2018 - Retail TransformedAnalystsLee Holman,Greg Buzek
Publication Date: January 28, 2015
About IHL Group
Who We AreIHL Group is a global research and advisory firm specializing in technologies for the retailand hospitality industries. The company, based in Franklin, Tenn., generates timely datareports, offers advisory services and serves as the leading retail technology spokespersonfor industry and vendor events.
What We DoIHL provides customized business intelligence for retailers and retail technology vendors,with particular expertise in supply chain and store level systems. Our customers are retailersand retail technology providers who want to better understand what is going on in the overalltechnology market, or wish to identify specific equipment needs for the retail market.
When We StartedGreg Buzek served as Product Development Manager for two Fortune 500 retail technologysuppliers for 6 years. Faced with making recommendations to senior management withspotty reports stuffed with technical jargon and unsubstantiated data, in 1996 he left toform IHL Group as an arms length consulting firm that delivers exacting research to corporatemanagers.
How We WorkReliable market analysis is essential for corporations to accelerate revenue and expand theirmarket share. Most research providers do not disclose data sources or statistically defend thevalidity of their assumptions. We do. We disclose in precise detail exactly how and why wereached our conclusions so that our customers can be comfortable with the data they are using.
What We KnowOur associates and advisors have over 100 years combined years of retail technology experience.Our associates have worked as product managers, sales representatives and executives in theretail market. We have the relationships, tools, and experience to meet your research andconsulting needs.
1064 Cedarview Lane | Franklin, TN 37067 | Phone +1 615-591-2955 | www.ihlservices.com
© Copyright 2015 IHL Group – All Rights Reserved. www.ihlservices.com 3
Retail 2018 – Retail Transformed
Table of Contents
Introduction 5 5
Store Growth / IT Spend - Things Looking Up 6
Deployment Timelines - Technology Disconnect 13
Top Store Priorities 16
All Things Omnichannel 19
Distributed Order Management Takes Over 23
Mobile - Are We There Yet? 25
Store Systems - Traditional Spending Takes A Hit 36
POS Software Vendors - Who Has Momentum? 41
Beacons, Analytics, Data Visualization - Our Future View 49
Payments and Security - EMV Realities 52
Methodology 57
© Copyright 2015 IHL Group – All Rights Reserved. www.ihlservices.com 4
Retail 2018 – Retail Transformed
List of Figures Figure 1 - Store Growth 8
Figure 2 - IT Hiring Growth 9
Figure 3 - IT Spend by Retailer Annual Revenue 10
Figure 4 - IT Spend by Segment 11
Figure 5 - Strongest Areas of Spend 12
Figure 6 - How Long from Decision to Stores? 15
Figure 7 - Top Store Priorities 17
Figure 8 - Priorities by Segment 18
Figure 9 - Omnichannel Adoption Timeframe 21
Figure 10 - Omnichannel Stumbling Blocks 22
Figure 11 - Rise of Distributed Order Management 25
Figure 12 - Mobile Platforms 28
Figure 13 - Mobile Functions 29
Figure 14 - Mobile Store Technology 30
Figure 15 - Mobile POS Hardware Plans 31
Figure 16 - Mobile POS Software Plans 32
Figure 17 - Mobile POS Software Vendors - FDC 33
Figure 18 - Mobile POS Software Vendors - GMS 34
Figure 19 - Tablet Plans for Managers and Associates 35
Figure 20 - Store Systems 38
Figure 21 - POS Hardware Plans 39
Figure 22 - Digital Signage Plans 40
Figure 23 - Traditional POS SW Plans 43
Figure 24 - POS Software Plans 44
Figure 25 - POS Software Vendors - FDC 45
Figure 26 - POS Software Vendors - GMS 46
Figure 27 - Top 8 POS SW Vendors by Retail Tier 47
Figure 28 - POS SW Vendor Share in Next 12 Months 48
Figure 29 - Emerging Technologies 51
Figure 30 - Apple is Up-and-Coming 54
Figure 31 - Security Measures 55
Figure 32 - Payment Terminal Plans 56
Figure 33 - Who Responded? 58
Figure 34 - Titles / Positions 59
Figure 35 - Revenues 60
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Retail 2018 – Retail Transformed
1.0 INTRODUCTION
1.1 Background and Objectives
For the twelfth consecutive year, we are again pleased to bring you Retail 2018: Retail
Transformed - 12th Annual Store Systems Study with RIS News. Each year RIS News, in
conjunction with IHL Group, conducts a retail technology trends study to review the
areas of technologies in which retailers are investing their IT budgets. This study
consists of a) a survey which is sent to hundreds of retailers throughout North America,
b) the analysis of the resulting data, and c) the reporting of the findings.
We should note up front that this document is very data intensive. We have attempted
to break down the results in enough detail that most of our readers will be able to get
right to the most pressing issues of the survey in a quick and easily reference-able
fashion. Among the 50+ pages are dozens of charts and graphs to provide you with the
information you need in a concise format.
In this year’s study 65% of the responses came from retailers with more than $1 billion;
retailers such as GAP, Toys R Us, Autozone, Sears, Target, Boscovs and Walgreens. Of
those, 30 had revenues in excess of $5 billion. As we have said before, we value every
response, but the fact remains that these large retailers drive total IT spend as well as
technology proliferation, while smaller retailers emulate their larger cousins in
implementations. The fact that there were more responses from the smaller retailers this
year is encouraging, and would seem to indicate that these retailers are making moves
to wring every advantage out of their retail technology decisions.
The Tier 2 retailers (annual revenue in the range between $500 million - $1 Billion) were
well represented and had approximately the same participation numbers from last year.
The smallest retailers (Tier III, less than $500 Million in annual revenues) showed a
sharp decline from last year. These smaller retailers tend to be forward-thinking, with
excellent financial results that stem from their view of technology as a means to drive
store execution and deliver a superior customer experience. They are also often growing
very fast due to the availability of the US mall structure.
Approximately 70% of the survey respondents indicated that their job responsibilities
were IT-related, with the most common position/title being that of IT Director/Manager
(37%). In second place were those who listed themselves as CIO/CTO/VP of MIS (26%).
Another 11% indicated that they were C- or VP-level executives. As with previous
studies, we are confident in looking at the results contained herein as being from those
who are “in the know,” have the necessary insight into operational plans, and from
those who are able to provide the most up-to-date perspective available.
© Copyright 2015 IHL Group – All Rights Reserved. www.ihlservices.com 6
Retail 2018 – Retail Transformed
Our hope is that this document will be a reference tool that you use throughout the year
as you look to make new spending decisions. If you are a retailer, we are confident that
you will find plenty of data that will help you support your decisions in terms of how
other retailers of your size and vertical segment have responded. If you are a vendor,
this data provides tremendous detail in terms of retailers’ purchase intentions and will
either validate or challenge some of your initiatives.
1.2 How to Interpret the Study
Before you start reading these results we want to offer you some direction. First, please
understand that in contrast to our standard report format (which typically contains
more textual explanation of the results), this study instead offers mostly charts and
bullet points addressing the findings. As such we recommend that you print the survey
to go along with the report. You can see the original questions at this link.
Second, although we talk about percentages of interest in things like POS Scanners,
desires for certain new technologies, lack of interest in others, keep in mind that this is a
purchase intention study – not a market share study. And although there is a temptation
to equate purchase intention with future market share, this would be an erroneous use
of the data. There are many other factors that must be considered such as # of store
locations, # of POS units, and whether all stores will be replaced that would have to be
weighted to get a true market share document.
Third, we are not naïve in our view of the market and the realization that a significant
factor in any purchase decision is how far out the retailer is from actually signing the
contracts. In our study we often reference several items where the data changes
significantly as the date of final decision nears. It would be the data on decisions in the
next 6-12 months that would be the best predictor of the final decisions.
Finally, it may be important for you understand the complete context of the survey in
the manner in which the questions are asked. If you would like to review the entire
survey, you can do so at this link.
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Retail 2018 – Retail Transformed
Pricing and Purchase Information
Description Price
Retail 2018 - Retail Transformed
Single User License USD $3,495
Enterprise License USD $3,995
As shown in the table above, this study is available with either a Single User License or
with an Enterprise License. The Single User License allows use solely by the purchaser.
The Enterprise License allows use by anyone within the purchasing organization and
wholly owned subsidiaries. The following pages provide the detail of each license type.
To purchase this report, please contact us at 01.615.591.2955 or email us at
[email protected]. You may also purchase this report through our secure website at
www.ihlservices.com for immediate download with a credit card.
IHL Group License and Fair Use Agreement - Enterprise License Option
This IHL Study includes and electronic enterprise license and can be shared freely within the purchasingorganization and wholly owned subsidiaries. We only ask that this information not be shared with partners or others outside the purchasing company without authorization from IHL Group. The licensedoes not extend to joint ventures or other partnerships. If the relationship is not a wholly owned subsidiary, then both parties would need a license.
Practically, this implies the following:1. The purchasing company can use the reports worldwide internally as long as the international
organizations are wholly owned subsidiaries of the purchasing company.2. The research reports and databases cannot be distributed in whole or in part to partners or
customers without express written approval from IHL Group.3. The purchasing company may quote components of the data (limited use) in presentations to
customers such as specific charts. This is limited to percentage components, not individual unit information. Unit data cannot be shared externally without express written approval from IHL Group.All references to the data in presentations should include credit to IHL Group for the data.
4. The purchasing company can reference qualitative quotes in printed material with written approvalfrom IHL Group.
5. All requests requiring written approval should be submitted to [email protected] and will be reviewed within one business day.
For any questions regarding this policy, please contact us at 615-591-2955 or email us at [email protected]
1064 Cedarview Lane | Franklin, TN 37067 | Phone +1 615-591-2955 | www.ihlservices.com
IHL Group License and Fair Use Agreement - Single User License
This IHL Study includes a Single Use License and is only intended for use by the purchaser. We ask that this information not be shared with partners or others inside or outside the purchasing companywithout authorization from IHL Group.
If the relationship is not a wholly owned subsidiary, then both parties would need a license.
Practically, this implies the following:1. The purchasing company can use the reports worldwide internally as long as the international
organizations are wholly owned subsidiaries of the purchasing company.2. The research reports and databases cannot be distributed in whole or in part to others in the
organization, partners, or customers without express written approval from IHL Group.3. You may quote components of the data (limited use) in presentations to others in the organization
or customers such as specific charts. This is limited to percentage components, not individual unit information. Unit data cannot be shared externally without express written approval from IHL Group.All references to the data in presentations should include credit to IHL Group for the data.
4. The license holder can reference qualitative quotes in printed material with written approval from IHL Group.
5. All requests requiring written approval should be submitted to [email protected] and will be reviewed within one business day.
For any questions regarding this policy, please contact us at 615-591-2955 or email us at [email protected]
1064 Cedarview Lane | Franklin, TN 37067 | Phone +1 615-591-2955 | www.ihlservices.com
© Copyright 2015 IHL Group – All Rights Reserved. www.ihlservices.com
Other IHL Reports Available Include:
Inventory Distortion – What Retailers Leave on The Table - $1,995
The Rise of Distributed Order Management - $2,495
Predictive Analytics/Data Visualization - $2,995
Beacons, Wayfinding, and IOT in Retail/Hospitality - $2,995
EMV Do’s and Don’ts - $2,995
North American Retail POS Terminal Market Study - $3,995
Europe/Middle East/Africa POS Terminal Market Study - $3,995
Asia/Pacific POS Terminal Market Study - $3,995
Latin/South American POS Terminal Market Study - $3,995
POS Software for Hardgoods Retailers - $895
POS Software for Softgoods Retailers - $895
Mobile POS: Hype to Reality - $3,995
North American POS Printer Report - $3,995
Small/Medium POS Sizing - $4,000
Cloud POS: Why the Time Might Be Right - $1,995
12th Annual RIS News/IHL Store Systems Study - $3,900
Mobile POS SW Vendor Share – North America - $4,000
For details and free market summaries, please see our website or see below for more contact information.
Retail Technology Data Services Include:
Sophia is the most comprehensive review of technology in our industry, providing the key
performance, technology, and contact information on 7,600 Retailers and Manufacturers
with over 100,000 qualified leads. It is the only Subscription data service that takes an
enterprise view of the technology that companies are deploying AND the performance that
they are achieving with the use of these technologies. For Details and a Free Company
Profile Report, visit our website at www.ihlservices.com
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