IT Firms Bank on New Tech Spends by Global Retailers: A Deep Dive 2023
Given that international retail businesses are boosting their technology expenditures, domestic IT companies are expected to close more transactions with them.
Major retailers including Walmart, Home Depot, Carrefour, Target, and others discussed their ambitions to increase spending on digital technologies and generative artificial intelligence at a recent post-earnings call.
“We’re setting the right capital priorities, and you can expect us to continue investing in the areas we’ve talked about like technology, including automation, store and club remodels, and with new stores and clubs in select markets,” said C Douglas McMillon, president, CEO, and director of Walmart, in the company’s post-earnings call.
He continued by saying that the business is utilising modern resources, such as generative AI, to assist members and consumers buy more easily and conveniently while also enabling employees to engage in more fulfilling and effective work.
In a recent report, ICICI Securities stated that major retailers in the US and Europe are “improving customer and employee experience across physical and digital channels, speeding up online deliveries, and exploring AI and large language models for predictive analytics.”
“Retailers are investigating the application of generative-AI and AI for enhancing the consumer and staff experience. Even LTI Mindtree management acknowledged the transition in the market towards predictive analytics and composite platforms that interface with a range of data sources and analytical tools, according to the research.
In order to assist retailers in using technological solutions that streamline the experiences of customers and store employees, Infosys teamed up with Walmart commerce technologies in April.
Major European retailers like M&S and Sainsbury, who saw negative growth last year, are seeing positive growth momentum this year, according to Pareekh Jain, founder of Pareekh Consulting. Less growth led to more significant cost takeout agreements with IT companies.
He claims that Mark & Spencers and Sainsbury were involved in two of the significant contracts TCS secured in the previous 10 months. Even LTIMindtree was awarded a sizable transformation contract by Curry’s of the UK.
Nearly all Indian IT businesses, including the well-known Topaz by Infosys, have lately created Gen AI solutions, which they will provide to their clients eager to take advantage of the capabilities of Gen AI, claims Jain. Midcaps will benefit from more discretionary spending on initiatives involving generative AI, as opposed to massive cost takeout transactions, which typically benefit large corporations.
About 12% to 18% of Indian IT businesses’ income comes from the retail sector. Three of the top six IT businesses saw negative quarter-over-quarter growth in their retail vertical during the April-June quarter, while the other three experienced moderate growth of 0%–1%.
In the hyper-competitive world of global retail, technology is often the differentiator that sets a brand apart from its competitors.
Recent years have witnessed a dramatic acceleration in digital transformation, fueled by the necessity for efficiency, agility, and consumer engagement in an increasingly online market. This surging demand for new tech solutions has opened the floodgates of opportunity for Information Technology (IT) firms.
IT companies are increasingly collaborating with global retailers to create seamless shopping experiences, automate supply chain logistics, provide robust cybersecurity solutions, and deliver insights through data analytics. This article dives deep into how IT firms are banking on new technology spends by global retailers, and why this synergy is a win-win for both parties.
The world of retail is evolving at an unprecedented rate, where traditional brick-and-mortar stores are being replaced or augmented by digital channels. The COVID-19 pandemic has accelerated this transition, pushing even the most hesitant retailers into the digital sphere. The importance of this transformation can’t be understated, given its role in:
Consumer Engagement: Providing personalized recommendations, augmented reality experiences, and other digital-first touchpoints.
Operational Efficiency: Employing automation and AI for everything from supply chain management to customer service.
Data-Driven Decision-Making: Leveraging analytics to improve inventory turnover, pricing strategies, and customer satisfaction.
Retailers are opting for sophisticated e-commerce solutions that can handle high traffic and provide real-time inventory updates.Centralizing data and computing power allows for better analysis and more agile operations. From chatbots to recommendation engines, AI plays a crucial role in customer engagement.
Real-time tracking and predictive analytics for inventory management.As operations go digital, securing transactions and customer data becomes vital.
Tailor-made solutions that fit the specific needs of a retail operation.Strategy development and technology roadmaps to guide the retailer through their digital journey.
Employing sophisticated tools to glean actionable insights from raw data.Providing multi-layered security protocols to protect sensitive information.Ongoing maintenance and updates to ensure that systems are always up to date and secure.
In a strategic partnership, Walmart has tapped into Microsoft’s cloud solutions to improve the efficiency and reliability of its online sales operations.Utilizing SAP’s enterprise resource planning (ERP) solutions, Nike has revamped its supply chain to make it more responsive and efficient.
Amazon’s recommendation algorithms are boosted by NVIDIA’s powerful machine learning GPUs, making the shopping experience more personalized than ever.
As per a report by Gartner, global retail tech spending is expected to exceed $203.6 billion by 2025, a clear indicator of how vital technology has become in this sector.
The symbiotic relationship between IT firms and global retailers is shaping the future of the retail industry. It’s a win-win scenario: retailers get to fast-track their digital transformation journey, and IT companies open up new revenue streams.
As technology continues to advance, this partnership will only grow stronger, offering unprecedented opportunities for innovation and growth for both parties.
