CHICAGO -- Retailers will accelerate spending on computer applications for the balance of this year as top management places greater importance on technology-driven initiatives.
omputer programs, enabling them to leverage the investments.
Those were among the findings of a survey conducted by the market research department of Fairchild Publications, New York, publisher of SN, at the Food Marketing Institute's annual convention here last month.
Nearly three-quarters of retailers participating in the survey indicated this year's technology budgets represented an increase over 1994; approximately the same number of respondents queried last year said allocations would rise somewhat.
A closer look at the survey results, however, suggests a slightly more aggressive spending rate among some companies. Asked to quantify technology budget increases, 18.6% of respondents said this year's spending would exceed last year's by more than 25%. Last year, by comparison, 17% of respondents indicated budgets were up by 25% or more.
Twenty-two percent of respondents reported budget increases ranging from 11% to 25%, while 32.3% said the increases for computer applications in 1995 were 10% or less. This year's investments for new applications remained the same as last year for 23.7% of respondents, and 3.4% reported a decrease in spending.
The importance of technology-driven initiatives continues to
gain momentum: 80.7% of respondents described such projects as "more important" this year than last year. Slightly less than 20% said technology priorities remained constant from 1994 to 1995 and none of those surveyed characterized such projects as "less important."
Nearly half of respondents pursuing new technology projects described their efforts as "very successful" in boosting productivity and efficiency and streamlining operations. A slightly smaller group of respondents, 47.4%, reported "moderate success" and 3.5% deemed their projects "unsuccessful," the survey found.
Use of "real time" point-of-sale scan data to drive buying and merchandising strategies appears to hold promise for a great majority of retailers. Approximately one-third of those surveyed are using scan data "to a great extent" for that purpose while 51.8% are using it "to a moderate extent." About 16% are using the data to a limited extent, or not at all.
Attitudes toward the industry's Efficient Consumer Response movement and related initiatives vary across the board among survey respondents. Nearly 15% considered their companies to be "leaders" who are documenting measurable benefits; 30.7% reported they are pursuing ECR projects aggressively; 36% said they are moving forward with ECR slowly, and 14.7% said they are "not ready" to adopt ECR strategies. Four percent of survey respondents said they had no intention of pursuing ECR.
Computer Applications Spending on the Rise
A sizable group of companies -- 18.6% of respondents -- said computer applications budgets increased by 25% or more this year.
Increased over 25% 18.6%
Increased 11% to 25% 22.0%
Increased 1% to 10% 32.3%
Remained the same 23.7%
Technology Projects Deliver
Nearly half of respondents characterized their technology programs as "very successful" in boosting productivity and streamlining operations.