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$10bn technology investment helps create new jobs for UK retail

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The surge in spending meant that both UK and global retailers spent more than their annual technology budget rise in just three months, as the global crisis hit, and lockdowns began to be enforced.

Retailers globally spent the equivalent of over US$10bn on technology to enable safe and secure home working and enhance their e-commerce channels during the first three months of COVID-19 – as high street shops were forced to close and consumers flooded to online and mobile channels.

This retail sector data is released today from the 2020 Harvey Nash/KPMG CIO Survey, the largest technology leadership survey in the world with of over 4,200 responses.  The survey also found that few retailers have been unaffected by the crisis. Almost half had to either ‘hard reset’ or transform their operations digitally to weather the crisis. On the other hand, for more than three in ten the challenge was to deal with a significant surge in demand driven through online channels.

As a result of the need to develop and enhance their digital channels, the vast majority (82%) of IT leaders in UK Retail report that they expect their tech headcount to increase (45.5%) or stay the same (36.5%) in the year ahead. The three most scarce technology skills in UK Retail are Enterprise Architecture, Business Analysis, and Organisational Change Management.

Bev White, Chief Executive of Harvey Nash Group said: “Covid-19 means the High Street may never be the same again – accelerating digital as the default mode for growing numbers of customers.  As our research reveals today, retailers are now needing to invest in tech professionals following one of the biggest surges in technology spending that the global retail sector has experienced. Not only did retailers rapidly move staff to safe and secure home working, they also supercharged their e-commerce offerings to capitalise on online retail sales during the early stages of the pandemic - as their high street shops were forced to close.

Although there have been significant job losses on the high street, the massive online consumer demand throughout the pandemic has offset some of these losses by creating tech jobs across the sector. Technology leaders in UK Retail are also very optimistic about their future tech recruitment plans - with our research showing that the majority are either increasing or retaining their staff over the year ahead.”

The CIO Survey also found that over half (57%) of UK retailers expect their overall IT/technology budget to increase over the next 12 months, and in light of the new reality, the top three most important technology investments are systems of insight (e.g. business intelligence), customer experience and engagement, and supply chain and logistics.

Remote working and the new deal for employees:

Remote working is here to stay – 91% of IT leaders in UK Retail agreed that as a result of COVID they had moved a significant part of their workforce to remote working.

Collaboration and culture – As a result of remote working, 73% of IT leaders in UK Retail report increased collaboration between the business and technology teams and half said that it has created a culture of inclusivity in the technology team.

The new deal for employees – With large numbers of staff continuing to work from home, the survey also found that the most important factors in engaging and retaining key technology talent in UK Retail are also changing, with ‘a strong culture and strong leadership’ and ‘the purpose of the organisation’ the most important factors - ahead of ‘good remuneration’. Leaders will therefore need to rethink how they attract and engage their employees in a world where physical location is no longer a prime asset.

Bev White concluded: “In a more remote working environment people-centred leadership skills are critically important. More than ever before, good leaders will be those who take a genuine interest in the welfare of their team, checking in regularly, listening and supporting. They need to maintain a sense of team and identity, so that everyone feels part of something even if they are physically dispersed.

We expect the rising trend in customers going online first for their retail purchases to continue. As recent ONS data has shown, the strong growth in online retail sales in the UK during the pandemic has meant that online sales were still 46.8% higher than February’s pre-pandemic level. With this huge uplift in online sales continuing, we would also expect demand for tech jobs in UK Retail to hold up in the medium to long term.”

 

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