What are the retail hot spots for local partners?

What are the retail hot spots for local partners?

IDC outlines the biggest opportunities for IT suppliers in the Asia Pacific market

Demand for cross-border e-commerce, high internet penetration and smartphone adoption among retailers in Asia Pacific are just a few of the top drivers of new opportunities for IT partners in the local region, according to IDC.

The analyst firm’s Asia Pacific Annual Business and IT Services End-User Survey Results II: Driving DX Transformation in the Retail Ecosystem report examined the retail industry in the Asia Pacific region, excluding Japan.

The firm found that the retail industry in the local Asia Pacific region as one of the most active in terms of leveraging technology to improve customer experience and generate greater sales.

These factors point to a market rife with opportunities for technology enablers, IT providers and vendors alike.

Local retailers’ adoption of digital technologies and investments in infrastructure upgrades are, in turn, creating a lot of partnership opportunities for services vendors to aid retailers in their digital journey, according to IDC.

Many of these opportunities are largely to do with helping retailers create engaging customer experiences and unifying commerce by transforming core business processes, the analyst firm said.

“With this trend, service providers and vendors need to adapt their offerings and integrate 3rd Platform technologies with core retail functions to help retailers in the journey to converge their digital and physical channels," IDC Asia/Pacific business and IT services research senior market analyst, Rijo George Thomas, said.

So-called 3rd Platform technologies – a phrase coined by IDC – generally include mobile computing, cloud computing, analytics and big data, and the Internet of Things (IoT).

IDC’s latest business and IT services end user research has also revealed that the most common service categories adopted by retail organisations in the Asia Pacific region include application services, network services and data center infrastructure services.

At the same time, retailers plan to spend around 47 per cent of their digital budget on external vendors to drive digital transformation initiatives.

Further, the majority of retailers plan to focus on building foundational capabilities to drive digital initiatives by improving their enterprise infrastructure and cybersecurity posture, according to IDC.

Meanwhile, IoT is the top technology solution that retailers are planning to source from external IT and business service vendors, followed by next-generation security.

The local retail sector has long been in flux, especially in markets like Australia and New Zealand, where the prevalence of online purchases from international sellers has impacted local bricks-and-mortar retailers.

Now, with the arrival of online retail giant, Amazon, in Australia, the local retail market is set to get shaken up again. However, it remains to be seen whether Amazon’s Aussie arrival will see a change in IT services spending habits by local retailers, or precisely how tech budgets will be spent.  

Regardless of this uncertainty, IDC suggests that IT service providers want to tap into the opportunities in the retail vertical, they will need to demonstrate deep understanding of the sector and explicitly include the knowledge transfer component in their services engagement, for example providing digital training for retailer organisations' employees.

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