Retailers spend no more than two per cent of revenues on technologies to improve their business even though a myriad of in-store tools have entered the market, said a retail analyst Wednesday at a Microsoft roundtable.

Meanwhile, other industries like banking spend an average of between eight

per cent to nine per cent on technology investments, said Rena Granofsky, senior partner at retail consultancy J.C. Williams Group in Toronto.

The good news for software sellers is a “”fair amount of pent-up demand”” for solutions will result in the growth of point-of-sales systems, customer-facing technologies and business intelligence, she added.

Paul Bertin, CEO of Toronto-based software developer Genticity Inc., explained the reason retail companies are such “”technology laggards”” is because they have small budgets compared to more profitable industry sectors and prefer “”buying on the tail end”” of the curve.

For retail chains that are interested, though, Granofsky said some of the key trends in the use of technology revolve around radio frequency identification tags to manage inventory, customer relationship management solutions to direct marketing at shoppers most likely to respond, business intelligence that gives employees specific information whenever it’s needed and mobile wireless devices to speed up activity at the check-out counter, among others.

MIIX, a retail software company based in Thornhill, Ont. that said its products offer “”Tier-1 functionality at Tier-3 prices,”” is addressng a few retail trends this year.

Vice-president of sales and marketing, Patrick Best said his focus is on “”keeping customers rather than finding them,”” increasing the size of their check-out basket and ensuring the right products are on the shelves. “”Out of stock can kill you,”” he explained.

One of Best’s customers, Holt Renfrew, had multiple operational systems preventing the high-end fashion chain from tracking customers from their first purchase throughout the length of their relationship.

Another difficulty for Holt Renfrew was that staff would attend meetings armed with retail-related numbers from several departments that ultimately didn’t match, Best said. “”So executives would spend a lot of time trying to reconcile those numbers.””

So MIIX implemented its Ariadne business intelligence data warehouse, in two weeks consolidating five years of retail history. The result: “”It was the first time ever they had an executive meeting in which all the numbers matched for all departments,”” Best said. He said stores and buyers now have an accurate picture of sales, inventory, orders and vendor and employee performance, but it’s too early to “”quantify this in dollars yet.””

Another software retailer, Dakis Inc. of Montreal, created a questionnaire accessible by Pocket PC or an in-store kiosk that gauges the needs of customers and recommends products based on their profile.

The Dakis Humanized Expert was implemented on the verge of the crucial ski sales season for a buying group called Source for Sports operating more than 175 stores across Canada.

Philippe Hugron, president and CEO of Dakis, explained while technologies like RFID are gaining in popularity, “”getting product out the door is more important. That’s where better selling (through its needs-based survey) plays a huge role.””

Although Dakis expected sales to rise between five per cent to seven per cent over the next few years, it eventually saw ski sales soar by 22 per cent after only one year. Hugron said the solution “”changed the culture”” of the store, giving employees the confidence to sell skis without extensive product knowledge or training.

Bolstered by initial results, Hugron said Source for Sports allowed staff to use the solution in its bike department and achieved a 30 per cent hike in sales during the first three months.

Although Canadian retailers have traditionally trailed U.S. counterparts in adopting technology, retail analyst Granofsky said they have to use technology as others do — otherwise they risk losing on competitiveness and innovation.

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