Retailers waste cash on communications

Investment in SMS text messaging and digital TV has been the biggest waste of money for retailers in the last 18 months, according to research.

A survey commissioned by Indian outsourcing company HCL found that almost a third (32 per cent) of senior decision-makers saw new communication tools as unnecessary but would prefer to spend budgets on RFID and chip and PIN.

Danny Rappaport, associate vice president of HCL's retail practice, said: "In retail things move so quickly. Opinion is still divided on RFID but it came out on top. It is of little surprise that RFID and chip and PIN take priority for next year's investment, particularly as many retailers are now anxious to refine systems further or catch up with their competitors."

According to the poll, 30 per cent of respondents said RFID technology is the highest priority investment for the next year, with chip and PIN a close second (27 per cent).

Nearly a third of the 50 respondents (29 per cent) said website development was the biggest strain on budget, followed by 21 per cent who complained that new back-office systems were a waste of resources. But opinion was divided on the value of website development and e-tailing - while 21 per cent said it was a waste, another 21 per cent insisted it was important in the next 12 months.

"The apparently contradictory views on website development and e-tailing could suggest that, although investment to date has not yielded the desired results, IT decision-makers recognise the need to develop their online presence further," Rappaport added.

"We also asked what took greatest precedence in their jobs, and unsurprisingly they said budget. This backs up the argument that you have to get the right return on investment."