Photo: Target
Retailers making significant investments in technology are typically credited within industry circles for showing the type of commitment necessary to compete in today’s competitive and data rich environment. Whether these investments are the right ones for a particular business, however, is more important than the size of a given retailer’s IT budget. Two recent articles point to the importance of not only making tech investments, but doing so in a way that helps move the corporate needle forward.
A Denver Post article pointed to the need for retailers to emphasize technology research and development (R&D) if for no other reason than to avoid eventually being overwhelmed by Amazon.com. Jeff Bezos and company, according to the article, spent $12.5 billion on tech R&D last year.
The same piece highlighted the experience of eBags.com, a pure play e-tailer which, according to CEO Mike Edwards, has implemented about eight new technologies over the past year after having tested a dozen. EBags’ tech priority has been set on developing consumer insights to drive sales. “We are obsessed with how you act on our website,” Mr. Edwards told the Post.
A lack of focus has been one of the problems that have undermined Target’s success in recent years. A Minneapolis Star Tribune article points to the experience of new CIO Mike McNamara who concluded after joining the retailer that it was using an oversized outsourced workforce to handle too many projects. Mr. McNamara, in what he called a career first, asked for the tech budget to be cut and refocused the organization on areas critical to current and future success.
Mr. McNamara cut the list of projects from 800 to 80. “Even a company as big as Target doesn’t have 800 priorities,” he told the Star Tribune.