New Tech Investment Index shows retail needs to adopt IT for survival

Among the significant statistics, the index found 63% of Canadian business leaders said their company shifted to remote work versus 72% in the retail industry.

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No surprise but smaller Canadian retail businesses took a major hit during the pandemic.

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This according to the inaugural Tech Investment Index by TCS Canada, a subsidiary of Tata Consultancy Services that is among the Top 10 IT services providers in the country.

Among the significant statistics, the index found 63% of Canadian business leaders said their company shifted to remote work versus 72% in the retail industry.

“It’s sizeable,” said Ugo Orsi, a spokesman for Retail Digital Transformation at TCS Canada.

“If you look to investment about 90% of retail leaders are saying that we need to invest (in IT) versus an average of 66% of Canadian business leaders. What we read in these stats for us, retailers understood that in order to survive they have to try the adoption of technology. If you think about it, how to leverage e-commerce or loyalty programs, they help quite a lot. The disruption of COVID drove an acceleration of adoption (of these).”

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Another key index discovery is that 31% of Canadian business leaders downsized compared to 49% for retail and 31% of Canadian business leaders cut wages versus 50% for retail.

“Yes, it is (a lot),” said Orsi. “(But) when we do this, we do all across the market. So you have to understand there’s a little bit of difference among all the retailers. If you think about the big box retailer or retailer that are providing food services or pharmaceutical services, they are seen as exactly the opposite, especially at the store level (they’d have) an increase for personnel. Smaller retailers, especially operating in fashion and beauty is where they got a major hit. People spent less in fashion or beauty because COVID compelled people to stay home. Again you have to look at these two major segments, especially during the pandemic, the big box retailer increase the salary for the workers at the store, pay per hour.”

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The index also found 25% of Canadian business leaders received a government loan compared to 36% for retail and 15% of Canadian business leaders completed a merger/acquisition versus 21% for retail.

“COVID brought change, or if you want, disruption, and I’m looking at the business side, I’m not talking about the human side of it,” said Orsi.

“And for many companies that created opportunity to consolidate and move forward so this (merger) number doesn’t surprise (me) because if you think about it the retailer is usually the one that is more prone to the ups and downs (in the market). So it’s for sure a big number but considering the disruption that COVID created, and the speed of this disruption, it can be explained.”

Other notable trend in the survey, investments in new/emerging technologies in Canada are set to increase by an average of 10% to 25% minimum next year.

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