Retail/Hospitality IT Spend and the Coronovirus Impact
While the world watches the physical and economic impact of the Coronavirus (COVID-19), at IHL we have reviewed and adjusted our IT forecast for retail and hospitality worldwide based on our expectations on the world economy. The economic fundamentals in most markets worldwide are strong outside of this impact.
While certainly consumer traffic will be down for a period, there are some positive trends that are actually helping to buffer negative downside in IT spend. These include less travel, more focus on specific projects, opportunities to replace equipment with less impact on operations. As well, by far the most significant investments in IT are in moving solutions to cloud-based solutions, particularly those that optimize the relationship for digital orders with store fulfillment. It is our view that the trends to optimize click and collect and delivery will double their previous investment as a result of people to avoid crowds for the next 90 days.
We also see significant increases in remote tools, moves to decentralize the supply chain and AI/ML, Forecasting technologies, and Analytics. Deadlines for PCI in the US (expiration of PCI 2.0 and roll-outs in C-Stores) are driving growth…and these decisions are already made.
Overall, we view COVID – 19 as a 1 fiscal quarter significant blip on retail consumer spending, with less impact rolling through on 2020 IT Spend. If there is to be a significant drop in retail spend as a result of COVID-19 and resulting economic impact beyond 1 fiscal quarter, the IT impacts will be more significant in 2021 spend than for 2020. Of course, should the virus impact grow longer than 1 quarter worldwide, all growth will be reduced further.
For more information on our WorldView IT Forecasting model that includes forecasts for 300 technologies in 10 retail and hospitality segments by region, CLICK HERE
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