Retailers around the world have spent more than $10 billion on technology to enable home working and enhance e-commerce channels in response to the COVID-19 pandemic.

A survey of more than 4,200 chief information officers (CIOs) by Harvey Nash and KPMG found that retailers had shifted operations rapidly during the first three months of the pandemic as High Street shops were forced to close and consumers flooded to online and mobile channels.

This surge in spending meant that both UK and global retailers spent more than their annual technology budget rise in just three months, the survey found. Almost half of retailers had to either ‘hard reset’ or transform their operations digitally to weather the crisis.

On the other hand, for more than three in 10 retailers, the key challenge was to deal with a significant surge in demand driven through online channels.

As a result of the need to develop and enhance their digital channels, the vast majority (82 per cent) of IT leaders in UK retail reported that they expect their
tech headcount to increase (45.5 per cent) or stay the same (36.5 per cent) in the year ahead.

A total of 91 per cent of IT leaders in UK retail agreed that as a result of COVID they had moved a significant part of their workforce to remote working, while 73 per cent reported that this shift had increased collaboration between the business and technology teams.

With large numbers of staff continuing to work from home, the survey also found that the most important factors in engaging and retaining key technology talent in UK retail were also changing, with ‘a strong culture and strong leadership’ and ‘the purpose of the organisation’ the most important factors - ahead of ‘good remuneration’.

According to the survey, the three most scarce technology skills in UK retail are enterprise architecture, business analysis and organisational change management.

Bev White, chief executive of Harvey Nash Group, said: “COVID-19 means the High Street may never be the same again – accelerating digital as the default mode for growing numbers of customers.

“As our research reveals today, retailers are now needing to invest in tech professionals following one of the biggest surges in technology spending that the global retail sector has experienced," she continued, adding: "Not only did retailers rapidly move staff to safe and secure home working, they also supercharged their e-commerce offerings to capitalise on online retail sales during the early stages of the pandemic.”

The CIO survey also found that over half (57 per cent) of UK retailers expect their overall IT/technology budget to increase over the next 12 months. In light of this new reality, the top three most important technology investments were systems of insight - business intelligence - customer experience and engagement, and supply chain and logistics.

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