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Did the Holiday Season Boost Profits for Retail IT Companies?

By Joseph B. Kappernick

Every Christmas holiday is a chaotic shopping experience. No matter how long the lines are, consumers are willing to rub elbows with fellow consumers just to get the best shopping deals. Meanwhile, businesses are smiling from ear to ear due to the profits they are earning. This is the only time in the year where overspending can be an excuse. And last holiday, retail IT companies took advantage.

You read it right, the retail IT department got their hands on profits through higher holiday sales last holiday season. What made them capable to join the race? IT budgets grew 3 to 5 percent since 2011 and retailers had a 5 percent increase in their budgets. According to Gartner’s 2012 Retail Tech Trends Study, this is a triple increase in the budget.

The increase in the budgets for retail IT projects is due to retail IT companies taking more control about earning revenues. Instead of just taking the back seat all the time, now, they want to enter the picture. Through this increase in budgets, retail IT departments can enjoy more success in earning profits and a better return on investments. But of course, retailers should take caution when investing in IT projects.

* Mobile shopping has boomed in the last years. With the explosion of Smartphones, consumers find it more convenient to shop from their mobile phones. Many retailers were not prepared for this which led to the pressure of upgrading their e-commerce platforms immediately. The upgrade is necessary but retailers should be careful about the upgrading prices.

Retailers have to upgrade databases and use multichannel selling software. These are large-scale buys which really needs a separate budget. However, retailers should make purchases in fair market pricing and terms. Their purchases today will have a huge effect on their budget in the coming years.

* With mobile shopping, retailers are forced to pay for wireless and data networking. But due to the pressure, retailers are overspending by 20 to 50 percent which is huge.

They can try to negotiate for incentives or change plans more suited for their needs. Vendor lock-in is another cost of overspending.

* Retailers may rush into paying for cloud hosting and computing. Rushing their decision results to not being able to get the best pricing model appropriate for their business. Because of this, retailers are trapped paying annual costs, portability limitations and vendor lock-ins which will affect their budget in the next years when cheaper models come out.

Retailers are right to invest in their IT projects to make more money. But, they should also know how to invest wisely rather than just throwing money away. Bear in mind that purchasing decisions today will have a huge impact on your budgeting someday.

Joseph B. Kappernick specializes in helping Fortune 500 companies save money. He recommends that you visit NPI to learn more about it cost management service

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Article Citation
MLA Style Citation:
Kappernick, Joseph B. "Did the Holiday Season Boost Profits for Retail IT Companies?." Did the Holiday Season Boost Profits for Retail IT Companies?. 10 Apr. 2013. 2 Aug 2014 <>.

APA Style Citation:
Kappernick, J (2013, April 10). Did the Holiday Season Boost Profits for Retail IT Companies?. Retrieved August 2, 2014, from

Chicago Style Citation:
Kappernick, Joseph B. "Did the Holiday Season Boost Profits for Retail IT Companies?"

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