Study: More Retailers Offer Online Shopping

CHICAGO (04/19/2000) - The percentage of retailers selling merchandise over the Internet doubled from 1999 to 2000, according to a survey of 159 retail executives and IT managers released here at this week's Retail Systems 2000 conference.

The study, a joint effort by Computer Sciences Corp. and Retail Info Systems News, showed that 36.3 percent of the retailers polled offer online shopping services, compared with just 17.8 percent a year ago.

But the study confirmed that online shopping is still offered by a minority of retailers, consistent with a Deloitte & Touche LLP survey released earlier this year. The Deloitte study, which canvassed 156 retailers, showed that roughly a third (35 percent) of merchants are selling goods online.

Retailers' business-to-business efforts are also dragging, according to the new CSC/RIS News survey. Just 7.3 percent of the retailers polled said they have built extranets to collaborate with trading partners, while more than half (57.3 percent) conduct no business with trading partners via Web-based systems.

Still, IT spending in the retail sector remains plentiful. The study showed that overall IT operating budgets are expected to increase 8.4 percent in 2000, with 44.1 percent of the budgets earmarked for implementing new package or custom applications. Technology capital budgets are expected to rise an average of 16.8 percent this year, with 31.2 percent directed toward new IT infrastructures.

However, the Collaborative Planning, Forecasting and Replenishment (CPFR) initiative that several major retailers have been piloting still has not hit the radar screens of many companies. Just over 50 percent of the retailers polled said they have no plans to participate in CPFR efforts to streamline industry supply chains.

Among the reasons cited:

Vendors have not asked retailers to participate (41.3 percent).

It's not appropriate for their companies (23.8 percent).

The investment would be too great to handle (20.0 percent).

CPFR would not generate sufficient benefits (12.5 percent).

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