Retailers’ spending on artificial intelligence (AI) and the Internet of Things (IoT) is expected to rocket over the next three years, putting them under more pressure to improve their IT security.

That’s according to research commissioned by Claranet, Europe’s largest managed services provider, and due to be published in September in Claranet’s 2017 Market Research Report – Beyond Digital Transformation.

Michel Robert, UK Managing Director at Claranet commented: “Moving fast is essential for retail businesses, and technologies that improve areas such as customer experience and IoT capabilities are particularly interesting. This can only be done if organisations have comprehensive solutions in place both to innovate and maintain the highest levels of IT security.”

The research was conducted by Vanson Bourne who surveyed 121 retailers from across Europe and found the sector includes some of the fastest adopters of new technologies today. For example, 68% report having already invested in AI to some extent, 94% are using IoT technologies, and 97% use cloud.

The researchers found the retailers’ spending on artificial intelligence is set to increase by 53% over the next three years compared to the previous three and the amount of budget given to cloud will increase by 24%.

However, the biggest growth area will be IoT. Retailers on average spent £224,000 on IoT over the last three years, but this is expected to climb to £605,000 over the coming three – an increase of 169%.

Commenting on the findings, Michel Robert, UK Managing Director at Claranet, said: “The retail sector is hugely competitive, so organisations need to be innovative in their approaches as a matter of necessity. Retailers have always been fast adopters of cloud, but what our research has shown is that retailers are seizing the opportunity to adopt the most sophisticated next-generation technologies. This approach illustrates the intensity of the battle to gain competitive advantage by improving the customer experience and harvesting valuable customer data.”

Robert went on to say that retailers should not forget the importance of the underlying network when deploying these often-bandwidth heavy technologies. Without a reliable network in place, the performance of these technologies, which are designed to improve the customer experience, will suffer, he said.

He added: “Connectivity is the key, and often forgotten, component of robust and high performing platforms. Unless retailers have a reliable network in place that is strong enough to handle the rigours of digital retail business, technologies being rolled out to improve the customer experience could actually have the opposite effect. Customers can be particularly unforgiving when it comes to poor technology performance, so it’s essential that retailers address this.”

Claranet says it recently worked with Pets at Home after the retailer encountered this issue when rolling out a new iPad-based instore digital initiative, the Pet Pad.

Suzie Williams, Business Systems Director, explained: “We immediately faced a number of obstacles with network issues causing regular dropouts, adversely affecting the iPads’ ability to process transactions. The seamless shopping experience that we had envisioned was being undermined by our connectivity issues, and we needed focused and dedicated support to provide the infrastructure necessary to make Pet Pads work.”

Robert concluded: “The signs look positive for now, but it is vital that retailers maintain this momentum, by ensuring that their plans to invest in next-generation technologies come to fruition.”