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IT systems and data breaches 'holding back retail growth'

Government and European Union (EU) regulation is viewed by UK retailers as the main barrier to business growth, according to new research, but IT systems and cyber/data breaches are also high up on the list of major industry concerns.

A new report by business law firm DWF, which surveyed 150 executives from retail organisations across the country, saw 40% of respondents cite legislative red tape as one of their top three growth preventers, while IT systems (38%) and cyber and data breaches (32%) are also seen as major obstacles to progression.

All retailers questioned for the research said that data security is imperative for their brand reputations.

Alan Owens, head of technology & communications at DWF, said there has been a renewed retail focus on how to prevent breaches over the last few months, following some high profile hackings, such as last year's TalkTalk and Ashley Madison incidents.

"Big data can open up exciting new opportunities for customers and brands, but only if businesses learn from recent history to mitigate the risks," he explained.

"With tighter European regulation of data security coming in this year, failing to do so could be met with a high financial, as well as reputational, cost."

DWF's survey found that technology is retailers' joint biggest focus for the next three years and was considered a top priority for 51% of respondents, while 35% are looking at how they can make the most of big data to better understand their customers and bring them more personalised shopping experiences.

The law firm advises retailers following theses strategies to only hold customers' personal data where absolutely necessary and, if using beacon-like technology in a store, they should ensure that "consent is explicitly obtained, particularly if the devices belong to children or teenagers".

Regularly reviewing cybersecurity, data retention and crisis response policies, is also encouraged by the lawyers.

Hilary Ross, head of retail, food & hospitality at DWF, commented: "Many high street retailers are looking to invest in in-store technology to improve the customer experience – over 40% of their budgets will be dedicated to bricks-and-mortar stores.

"The key to success will be implementing these new IT systems without causing significant disruption, and building in privacy by design. Customers view retailers as the custodians of their data and one slip up can destroy that relationship in an instant."

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