Why Backend Digital Infrastructure Will Define the Retail & Hospitality Sector’s Success in 2026
For years, Retail & Hospitality businesses have focused their efforts investing heavily in front-end / customer facing digital experiences, such as smoother checkout, improved apps, loyalty, and personalisation.
Whilst front end investments will always be important, our research with Retail Economics, highlighted in 18% Advantage Retail and Hospitality Report, shows that the real performance gap opening across the sector is at the back end. The reasons are clear - backend digital infrastructure is the backbone of successful operations, planning, and decision making.
The numbers also highlight this shift; our research outlines that digitally mature businesses plan to increase transformation investment by £66m over the next 2–3 years, compared with £17m among newer starters. Yet 34% of all businesses still say ROI is their biggest challenge, and only 18% rate their transformation performance as excellent.
This tells a clear story: most organisations are spending on their back-end infrastructure, but few are investing in infrastructure that will realise measurable business benefits.
Where Leaders Are Investing and Why It Matters
Our report highlights that the most advanced organisations are deliberately shifting investment towards backend capabilities that directly influence profitability, cost to serve, and operational reliability.
Some key insights:
56% of advanced retailers are increasing their focus on supply chain and inventory management.
More than half identify better data driven decision making as a primary transformation driver.
AI, automation and operational efficiency are becoming central investment areas, not secondary priorities.
These aren't just “behind the scenes upgrades.” They are the backbone of availability, forecasting accuracy, margin protection, and customer satisfaction. As an example, even businesses with the best front-end customer experience will be caught out by inaccurate stock levels or decisions reliant on outdated data!
The Link Between BackEnd Strength and ROI
One of the strongest insights in our report is the relationship between technical readiness and ROI outcomes. The data shows that businesses that feel technically ready for digital transformation are far less likely to report challenges achieving ROI.
For successful businesses within sector, modernising backend platforms, data infrastructure, and operational systems isn't just an IT exercise, it’s a commercially driven priority because businesses without back-end investments simply cannot scale the efficiencies, insights, and revenue improvements needed to achieve significant ROI.
What Retail & Hospitality Leaders Need to Prioritise in 2026
To follow the path of the top 18% of digital leaders, organisations should consider focusing on the following 4 priorities:
Strengthening core backend systems such as inventory, supply chain, forecasting, data.
Building the data foundations needed for faster, more accurate decisions and the efficient use of AI.
Using automation to remove operational friction, process inefficiencies, and uplift productivity.
Linking technology investment to clear commercial KPIs, rather than just delivery milestones so that back-end capabilities are seen as strategic assets that support growth.
The Bottom Line
Investment in backend digital infrastructure is crucial to business success within Retail & Hospitality.
When businesses choose to invest in their back-end infrastructure, they are likely to improve accuracy, availability and decision making amongst teams. Ultimately, freeing up employees to deliver a smooth customer experience, whilst ensuring that the business can adapt to competitor demands through innovation.
Growth won’t come from the frontend. It comes from the engine behind it. If your foundations aren’t ready, now’s the moment to act.
Get in touch with Seun Oyeleye today.
