Research by PMC and Retail Economics found that seven in 10 direct-to-consumer brands have yet to fully integrate their core systems. More than half of retailers also linked fragmented systems to weaker margins and a poorer customer experience.

The survey of more than 100 senior retail and brand leaders examined progress towards unified commerce across systems including enterprise resource planning, point of sale, customer relationship management and order management.

Among direct-to-consumer brands, 70% said their core systems were not yet fully integrated, a gap the researchers said can lead to siloed operations and slower decision-making. Omnichannel retailers appeared slightly further ahead, with 62% saying they were already on the path to fully integrating the main systems in their technology estates.

The findings point to both commercial and operational pressure. Some 56% of retailers said fragmented systems were affecting profitability and customer experience, while 54% said operational effectiveness had been compromised.

Operational strain

The research suggests many retailers are still struggling to match their unified commerce ambitions with the practical work of connecting legacy and newer systems. That matters as retail groups face growing demands to manage stock, orders, marketing and customer data across stores, websites and other sales channels.

Richard Lim, Chief Executive Officer of Retail Economics, said the challenge is likely to deepen as the retail environment becomes more complex. Customer journeys are becoming “infinitely more complex”, he said, shaped by new channels, resale formats and the spread of artificial intelligence.

That rising complexity is likely to increase the burden on retailers that have not addressed gaps in how their systems exchange and use data. Without better integration, the report argues, businesses risk slower responses to changes in demand and less visibility across operations.

Potential gains

Retailers that had made more progress in unifying their technology stacks reported a range of benefits. Some 58% said centralised data flows led to faster decision-making, 45% reported significant cost savings and 48% said they had seen measurable revenue growth.

Those figures suggest the issue extends beyond information technology teams to finance, trading and customer service functions. Better-connected systems can affect how quickly a retailer updates pricing, manages fulfilment, responds to inventory issues and tracks customer activity across channels.

Rich Lowe, Chief Executive Officer of PMC, said businesses that modernise integration can make better use of their existing technology. “Retailers using modern integration technologies are able to unlock far greater value from their core systems, creating a continuous flow of data that improves visibility, streamlines operations and enables faster decision-making,” he said.

He contrasted that with older approaches to system integration. “Yet where legacy approaches persist, they create unnecessary complexity and innovation drag,” Lowe said.

Margin pressure

The findings come as retailers continue to look for ways to protect margins while maintaining service levels and keeping pace with changing customer expectations. Fragmented systems can add costs through manual workarounds, duplicated processes and delayed access to information, all of which can affect performance.

For direct-to-consumer brands in particular, the data points to a significant gap between growth ambitions and operational readiness. Many rely on rapid responses to customer demand and clear oversight of fulfilment, returns and marketing performance, which become harder to maintain when systems are poorly connected.

Omnichannel retailers may be slightly more advanced, but the figures indicate that many are still in transition rather than at a completed stage. That leaves a large share exposed to the risks identified by the survey, even if integration work has already begun.

Lowe said retailers need to simplify system complexity to improve performance. “By unifying data through clean, connected and modern systems architecture, retailers can start to untangle that complexity to unlock growth,” he said. “And, as retailers prepare for Peak Trading, agility becomes even more critical; brands need the interoperability to act fast, stay in control and capitalise on revenue opportunities.”

The Aspen Building, developed by The Oxford Trust, was officially opened on Friday, July 17, as part of the Wood Centre for Innovation in Headington’s science and technology cluster.

Dame Anneliese Dodds MP for Oxford East, who formally opened the building during a ceremony attended by civic leaders and members of the science and business community, said: “I’m proud that Oxford East has long been a place where innovation, enterprise and opportunity come together.

“The Oxford Trust’s Aspen Building at the Wood Centre for Innovation is a great example of how investment in local facilities can support growing businesses, create high-quality jobs and keep Oxford at the forefront of scientific discovery.”

The 17,000 sq ft facility provides state-of-the-art CL2 laboratory and office space across two floors, designed to support science and technology start-ups, SMEs, and scale-ups in the life sciences sector.

Dame Dodds also praised The Oxford Trust’s work with schools and communities, saying: “Equally important is The Oxford Trust’s work with schools and local communities, helping ensure that young people from across our constituency can see a future for themselves in science, technology and innovation.”

The Aspen Building is part of The Oxford Trust’s charitable business model, which reinvests income from its innovation centres into STEM education and engagement activities, delivered by its Science Oxford team.

John Boyle, chair of trustees at The Oxford Trust, said: “The opening of this new facility is a proud moment for the Trust.

“By creating additional laboratory and office space for growing science and technology businesses, while expanding our STEM education facilities to expand delivery through Science Oxford, this new building perfectly reflects our charitable mission to encourage the pursuit of science.”

Designed with sustainability in mind, the building has achieved BREEAM Excellent certification and will deliver at least 10 per cent Biodiversity Net Gain across its surrounding woodland site.

The project supported approximately 600 jobs during construction, including 80 local jobs.

Once fully occupied, the Aspen Building is expected to generate up to 80 additional jobs.

Steve Burgess, CEO of The Oxford Trust, said: “The opening of the Aspen Building is a landmark moment for The Oxford Trust and a significant investment in Oxford’s innovation future.

“This facility provides the specialist laboratory and workspace that science and technology companies need to scale successfully, while strengthening the capacity of the Headington Science Cluster and Oxford’s wider innovation ecosystem.”

The building sits alongside the fully occupied Linden Building and will further enhance The Oxford Trust’s support for high-growth science and technology businesses.

KAREN JOY BACUDO

Finance Editor

The Association of Financial Mutuals has called on the Government and regulators to reform public interest entity audit rules, arguing that smaller mutuals face disproportionate compliance costs under the current regime.

It made the case as part of a broader policy agenda aimed at removing barriers to growth for member-owned financial firms while maintaining governance and consumer protection. The group argues that some smaller mutual organisations are treated the same as much larger financial institutions, despite their very different scales and systemic importance.

Public interest entity (PIE) status imposes stricter audit and reporting requirements on organisations considered significant to the public. According to the Association of Financial Mutuals, the current framework captures mutuals that are not systemically significant, creating costs that could otherwise be spent on member services, product development or expansion.

The organisation represents mutual and not-for-profit insurers, friendly societies and other financial mutuals across the UK. It argues that a more proportionate approach to audit regulation would support a more diverse financial services market and align with the Government’s stated aim of expanding the mutual sector.

Andrew Whyte, Chief Executive Officer of the Association of Financial Mutuals, set out the group’s position.

“The current Public Interest Entity regime captures smaller mutuals that are not systemically significant and places a disproportionate burden on organisations whose primary focus is delivering value to their members. We support strong audit and governance, but the framework must be proportionate and targeted at those firms that truly warrant this level of scrutiny. Reforming the regime would free up mutuals to invest more in innovation, customer service and growth, helping to build a more diverse, resilient and inclusive financial services sector,” said Whyte.

Wider agenda

Audit reform is one part of a wider package of changes the trade body wants. Another priority is changing capital rules so mutuals can raise external funds without jeopardising their mutual tax status.

This has long constrained some member-owned firms, which cannot rely on equity markets in the same way as listed companies. The group argues that access to suitable external capital would enable firms in the sector to invest in new products, technology, and distribution channels while retaining their ownership model.

It also wants the Law Commission’s recommendations on friendly society legislation to be implemented in full, saying a modernised legal framework would remove outdated restrictions and make it easier for such organisations to operate and develop.

The trade body is also seeking a more rigorous method of assessing how regulatory changes affect mutuals. It argues that rules are often designed with larger shareholder-owned institutions in mind, even though mutuals have different structures, incentives and capital models.

It is also calling for greater clarity on product bundling and cross-selling within the mutual sector, saying clearer rules would help firms broaden their offer to members without creating uncertainty over compliance expectations.

Sector role

Mutuals occupy a distinct place in the UK financial system because customers or members, rather than shareholders, own them. That structure means profits are generally retained for the benefit of members through pricing, service levels or reinvestment in the business.

The group argues that this model can support financial resilience and inclusion, particularly if firms can expand without unnecessary regulatory obstacles. Its latest strategy says the sector could play a larger role in the market if policy settings better reflected the nature of mutual organisations.

It linked its proposals to the Government’s commitment to double the size of the mutual and co-operative sector, arguing that this ambition will be difficult to achieve unless regulation, tax treatment and legal structures are adjusted to reflect the differences between mutuals and larger listed financial groups.

For policymakers, the key question is whether any relaxation of PIE rules for smaller mutuals can be designed without weakening audit oversight. The Association of Financial Mutuals argues that strong scrutiny should remain, but that thresholds and applications should better reflect the actual public risk posed by the institutions concerned.

The debate also raises a wider issue in financial regulation: how to apply common standards across institutions with sharply different ownership structures and business models. For mutuals, the concern is that a framework intended for large public-interest firms imposes a heavier burden on smaller member-owned organisations.