Online retailers expect to increase revenue by 17%
KING OF PRUSSIA, Pa. — Retailers anticipate accelerated growth for 2015. According to a study from eBay Enterprise, an eBay Inc. company, 72% of more than 1,000 online retailers surveyed anticipate online revenue to increase by 17% in 2015.
Confidence in commerce infrastructure is also high, with 95% of respondents stating they are very or somewhat confident their e-commerce experience meets consumers’ needs and expectations.
Online engagement emerged as the top area to fuel growth in 2015 (33%) followed by global ecommerce expansion (23%), mobile commerce (22%), digital targeting (22%) and product innovation (22%). Retailers are also planning to experiment with brick and mortar innovation in 2015, with initial investment in in-store experiences (14%), global brick-and-mortar expansion (12%) and pop-up expansion (11%).
Twenty-eight percent of retailers of all sizes are afraid of new competitors entering the market, while large retailers prioritize the speed of innovation (25%), staffing (23%) and the risk of re-platforming (22%) as secondary concerns.
Retailers pointed to fast growing mid-sized and business-to-consumer organizations as driving the most innovation in the commerce space according to 51 and 55% of respondents, respectively. Large retailers ($50 million to $250 million in online revenue) define innovation as identifying new channels to engage consumers, while mid-sized retailers ($10 million to $50 million in online revenue) define innovation as engaging consumers across multiple channels.
Among those investing in the mobile arena, mobile device optimization (54%) and mobile application development (46%) emerged as new priorities of investment (vs. continued areas of investment). And of those investing in mobile commerce, 51% of respondents plan on building a unique Android application and 50% plan on building a unique iOS application.
Cloud is also an increasing focus for retailers with 26% of large scale retailers ($50 million to $250 million), claiming that the technology is critical to their company’s future growth. Additionally, 20% of large retailers claim that the cloud is the most important technology over other recent innovations.
In 2015, retailers plan on bringing ecommerce hosting (55%), inventory management (46%), marketing program management (40%) and CRM (40%) into cloud environments. Although cloud infrastructure is increasingly top of mind for retailers, top obstacles to adoption include security concerns (26%), shared resources (17%) and a lack of IT support staff (16%).
Forty-seven percent of respondents stated they’re prepared for global expansion, with 73% noting that they’re ahead of the curve when it comes to this initiative.
Despite being the second largest global economy, China emerges as the second priority for global shipping expansion and third priority for global e-commerce expansion and global brick and mortar expansion.
Thirty-nine percent of respondents stated that ecommerce localization was the top barrier to global expansion and 87% of respondents are very or somewhat concerned about the dilution of brand values and integrity when entering new markets.
Partners were highlighted as playing an important role in enabling localization with 45% of respondents enlisting technology partners that provide solutions, 41% working with services partners to help optimize the business and 41% working with channel partners to help distribute products across retail networks.
Recent negotiations surrounding the West Coast port closures have significantly impacted retailers’ strategic approach in 2015, with 43% recording delays in fulfilling consumer orders and 40% experiencing delays in available inventory.
These closures have created significant operational inefficiencies. Nearly a third of respondents stated they had to reroute inventory to the East Coast – 39% of respondents noted their primary fulfillment is on the West Coast and 42% indicated the majority of their consumers are located on the West Coast.
Staffing continues to be critical in enabling growth and a critical area of investment to fuel growth. Of those investing in staffing, 56% plan on investing in ecommerce and marketing professionals with anticipated hiring peaks in the second and third quarters in advance of holiday 2015. Additionally, 52% of respondents plan on investing in customer service staff, and 45% plan on investing in fulfillment staff.