By Steve Rowen, Managing Partner
10/6/2009
Last week we released our newest piece of eCommerce research, Online Commerce in 2009: The Game Has Changed – Have Retailers? We found the business challenges shaping retailers' eCommerce businesses include: getting consumers to engage more, keeping up with shifting consumer behavior, and the pressure to maintain strong growth rates. By far, the top challenge in creating a differentiating online experience for consumers is in understanding how different consumer segments engage with retailers. However, the biggest overall challenge faced is bringing eCommerce functionality across channels; our survey respondents emphasize a future where cross-channel transparency is the most important strategy and more than 15% of all retail sales come from the online channel.
The report also digs deeply into areas where retailers see the most near-term opportunities for their online channel. However, the number one inhibitor preventing retailers from capitalizing upon the all of the opportunities they see is lack of available capital investment funds (60%, figure below). The two other main roadblocks - difficulty quantifying ROI (50%) and difficulty getting the IT resources for eCommerce projects (43%) – go hand-in-hand with the challenge of obtaining the funds required to invest in new technologies.
Impending Boon?
Source: RSR Research, October 2009
Still, there is a marked improvement over the “roadblock state of affairs” that retailers faced just one year ago. In our 2008 research, the number one impediment to retailers was their existing technology infrastructures which prevented forward progress. This year, only 28% of retailers identify this data point as a top-three roadblock, as opposed to 12 months ago, when 67% of laggards and a staggering 70% of Retail Winners told us their existing infrastructure was their primary “enemy within.” From that report:
"(It is) somewhat unsettling (that) this early in the game, retailers are already facing the issue of ‘legacy’ technology and infrastructure as the primary inhibitor to forward progress. (While) it was commonplace in the very early years of the e-channel’s emergence for retailers to ‘roll their own’ solutions, more recently, many have recognized that packaged solutions perform better. As such, our respondents tell us that they need a great deal of help getting out of their technology corner. Unfortunately, so far, few have been able to unscramble what they currently have implemented to ‘get there.’ For these reasons, the ability to educate retailers as to the new generation of eCommerce solutions’ work-and-play-well integration capabilities should be a prime opportunity for any new-wave technology vendor to seize.”
It is clear that vendors have not only been successful in educating retailers, but those retailers are also eager to listen to new eCommerce opportunities; When the online channel is, for most retailers, the only bright spot in the dark, how could they not?
Also, as we have mentioned in several reports this year, when budget is the only real problem, the stage is set for progress. Budgets will free up again. Once capital and credit begin to flow more freely again, retailers’ current top-three roadblocks will become easier to get past. On the other hand, infrastructure challenges and the need to change attitudes about the viability of the e- channel are far harder to overcome. It is encouraging to see that despite (or more likely because of) the current economy, progress has been made on both the technological and the cultural fronts within the enterprise.
To read the entire report, simply follow this link. Within, we examine much more of the challenges and opportunities that retailers see emerging from their online efforts, as well as which technologies are getting the most play – and which hold the most near-term budget.
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