2014 Holiday Retail Audit: Untapped Opportunities Revealed for Competitive Differentiation in Time for Holiday
eBay Enterprise survey of more than 1,000 online retailers highlights consumer data capture, mobile commerce, local fulfillment and global expansion as innovation fronts this season
KING OF PRUSSIA, Pa., Sept. 22, 2014 – Retailers are prioritizing immediate investments in customer-facing tactics such as price, marketing and customer service over strategic infrastructure, according to research released today from eBay Enterprise, an eBay Inc. company. The 2014 Holiday Retail Audit, a U.S. survey of more than 1,000 ecommerce and marketing professionals from retailers with revenues of $5 million to $250 million, examined planned investments in retail infrastructure ahead of the holiday season. The results revealed key trends consumers can expect this season across consumer data capture, mobile commerce, delivery optimization and global expansion.
Retailers aim to optimize, protect consumer data this holiday
Retailers identified a renewed focus in marketing efforts, investing in tools with greater data capture and analytical capabilities, including social media (29 percent), email promotions (22 percent) and search engine optimization (12 percent). These investments also help retailers feel better prepared to capture in-store consumer data (87 percent). Online and in-store data analysis empowers retailers to create more meaningful customer interactions that drive online and offline purchasing.
While brands continue to aggregate consumer data within their organizations, security is top of mind for large-scale online retailers with projected revenue of $50 – 250 million. Large retailers reported heightened concern around data security at their company (65 percent) while 77 percent have not experienced a security breach to date.
“The 2014 Holiday Retail Audit underlined the short-term focus retailers have on investing in tools that allow them to compete with their peers,” said Steve Denton, vice president marketing solutions. “Nimble retailers need to be laser focused on consumer data as they head into executing holiday strategy in order to map investments back to ROI while maintaining strong margins. There is still time to implement display, retargeting, attribution and social solutions capable of ensuring that a retailer’s brand message reaches new and lost prospects with commitment to the consumer’s privacy.”
Mobile commerce revealed as Achilles’ heel for retailers
Although respondents revealed mobile commerce as their top competitive weakness and the area of infrastructure in which they are least confident, 68 percent did not express plans for new or continued investments in mobile infrastructure for holiday 2014. One in three online retailers cited mobile commerce as an investment priority for holiday 2014, ranking ninth, signaling a lack of urgency in solidifying a long-term mobile infrastructure and strategy despite mobile commerce continuing to be the fastest growing segment of ecommerce.
Retailers should expect new mobile and tablet devices to disrupt their existing Q3 and Q4 retail strategies and brand experiences. Responsive web design is a critical tool that allows retailers to adapt their brand experience and site content to new mobile operating systems or devices swiftly without needing to re-architect infrastructure or reinvest in application development.
“As mobile purchasing continues to grow exponentially, a lack of investment in mobile commerce this holiday season provides retailers who have made this a priority an opportunity to capture significant market share if they can provide the best mobile experience,” said Mark Lavelle, senior vice president of global product, eBay Enterprise. “Responsive web design can be a strategic investment for retailers that want to offer a seamless mobile experience across desktop, mobile and tablet devices. Many factors determine the time needed to implement responsive design but we have seen this successfully done on the Magento platform within a month.”
Retailers don’t realize they can compete on delivery
Fifty-one percent of retailers viewed Amazon as a direct competitor heading into the 2014 holiday season, citing Amazon having a perceived competitive edge in mobile commerce (60 percent), inventory (56 percent), shipping (54 percent) and returns (44 percent). Surprisingly, retailers prioritized price, customer service and marketing in place of infrastructure investments capable of increasing shipping speed and optimizing fulfillment.
“Retailers have an opportunity to win this battleground by increasing their delivery speed. Multichannel retailers can optimize their brick-and-mortar locations as distribution points to fulfill orders closest to customer location, reducing shipping times and cost through inventory and order management solutions,” said Tom Barone, head of omnichannel operations North America. “Retailers have implemented these omnichannel solutions in as little as 99 days, experiencing greater customer satisfaction, improved margins and increased sales.”
Retailers prioritize ease of entry over global market opportunity
While 45 percent of large online retailers detailed plans to invest in global expansion for holiday 2014, the investment priorities contradicted market opportunity. This study revealed the top markets for global ecommerce expansion were Canada (23 percent), followed by the U.K. (16 percent), China (15 percent), Australia (7 percent) and Mexico (5 percent), respectively.
Large online retailers cited a lack of reliable local partners (33 percent), diminished market demand (32 percent) and hampered inventory capabilities (31 percent) as top barriers for pursuing new global opportunities. Although Canada provides easy entry into global expansion, the market opportunity globally is immense and retailers have options to help them take that first step.
“Our findings point to an increased need for retailers to work with proven commerce partners that can help brands localize fast and effectively,” said Lavelle. “eBay Enterprise can help retailers launch a robust multi-lingual site on Magento, the top platform for fast-growing companies1, and provide access to partners in key markets to facilitate entry without the need to invest in physical locations. We also help brands scale quickly through our global distribution network and fulfillment solutions.”
About The 2014 Holiday Retail Audit
The data points referenced above come from a study commissioned by eBay Enterprise, produced by research firm Edelman Berland, and was conducted as an online survey among 1,056 online retail professionals. Respondents had ecommerce and online marketing responsibilities for online retailers at companies anticipating $5 million to $250 million in online revenue for 2014. Margin of error is +/- 3.02 percent. Data was collected from June 24, 2014 through July 7, 2014.
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About eBay Enterprise
eBay Enterprise is a leading global provider of retail-optimized commerce solutions, including the Magento platform, order management, fulfillment, customer care, and marketing solutions. We enable brands and retailers of all sizes to deliver consistent omnichannel experiences across all retail touch points to attract and engage new customers, convert browsers into loyal buyers, and deliver products with speed and quality. With unrivaled flexibility and control, our clients are armed to accelerate sales growth and win with today’s digitally connected consumer. eBay Enterprise is headquartered in King of Prussia, Pa. and has offices in Austin, Barcelona, London, Los Angeles, New York, and Shanghai. eBay Enterprise is an eBay Inc. (Nasdaq: EBAY) company. More information can be found at www.ebayenterprise.com and www.magento.com.
1. Internet Retailer Top 500 Guide, 2014