The Candid Voice in Retail Technology: Objective Insights, Pragmatic Advice

The Next Generation Of eCommerce Is Here, But Are Retailers Ready?

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The RSR team is in the process of finalizing its newest benchmark, to be entitled “Retail eCommerce In Context: The Next Iteration”, and it promises to be an interesting read. The report starts off by acknowledging that most retailers were forced to integrate their digital and physical selling “channels” into one selling environment as a response to COVID and changed consumer shopping behaviors. We also found was that while retailers got the job done, it came at a serious cost. And our findings show that the high cost to keep up with consumer expectations will likely persist, because aging technologies continue to be inelastic and have difficulty being changed to meet new demands.

For example, 42% of the study’s respondents report that their eCommerce platform is more than five years old. In technology years, that’s a very long time, and given that 81% of respondents agree that “improving the online checkout experience” is a high priority for them, it creates a conundrum that retailers must break.

Are retailers ready to move to the next generation of eCommerce solutions? It’s important to remember that a decade ago, eCommerce was still assumed to be a separate and self-contained selling channel. The concept of buy-online-pickup-instore (BOPIS) wasn’t even a “thing” in 2010. Now, retailers’ eCommerce sites have matured from a separate sales channel responsible for a small percentage of retailers’ total sales, to the entry point for most consumers’ shopping journeys. According to Google, 63% of all shopping journeys now begin online.

eCommerce sales have exploded in the last 18 months, but stores have experienced unprecedented changes in response to consumers’ digitally enabled shopping behaviors too, most notably as the place where customers orders are finalized. In the new study, over one-third (37%) of our survey respondents indicate that between 21-50% of their total sales originate in the digital channels, and 12% believe that more than 50% of their toplines originate there. That is where BOPIS and curbside pickup play a big part.

But again, are retailers ready to modernize their eCommerce platforms in the context of a unified digital+physical selling environment?

Consumer expectations for a more convenient and seamless shopping experience in the context of a unified digital + physical shopping journey is the driving force causing retailers to consider big changes to their current digital commerce offering. Retailers are consistent in identifying the opportunities, to enable a unified view of inventory, to apply the same business rules across all touchpoints, and to personalize online site search and merchandise selection.

But while one-half of over-performers (Retail Winners) are confident that their current platform can keep up with new requirements triggered by consumer adoption of technology, the other half – and over 80% of average and under-performers – are not. And even fewer retailers believe that they can make changes using their current solution quickly or at a low cost. So, how do retailers expect to address the challenges and take advantage of the opportunities they see in a way that consumers will perceive as differentiating?

Thematic throughout the forthcoming report is the notion that their technology portfolios can only take so much change. Retailers are holding back – unwisely, in our view. When we look specifically at technology enablers in place and those on the horizon, budgets for new updated technologies to support merged channel capabilities are shockingly low. This is particularly disconcerting, given the clear evidence that investments companies like Walmart and Target made in merged technology platforms yielded phenomenal top AND bottom-line growth during what for many was the worst of times.

Here’s the good news: the new study will show that retailers aren’t being blindsided by the shortcomings of their existing solution sets. In fact, there’s a high degree of agreement throughout the retail verticals that it is time to upgrade:

What Is The TOP Way To Overcome Inhibitors To Change?

 

All

FMCG

Fashion

Hardgoods

GM

Investment in new technology applications and/ or infrastructure

59%

75%

80%

39%

63%

(FMCG: Fast Moving Consumer Goods / GM: General Merchandise)

The good news is that the next step is in the hands of decision makers, not about what to do, but when to do it. And when should that be?

The answer to that question is, “now”.

Be Sure To Look For The New Report

RSR’s new benchmark report, Retail eCommerce In Context: The Next Iteration, is being sponsored by Bold Commerce, and is due for publication on our website at the end of this month. Like all RSR reports, it will be completely free of charge to registered users.

Newsletter Articles May 18, 2021
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