What’s Going On With eCommerce?
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It’s no secret that contactless selling has exploded over the past eighteen months. Borne from necessity, retailers across all product verticals have been driven into the world of eCommerce: buy online, pick up in store (BOPIS), buy online, pick up at the curb (BOPAC) and pure buy online, deliver direct to consumer.
Recognizing that the COVID pandemic accelerant was as disruptive, or worse, than the introduction of the iPhone in 2007, retailers rushed to respond. Our goal in our most recent study – Retail eCommerce In Context (publishing later this week) – was to understand how well retailers have been able to pivot to an “online first” world, the challenges they see, the opportunities nascent in the morass, and how their technology portfolios are able to support these shifts profitably.
What we found was that retailers got the job done, but it came at a serious cost. That cost will persist as aging technologies continue to be inelastic, which consumer wants and needs morph and change. For example, 42% of respondents report 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, creates a conundrum that retailers must break. But how?
Consumers continue to want more. The most frequently cited business challenges include their demand for more convenience in their online experience, and their expectation that shifting between digital and physical realms will be seamless – certainly more seamless than they are today.
What opportunities do retailers see to improve the online shopping experience? Simply, consumers expect the retailer to provide a unified view of inventory availability, and the ability, if they choose, to apply the same business rules across all consumer touch points. However, as you’ll see in the report when it comes out on Thursday, they are holding back on enhancements. Thematic throughout the report is the notion that their technology portfolios can only take so much change. Retailers are holding back. Unwisely, in our view.
And so we return to the most classic of organizational inhibitors: existing technologies are very difficult to change. A customized eCommerce platform bought 7 years ago is unlikely to have the flexibility required. Further, the patchwork retailers are putting together leave them resource-scarce – it’s going to take time and money to get a unified commerce platform implemented any time soon.
Knowing all this, 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.
The report ends with pragmatic recommendations for success, and we’ll be sure to send out an email the moment it is available. We think it’s a very valuable piece.