King of Prussia, Pa.—April 29, 2015—Retailers anticipate accelerated growth for 2015, according to research released from eBay Enterprise, an eBay Inc. company. The 2015 Retail Growth Outlook, a U.S. survey of more than 1,000 e-commerce and marketing professionals from retailers with revenues of $3 million to $250 million, examined projected revenue forecasts and critical decisions retailers will make this year to achieve anticipated growth. The results also revealed obstacles impacting 2015 decisions, technology priorities and the importance of global expansion to fuel growth.
Evaluating the Current Retail Environment
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 percent), staffing (23 percent) and the risk of re-platforming (22 percent) as secondary concerns.
Retailers pointed to fast-growing mid-sized and business-to-consumer (B2C) organizations as driving the most innovation in the commerce space according to 51 and 55 percent 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.
“As retailers look to innovate throughout 2015, a critical understanding of customer journeys can help identify new channels to pursue and how to best maximize investment,” said Steve Denton, vice president, marketing solutions, eBay Enterprise.
Forecasting Growth
Despite a complex retail environment, 75 percent of respondents noted a positive outlook on retail in 2015. A large majority of retailers surveyed (72 percent) anticipate online revenue to increase by 17 percent.
Confidence in commerce infrastructure is also high with 95 percent of respondents stating they are very or somewhat confident their e-commerce experience meets consumers’ needs and expectations. Retailers are planning on utilizing a rich ecosystem of partners to achieve their goals with a mix of up to nine technology, services, channel and consulting partners.
Online engagement emerged as the top area to fuel growth in 2015 (33 percent) followed by global e-commerce expansion (23 percent), mobile commerce (22 percent), digital targeting (22 percent) and product innovation (22 percent). Retailers are also planning to experiment with brick-and-mortar innovation in 2015, with initial investment in in-store experiences (14 percent), global brick-and-mortar expansion (12 percent) and pop-up expansion (11 percent).
Enabling Mobile Commerce
Among those investing in the mobile arena, mobile device optimization (54 percent) and mobile application development (46 percent) emerged as new priorities of investment (vs. continued areas of investment). Of those investing in mobile commerce, 51 percent of respondents plan on building a unique Android application and 50 percent plan on building a unique iOS application.
Cloud Investment
Cloud is also an increasing focus for retailers with 26 percent of large-scale retailers ($50 million to $250 million) claiming that the technology is critical to their company’s future growth. Additionally, 20 percent of large retailers claim that the cloud is the most important technology over other recent innovations.
In 2015, retailers plan on bringing e-commerce hosting (55 percent), inventory management (46 percent), marketing program management (40 percent) and customer relationship management (CRM) (40 percent) into cloud environments. Although cloud infrastructure is increasingly top of mind for retailers, top obstacles to adoption include security concerns (26 percent), shared resources (17 percent) and a lack of information technology (IT) support staff (16 percent).
“The distinct advantages of cloud, such as the ability to access unprecedented real-time data and flexibility, puts it on the short list of business transformation enablers for retailers looking to deliver the seamless experiences that today’s consumers expect,” said Craig Hayman, president, eBay Enterprise.
Global Opportunities
The 2015 Retail Growth Outlook revealed retailers’ optimistic stance on global expansion. Forty-seven percent stated they’re prepared for global expansion, with 73 percent 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 e-commerce localization was the top barrier to global expansion, and 87 percent 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 percent of respondents enlisting technology partners that provide solutions, 41 percent working with services partners to help optimize the business and 41 percent working with channel partners to help distribute products across retail networks.
“As retailers look to expand globally and more specifically capitalize on the thriving commerce opportunity in Asia, they often are intimidated by the complex cultural sensitivities and need to duplicate operations to serve the market,” said Tobias Hartmann, vice president, enterprise services and international, eBay Enterprise.
Managing Supply Chain and Staffing Concerns
Recent negotiations surrounding the West Coast port closures significantly impacted retailers’ strategic approach in 2015, with 43 percent recording delays in fulfilling consumer orders and 40 percent experiencing delays in available inventory. These closures created significant operational inefficiencies. Nearly a third of respondents stated they had to reroute inventory to the East Coast—39 percent of respondents noted their primary fulfillment is on the West Coast and 42 percent 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 percent plan on investing in e-commerce and marketing professionals with anticipated hiring peaks in Q2 and Q3 in advance of the holidays. Additionally, 52 percent of respondents plan on investing in customer service staff and 45 percent plan on investing in fulfillment staff.
“Retailers are continuing to deal with the ramifications of inventory delays from the West Coast port negotiations as evident by a prioritization in hiring fulfillment staff earlier in the calendar year,” said Tom Barone, vice president, omnichannel operations, eBay Enterprise. “As retailers continue to compete on shipping speed, fulfillment skills will be essential for both warehouse and brick-and-mortar staff.”
About the 2015 Retail Growth Outlook
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 1,011 online retail professionals. Respondents had e-commerce and online marketing responsibilities for online retailers at companies anticipating $3 million to $250 million in online revenue for 2015. The margin of error is ±3.1 percent. Data was collected from March 6, 2015, through March 15, 2015.
