RSR Research: How Retailers Are Investing in Online Technologies
Through a special arrangement, presented here for discussion is a summary of an article from Retail Paradox, Retail Systems Research's weekly analysis on emerging issues facing retailers.
According to our recent study on eCommerce, Online Commerce in 2009: The Game Has Changed - Have Retailers?, practicality and feasibility permeate our retail respondents' thinking around investing in new online technologies. They are focused on the tools that provide the insights (and core operability) to hone the basics of online retailing: determining who is shopping the site; what general patterns emerge from their overall behavior; and insuring availability of cheap and easy recommendations and reviews to help sway and connect shoppers with products.
In the responses, site analytics (63 percent), product recommendations (59 percent), and site performance monitoring (46 percent) are highly prized. User tagging for personalization purposes and product reviews also hold significant interest (44 percent of the total pool assign "very valuable" status to each).
Retailers have consistently been leveraging the easiest-to-implement systems, like site analytics (75 percent already have basic systems in place, including such tools as Google analytics). Further, roughly half of our retail respondents have already folded in site performance monitoring, product recommendations and product reviews. These tools are now table stakes for an effective, operative site.
More budgetary dollars are allocated for mobility than any other technology. Sixty percent of respondents reported that mobile applications remain a big untapped opportunity for their companies. Twenty percent have discretionary dollars set aside for development of a mobile (WAP) site, while an additional 20 percent have funds allocated to developing mobile applications. Another 43 percent have plans in place awaiting funding. While few are willing to bet the farm on how shoppers will really use online communities and social networks, a safe bet is that consumers will appreciate the ability to shop from wherever they happen to be - in a store, in an airport, or in an airport store.
Some notable differences by performance, revenue, and percentage of goods sold online included in the report:
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Pure-play retailers have more plans (though still no budget) to examine social networking opportunities than any other group (50 percent vs. six percent of mixed-model and 16 percent of multi-channel retailers);
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Nearly half (47 percent) of multi-channel retailers have no plans to utilize employee or corporate Twitter accounts in any way;
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Pure-play and mixed-model retailers are already far more invested in call center/CRM solutions than are multi-channel retailers (50 percent and 47 percent, respectively, vs. multi-channel retailers' 25 percent). This represents a viable opportunity to steal away market share based on an enhanced service model;
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Mobile is the domain of Retail Winners - 22 percent of Winners have budget allocated for new mobile applications, while 24 percent have budget set aside for mobile sites.
Discussion Questions: What do you think should be the key focus for retailers, in time and money, around e-commerce? What investments will provide the most near-term ROI? Which ones are necessary for long-term ROI?