Identifying ways to be more profitable with e-commerce is essential in the shift towards digital.
The digital landscape has undoubtedly been impacted over the past two years. Companies were forced to accelerate their digital capabilities—and now face the challenge of optimizing and refining their digital practices to scale. The expectation is that e-commerce is, and will continue to be, a greater share of commerce going forward, but more work needs to be done to increase profitability.
Organization decision-makers agree that:
Among those who have both e-commerce and brick-and-mortar operations, nearly half (46%) say that e-commerce is less profitable than brick-and-mortar. The largest-revenue companies ($5B+) are above average in saying that e-commerce is less profitable than their brick-and-mortar operations.
Being able to identify necessary improvements and actually investing in them are two different things. More than four in ten (44%) say their companies struggle here.
The sudden onset of the pandemic caused many to ramp up digital efforts in less-than-optimal ways.
Revenue tells a compelling story: roughly 20 percentage points separate those bringing in less than $750M in annual revenue from those earning $750M+ on finding it difficult to invest.
Decision-makers agree that they struggle to invest in necessary e-commerce improvements:
Digital customer experience and omnichannel commerce have the greatest potential to boost profitability.
When asked which investment areas are most critical to increasing profitability, digital customer experience and omnichannel commerce take the top spots. Supply chain modernization and marketing technology/data monetization form a middle tier (selected by roughly 4 in 10). Customer service, digital store, and strategy land at the bottom (cited by about 3 in 10).
A holistic omnichannel digital experience is the clear priority. Whether looking at short-term challenges or longer-term opportunities, decision-makers overall and across key groups gravitate towards investments in a holistic omnichannel digital experience.
Replatforming and expansion through marketplaces are top challenges today, with current investments backing this up. When taking a longer view of growth opportunities, expansion takes the top spot, followed by dynamic pricing and promotions.
Shipping optimization and offering multiple shipping options are top challenges today, supported by investments. Today, these are the top investment areas among those investing in supply chain modernization as well. Of note, micro fulfillment centers (MFCs) rank as the #3 challenge among decision-makers overall and #2 among those in the grocery sector.
Business intelligence and analytics are a top focus. From short-term challenges to longer-term opportunities, business intelligence and analytics are key. This investment area ranks in the top two among decision-makers overall and across key groups. Personalization often lands in second place as both a short-term challenge and an area where decision-makers are currently making investments—and a close third as a longer-term priority.
Self-service and chat are generally the most pressing. Whether looking at short-term challenges or longer-term opportunities, decision-makers overall and across key retail groups are keenly interested in self-service online customer support tools.
Modernizing POS is top-of-mind today. In the short term, decision-makers are focused on modernizing POS systems. Notably, new or larger/smaller store footprint designs rank as the third-most pressing challenge today and the second-greatest opportunity for future growth.
Digital-physical business model balancing, customer acquisition, and expansion are top areas of focus in both the near and long term. These challenges and opportunities line up with where decision-makers are actually making investments today: customer acquisition and expansion take the top-two spots overall, with optimizing the digital-physical split following closely in third place.
Publicis Sapient and Salesforce partnered with Ipsos, the third-largest research and insight company in the world, to conduct the Global Retail Decision-Makers survey. This study was designed to understand what retailers are prioritizing when it comes to e-commerce investments, as well as what steps they are taking to improve e-commerce profitability, and more. In this study, Ipsos surveyed approximately 300 retail decision-makers based in seven markets: United States, United Kingdom, Germany, Denmark, Norway, Sweden, and Australia.
Salesforce is the global leader in CRM, bringing companies and customers together in the digital age. Founded in 1999, Salesforce enables companies of every size and industry to take advantage of powerful technologies—cloud, mobile, social, voice, and artificial intelligence—to connect to their customers in a whole new way. Companies trust Salesforce to help them transform their businesses around the customer in this digital-first world. Salesforce Customer 360 is our vision for how we help customers with their digital transformations. With Customer 360, every team—sales, service, marketing, commerce, and beyond—can have a single, shared view of their customers on an integrated CRM platform powered by AI. This single source of truth enables employees to work together to build lasting, trusted relationships and deliver the intelligent, personalized experiences their customers expect. Salesforce is committed to a set of core values—trust, customer success, innovation, and equality of every human being. Salesforce is one of the leaders on Fortune’s “Change the World” list, and has been one of Fortune’s “100 Best Companies to Work For” for 14 years in a row. For more information, please visit www.salesforce.com.
Publicis Sapient is a digital business transformation company. We partner with global organizations to help them create and sustain competitive advantage in a world that is increasingly digital. We operate through our expert SPEED capabilities: Strategy and Consulting, Product, Experience, Engineering and Data, which combined with our culture of curiosity and deep industry knowledge, enables us to deliver meaningful impact to our clients’ businesses through re-imagining the products and experiences their customers truly value. Our agile, data-driven approach equips our clients’ businesses for change, making digital the core of how they think and what they do. Publicis Sapient is the digital business transformation hub of Publicis Groupe with 20,000 people and over 50 offices worldwide. For more information, visit publicissapient.com.