RSR ebook: Retail ecommerce in context: the next iteration

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Retail eCommerce In
Context: The Next
Iteration
RSR Benchmark 2021
Brian Kilcourse & Steve Rowen, Managing Partners
Sponsored by:

2
About RSR
• Founded in 2007 to quickly become the leading source of
insights for trends in retail technology, and retail in
general
• Mission: To elevate the conversation about retail
technology to a strategic level within the retail enterprise.
Our differentiators:
• Objective Insights into the business challenges and
opportunities that retailers are addressing in today’s
marketplace, and how Winners win
• Pragmatic Advice to both retailers and solution providers
• Extensive Retail Industry Experience
• A Deep Bed Of Research into retailers' technology
investment plans and the business opportunities and
challenges that drive those investments.

3
Respondent Profiles
RSR conducted an online survey in April 2021 and received answers from 105 qualified retail respondents. Respondent
demographics are as follows:
2019 Revenue (US$ Equivalent):
• Less than $50 Million 4%
• $50 - $499 Million 7%
• $500 - $999 Million 14%
• $1 - $5 Billion 36%
• Over $5 Billion 40%
Markets Served:
• USA 100%
• Canada 42%
• Latin America 22 %
• UK 19%
• Europe 20%
• Middle East 8%
• Africa 5%
• Asia/Pacific 15 %
Year-Over-Year Sales Growth Rates (assume average growth of 4.5%):
• Worse than average (“Laggards”) 8%
• Average 41%
• Better than average (“Retail Winners”) 52%

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Research
Overview
• After years of steady ecommerce growth, we have
seen an unprecedented acceleration of the shift
from physical stores to online shopping over the
past eighteen months
• The shift to digital-first happened across all
industries, creating competitive advantage for
some while leaving others scrambling
• Retailers are facing the limitations of their aging
technology stack in allowing them to offer buy
online pick up in store (BOPIS), social commerce,
adding new payment methods, launching
subscription programs and more
• Our goal in this study was to understand how well
retailers have been able to pivot to a digital-first
world, the challenges they face, the opportunities
nascent in the marketplace, and how their
technology portfolios are able to support these
shifts profitably

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So What Did We Find?
5

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Big Numbers
31%
20%
16%
13%
8%
12%
What Percentage Of Your Annual Revenue In 2020
Came From Digital Channel Sales?
More Than 50% Of
Total Revenue
41-50%
31-40%
21-30%
11-20%
0-10%

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Mature Technology Reigns
7%
28%
23%
42%
Less than 1 year
1-3 years
3-5 years
5+ years
How Long HaveYou Been UsingYour Current Ecommerce Platform?

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Retailers’
Sentiment Is
Continuously
Evolving
29%
38%
38%
41%
57%
50%
52%
40%
12%
10%
8%
17%
2%
2%
2%
3%
Delivering a more differentiated experience would allow us
to improve conversion rates
Supporting new digital touchpoints would allow us to attract
more customers
The ability to continuously innovate and rapidly test new
customer experiences would allow us to outpace the
competition
Improving the online checkout experience is a priority for us
To Which DegreeTo WhichYou Agree Or Disagree WithThe
Following Statements?
Strongly Agree Agree Disagree Strongly Disagree

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Q: Where Is The
Energy Coming
From?
A: Overperformers
27%
33%
33%
24%
31%
43%
47%
51%
Delivering a more differentiated experience would
allow us to improve conversion rates
The ability to continuously innovate and rapidly test
new customer experiences would allow us to
outpace the competition
Improving the online checkout experience is a
priority for us
Supporting new digital touchpoints would allow us to
attract more customers
Indicate The Degree To Which You Agree With The Following
Statements ('Stongly Agree')
Over-performers Average & Under-performers

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Winners Are
MUCH More
Confident, And
Will Reap The
Benefits In The
Form Of
Innovation
12%
12%
8%
14%
33%
36%
40%
49%
Ability to rapidly make changes to digital
experiences
Ability to measure the business impact of
commerce innovation (including A/B
testing)
Ability to deliver innovation at a low cost
Ability to accommodate new business
requirements
How Satisfied Are You With The Ability To Deliver
Commerce Innovation With Your Current Technology
Stack?
(Very Satisfied)
Winners Others

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11
Business
Challenges
External Forces
Pressuring Retailers

12
Customers Are Fully In Control
37%
29%
18%
33%
25%
45%
47%
65%
16%
18%
22%
33%
44%
49%
58%
60%
Our competition is doing a better job at addressing new consumer
demands, forcing us to innovate much faster than before
Increased competition has made it harder for our business to retain
customers
We can’t keep up with evolving customer expectations for new digital
experiences
Disruptions in the market are shifting more of our business to digital
channels faster than we anticipated
The intensifying need to deliver differentiated customer experiences in
digital channels
Market trends are prompting us to look for new business models that can
drive revenue growth
Consumers expect a more seamless experience across digital and physical
touchpoints than we are currently providing
Consumers demand more convenience in their shopping experience than
before, otherwise, they are more likely to abandon their purchase
TOP THREE (3) Business Challenges Currently Facing Your Company
Winners Others
And Winners Are
Much More
Aware

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As A Result,
Retailers Are
Zeroed In On
The Consumer
Experience
13%
22%
25%
31%
40%
47%
58%
64%
Reduce customer churn
Reduce cart abandonment rate
Lower customer acquisition cost
Reduce refunds by lowering return
rates
Improve overall profit margin
Increase customer lifetime value
Increase average order value
Improve customer satisfaction score
or experience measure
TOPTHREE (3) Commerce MetricsYou Would Like
To Improve InThe Next 12-18 Months

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14
Opportunities
What Can Be Done?

15
New Emphasis
18%
22%
14%
43%
45%
47%
25%
29%
31%
40%
44%
49%
More integration between social channels and our branded website
Delivering personalized content and offers to consumers
The ability to add new digital touchpoints where shoppers can purchase (social
platforms, smart devices, IoT, voice)
Improving site search and merchandising capabilities, including personalization
The ability to apply the same business rules (e.g., pricing, promotions) across all
touchpoints
Having a unified view of inventory availability, including delivery options
Please Select The TOP THREE (3) Opportunities You See To Improve
The Online Shopping Experience
Winners Others
Winners Get That They
Have To Be Everywhere
Consumers Are Now
Shopping

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Variations On A Theme
11%
46%
29%
15%
38%
50%
13%
38%
50%
27%
53%
40%
14%
42%
44%
Having a unified view of the customer across physical and digital channels to
create a seamless offline-to-online experience
Improving site search and merchandising capabilities, including personalization
The ability to apply the same business rules (e.g., pricing, promotions) across all
touchpoints
TOP THREE (3) Opportunities To Improve The Online Shopping Experience
All Respondents Fashion FMCG GM Hardgoods
Fashion retailers are officially now in their own unique world

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Not A Ringing Endorsement
14%
25%
29%
32%
28%
23%
25%
33%
47%
27%
27%
47%
13%
31%
25%
25%
23%
25%
25%
32%
Ability to rapidly make changes to digital experiences
Ability to measure the business impact of commerce innovation (including A/B
testing)
Ability to deliver innovation at a low cost
Ability to accommodate new business requirements
How Satisfied Are You With The Ability To Deliver Commerce Innovation With Your Current
Technology Stack?
('Highly Satisfied')
All Respondents FMCG Fashion GM Hardgoods

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The Focus Of Digital Commerce Investments
25%
36%
32%
30%
25%
40%
33%
36%
53%
50%
44%
56%
29%
31%
40%
Replace/replatform from existing commerce platform/technologies
Acquire additional commerce solutions/technologies
Increase investment in existing commerce platform/technologies
Please Rate The Likelihood Of Investment In The Following As Part Of Digital Commerce
Investment Plans For The Next 12-18 Months
('High Likelihood')
All Respondents FMCG Fashion GM Hardgoods
After a year like no other, FMCG is – for the first time – in position to be on the bleeding edge. Will they seize it, or just
count their profits and continue on with business as usual?

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19
Organizational Inhibitors
The Biggest Roadblocks Often Come From Within

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Old & Faithful Sentiments Apply: This Is
Difficult Work
15%
23%
24%
35%
37%
42%
43%
49%
The ROI for improvements is perceived to be too low
Lack of sponsorship/buy-in
Budget - insufficient capital available
The ROI for improvements is too difficult to determine
Business risk is perceived as too high to make changes
Lack of vision/roadmap
Lack of resources available for innovation
Our existing technologies are difficult to change
Top Organizational Inhibitors To Improving The Online Shopping Experience

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Experience Exposes Modern Realities For
Winners
29%
24%
8%
39%
39%
27%
43%
47%
43%
18%
22%
22%
31%
35%
38%
40%
40%
55%
Budget - insufficient capital available
Lack of sponsorship/buy-in
The ROI for improvements is perceived to be too low
The ROI for improvements is too difficult to determine
Business risk is perceived as too high to make changes
Lack of resources/bandwidth (in the face of competing priorities)
Lack of vision/roadmap
Lack of resources available for innovation
Our existing technologies are difficult to change
Top Organizational Inhibitors To Improving The Online Shopping Experience
Winners Others

22
It’s Going To Take Money To Fix This
31%
22%
18%
35%
37%
33%
27%
39%
57%
16%
16%
22%
31%
33%
33%
36%
51%
62%
An executive tasked with owning the customer relationship across all channels
Shifting the organization to a more agile approach
Establishing an innovation lab or team to test new ideas
Implementing a modern eCommerce platform or solutions
Effectively educating executives on the possibilities
More listening programs to collect customer sentiment
A clear omnichannel strategy and roadmap
Better customer insights to inform strategies
Investment in new technology applications and/ or infrastructure
The TOP THREE (3) Ways To Overcome These Inhibitors
Winners Others

23
23
Technology
Enablers
How Can Technology Help
Retailers Get Through?

24
A Snapshot For How Just How Much Shopping
Has Evolved
19%
25%
29%
34%
37%
39%
40%
44%
45%
50%
57%
41%
40%
53%
51%
40%
50%
47%
49%
32%
25%
34%
31%
13%
12%
22%
10%
8%
6%
18%
Conversational Commerce (Chatbots)
Installment plan payments/Buy Now Pay Later
In-store Kiosks
Social commerce
Personalized cross-sell/up-sell
Mobile self-checkout
One-click checkout
Contactless payments/ Digital wallets
Modern eCommerce platform
BOPIS/BORIS/Curbside pickup
What Is The Perceived Value Of The Following Technologies At Your Company?
High Value Some Value Little/No Value
Eighteen months ago, BOPIS and BORIS were nice-to-have technologies. Now they are table stakes. Nothing is as it
was anymore. Retailers MUST evolve to meet demand in this new reality.

25
The Picture
Takes Even
Further Shape:
Lots Of Change On The
Horizon!
21%
25%
25%
25%
28%
29%
31%
41%
45%
47%
16%
24%
29%
17%
14%
10%
17%
25%
20%
16%
14%
15%
15%
19%
10%
12%
11%
10%
8%
11%
12%
11%
9%
17%
11%
5%
16%
14%
12%
7%
37%
25%
21%
22%
36%
43%
25%
10%
14%
19%
Conversational Commerce (Chatbots)
Personalized cross-sell/up-sell
Social commerce
One-click checkout
In-store Kiosks
Installment plan payments/Buy Now Pay Later
Mobile self-checkout
Modern eCommerce platform
Contactless payments/ Digital wallets
BOPIS/BORIS/Curbside pickup
What Is The Current Status Of The Following Ecommerce Feature
Technologies At Your Company
Implemented & Satisfied Implemented but Planning a Change
Budgeted Project Planned/Not Yet Budgeted
No Plans

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Recommendations
For Retailers
• Address The Convenience
Factor
• Recognize That Modernizing
Legacy Technologies Is
Difficult… but…
• Do It Anyway
• Keep The Momentum Going
The detail behind these recommendations is in
the full report:
https://www.rsrresearch.com/research/retail-ecommerce-in-context-the-next-iteration

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Thank You!
info@rsrresearch.com twitter.com/rsrresearch facebook.com/rsrresearch/ RSR Research
https://www.rsrresearch.com/research/retail-ecommerce-in-context-the-next-iteration

RSR ebook: Retail ecommerce in context: the next iteration

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