With the pace and complexity of operations in digital retail rising rapidly, most brands feel inadequately prepared to deal with new digital disruption challenges—fewer than half of retailers believe they can effectively manage all aspects of their digital operations over the next twelve months, new survey research from next-gen industry insights firm Incisiv finds.
The firm’s newly released report, Digital Complexity: Thriving in Unpredictable Times, based on findings from a survey conducted in partnership with Fluent Commerce, commercetools and Contentstack, also reveals that retailers expect major increases in operational requirements around fulfillment and digital-related functions in 2023.
“As digital demand regresses to the mean, and with increasing macroeconomic uncertainty, the fight for the shopper dollar will intensify over the next 12 months,” said Gaurav Pant, chief insights officer at Incisiv, in a news release. “Delivering on the fundamentals of inventory availability and anywhere fulfillment is critical and there is still a lot of work to be done in this area. Building a personalized and relevant shopper experience is where the leaders are focused.”
To adapt accordingly, retailers need to focus on the capabilities that impact them the most and must upgrade omnichannel capabilities, specifically in areas of digital fulfillment, content management, and personalization.
Key findings of the research include:
Retailers expect the complexity of their digital operations to increase over the next 12 months
- 81 percent of retailers expect their product returns to increase
- 69 percent of retailers will increase their online SKUs
- 67 percent of retailers will increase the number of digital assets they utilize
- 65 percent of retailers expect the number of store fulfilled digital orders to increase
Most are underprepared to effectively manage them
- 46 percent of retailers stated they will be effective in managing the growth of their product returns
- 43 percent of retailers stated they will be effective in managing their online SKU growth
- 32 percent of retailers stated they will be effective in managing the variety of their digital assets.
- 35 percent of retailers stated they will be effective in managing their store order fulfillment
Retailers were forced to invest in commerce and fulfillment capabilities during the pandemic just to stay in business
Content and campaign management was given far less attention and now retailers must catch up. For instance:
- 39 percent of retailers stated their current store fulfillment platform will not meet their needs
- 40 percent of retailers stated their personalization platform won’t meet their needs
- 42 percent retailers stated their product catalog system won’t meet their needs
- 43 percent of retailers stated their content management system won’t meet their needs
“The stark reality of eCommerce marketing is that content is non-negotiable: to win and hold customer attention, content must be everywhere, and it must always be evolving,” added Neha Sampat, CEO at Contentstack, in the release. “Marketers need tools that support this reality, such as MACH-based technology that sets marketing departments up for speed, freeing teams from dependency on IT, and enabling agile, collaborative, and scalable processes.”
“In regards to fulfillment, two of the main challenges include inventory accuracy and fulfillment optimization,” said Jamie Cairns, chief strategy officer at Fluent Commerce, in the release. “What is the most effective way to solve both issues? With an order management system—one that is MACH-based, offers flexible fulfillment logic and workflows. Second, retailers need to have the ability to provide an accurate, near real-time view of inventory at scale.”
“There’s more to running a successful business than just ensuring you’re two steps ahead of having the products consumers want and need. They need the flexibility and scalability to provide the experiences customers want today, and tomorrow,” said Michael Scholz, vice president of product & customer marketing at commercetools, in the release. “Retailers need an agile and flexible commerce portfolio and an ecosystem of best-of-breed technology, such as MACH (Microservices, API-First, Cloud-Native and Headless) solutions. These enable businesses to unlock infinite opportunities, effectively tackle these new challenges and future-proof their business against changing market forces.”
Download the full report here.
Incisiv, Fluent Commerce, commercetools, and Contentstack conducted an executive survey with retail leaders to assess the state of digital complexity in the retail industry in the U.S., U.K., France, and Germany. The survey and analysis were conducted in Q2 and Q3 2022 and received over 350 responses. Nearly 9 in 10 (86 percent) of respondents were in director or above roles, including 41 percent of these in VP-level above. Executives from retailers with over $500M in revenue made up 82 percent of those interviewed.
