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Consumer Brands Ramp Up Their E-Commerce Spends
Consumer brands are ramping up investment in their e-commerce platforms, with hopes of capitalizing on what eMarketer projects will be a $3.5-trillion market globally in 2019. New research from Profitero and Kantar Consulting reveals that 76% of brands are looking to accelerate their e-commerce investments.
A case in point is headcount. On average, brands surveyed by Profitero and Kantar have increased e-commerce staffing by 83% compared to a year ago.
The 2019 e-Commerce Outlook for Brands from Profitero and Kantar finds that a significant roster of companies, including Heineken, Duracell, Revlon and LVMH, have expanded their digital headcounts by as much as 500% or more over the past 12 months.
Up until now, said Profitero’s Andrew Pearl, “E-commerce teams typically have been largely under-resourced with existing staff having to cover a wide range of brand and category responsibilities. However, our research shows companies are waking up to the fact that this is no longer sustainable and are investing in dedicated specialists and teams to accelerate online growth.”
The increased investment in headcount coincides with investment in data analytics, “so that brands focus on priority actions and products and not waste these new resources,” he added.
Key findings from the 2019 study:
— Brands must act now to build digital capabilities, or risk being left behind. “76% of brands surveyed are increasing their investment in e-commerce, with 35% spending more than 10% of their channel revenue on digital tools, solutions and agency support.”
— The arms race for e-commerce talent will only intensify. “As demand for digital specialists outstrips supply, brands must invest heavily in training and development to bring new e-comm skills to the workforce and talent they already have.”
— Outsourcing some e-commerce functions is an effective way to get the job done. “Brands are leaning on agencies to fill resource gaps and support critical e-comm functions, especially in areas that require heavy specialization and are hard to build in-house.”
— 2019 is poised to be the Year of Data Analytics. “The rise of algorithmic-driven retail means data analytics is no longer a nice to have, but a central commercial function.”
— Retail price wars are weighing heavily on brands. “55% of brands peg pricing and profitability as their #1 e-commerce challenge to tackle, as Amazon on battles it out with other retailers to be lowest price. One way to deal with profitability pressures is through 1P/3P hybrid selling, which 55% of large brands and 74% of small brands are pursuing or considering.”
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