The 2020 eCommerce Organizational Benchmark Report · 2020. 8. 3. · THE 2020 ECOMMERCE...

The 2020 eCommerce Organizational Benchmark Report6 ways companies are shifting their organization, hiring and investments to win in an omnichannel world

2THE 2020 ECOMMERCE ORGANIZ ATIONAL BENCHMARK REPORT

Introduction

The past decade has seen radical shifts in consumer behavior driven by digital technologies that have transformed every facet of our lives, from how we are entertained (Netflix) to how we get our news (Facebook, Twitter) and how we connect with loved ones (FaceTime). Perhaps no consumer behavior has seen as much transformation,

however, as the most mundane of all — shopping. As we enter 2020,

online shopping continues to be central to shoppers’ routines, a trend

that is only set to be magnified by the current COVID-19 pandemic

crisis. 49% of US shoppers 18+ prefer to shop for and buy products

online, and 77% of all shoppers say online shopping is a consistent

or occasional part of their shopping routines (ShopperScape®, Online

Shopping Survey, 2020).

In 2019, retailers upped their game in trying to capture this digital

spend. Amazon made major investments in grocery delivery and

grocery stores. Walmart and Target ratcheted up their online-to-store

fulfillment services, mirroring a model Europe has had in place for

years. Amazon Prime membership reached 150 million subscribers,

driven by global expansion.

It’s with these developments as a backdrop that Profitero and

Kantar joined together to conduct our fourth annual eCommerce

organizational benchmark survey.

Research methodology

Profitero and Kantar conducted an online survey of brand manufacturers to determine

their top organizational priorities, challenges, hiring plans, and more as they relate to

eCommerce. The survey was fielded from September to December 2019. Responses

were collected from a total of 196 respondents.

While the majority of respondents were from North America, we also had participation

from Europe, Asia, Latin America, and Africa. Respondents were from companies of

all sizes and all industries, including apparel/footwear, baby, beauty and cosmetics,

beverage/alcohol, DIY/tools, electronics, grocery/food, home goods, office supplies,

pet supplies, pharmacy/health & wellness, sporting goods, and toys.


In the face of increasing complexity and competition,

few organizations feel like they are in a position

to win in eCommerce. Just 17% of brand leaders

surveyed believe their companies are ahead of the

curve when it comes to organizing for eCommerce.

The vast majority (71%) report they are merely

keeping pace or catching up.

Despite being vocally supportive of eCommerce,

C-level executives are not doing enough to set a

clear strategy for their organizations, leading to

“channel silos” and confusion about job roles and

responsibilities. Our survey revealed that 40% say

their organizations lack concrete goals or measurable

objectives for eCommerce. Only 11% of respondents

say that each functional team in their organization has

specific eCommerce goals built into strategic growth

plans and KPIs.

Six trends emerged from this year’s study, which included feedback from nearly 200 brand professionals:

Half of respondents (50%) rank handling challenging

pricing and profitability scenarios as their top

eCommerce challenge. However, most organizations

are trying to force fit offline strategies into the online

world, which is only making channel conflict and

profitability issues worse. One-quarter of respondents

(25%) report their organizations lack a dedicated

eCommerce assortment strategy, while 38% report

they are simply adapting their offline assortment for

eCommerce. Nearly one-third (32%) report that they

have yet to develop an eCommerce-specific pricing

strategy.

Supply chains are not getting enough investment

to keep pace with the complexity of meeting

omnichannel demand, creating real risk that can

already be observed with the current pandemic.

For example, 41% of respondents don’t have a

specialized team or set of processes for managing

their eCommerce supply chain, relying on those used

to manage brick-and-mortar.

Executive summary

Organizations have invested more in product content

than any other area of eCommerce, but still struggle

to achieve quality over quantity. Our survey showed

that 60% of companies have only basic content and/

or basic + enhanced for top SKUs; only 15% are

optimizing content to lift sales.

The true promise of using data and analytics to

drive sales growth remains elusive; most organizations

are simply using data to “report the weather.” 61%

of respondents surveyed are accessing sales and

share data only for their retailer websites and are not

investing in digital shelf or shopper panel data to

understand how to optimize opportunities. Only 8%

are applying predictive analytics in their eCommerce

business.

1 3 5

62

4

Key findings


1. eCommerce has become more complex, and organizations are feeling the burdenJust 17% of brand leaders we surveyed believe their

companies are ahead of the curve when it comes to

organizing for eCommerce. The vast majority (71%) report they are merely keeping pace or catching up.

This feeling of treading water is not surprising given

the increased complexity of eCommerce. There

are more online retailers and more challenges as

eCommerce organizations shift from siloed efforts to

integrating across the organization. The proliferation

of eCommerce marketplaces and the challenges of

dealing with third-party sellers also have contributed

to the complexity. Retailers are expanding their

revenue streams, including service areas like

sponsored paid search and media, to continue

growing. Digital pure players continue to emerge,

putting pressure on incumbent brands. Essentially,

the bar has never been higher for expertise on the

manufacturer side.

Q: What’s your maturity level in terms of organizing around eCommerce?

Just starting to operationalize and participate in eCommerce

Source: Kantar/Profitero 2019 eCommerce Benchmarking survey

Strong focus on eCommerce but still catching up to competition

Strong focus on eCommerce and keeping pace with the competition

Ahead of the curve and leading in eCommerce vs. the competition

Don’t know / not applicable

11%

35%

36%

17%

1%


2. Leadership must do more to set a clear eCommerce strategy and clarify ways of workingTo understand why organizations are feeling behind

in eCommerce, look no further than the leaders. Our

survey shows that many organizations lack a true

strategy for integrating eCommerce into the overall

organizational structure and job responsibilities of

everyone in the company.

• While 40% of respondents report that leadership

has made eCommerce a stated priority for their

organization, they acknowledge that no concrete

goals or measurable objectives have been set

beyond that.

• Just 11% of brand respondents report that each

functional team within their organization has

specific eCommerce goals built into their strategic

growth plans and KPIs.

Since eCommerce touches every aspect of the

organization, cross-functional buy-in is essential;

however, many eCommerce teams are hitting a wall in

gaining the support they need from cross-functional

partners. As one survey respondent put it, “Our

biggest challenge is gaining buy-in from stakeholders

that don’t see direct impact from eCommerce; i.e.,

product marketers responsible for updating content.”

Q: In the area of eCommerce strategy & leadership, how would you rate your organization’s capabilities/approach?

NOVICELeadership has articulated that eCommerce is a strategic priority

ADVANCED Measureable eCommerce goals established and actively tracked

EXPERT eComm goals aligned with core customer strategies and a focal point for key customer interactions

LEADER eComm fully embedded in broader company growth strategies and across all functional plans


40%

19%

24%

11%

6%



3. The challenges of managing profitability and supply weigh heavily on brands50% of respondents rank handling challenging

pricing and profitability scenarios as their eCommerce

top challenge.

After pricing and profitability, 40% of respondents

say that adapting the existing supply chain to fit

eCommerce demands is their next top challenge.

Less of a challenge for brands is the ability to get

approval for eCommerce budget or the ability to

hire, suggesting that most organizations are past the

early stages of trying to make a business case for

eCommerce and are now dealing with the much more

mature issue of competing in the channel.

Q: What are the top challenges that you have around organizing for eCommerce? (Rank top 3)

Handling challenging pricing and profitability scenarios

Adopting existing supply chain to fit demands of eCommerce

Finding more effective ways to partner with retailers to drive sales

Attribution for online influence on offline sales

Measuring the return on investment in eCommerce

Securing incremental, dedicated headcount

Establishing a clear and well-understood eCommerce strategy

Getting budget approval

50%

35%

28%

40%

34%

21%

16%

32%



3. The challenges of managing profitability and supply weigh heavily on brands (continued)The survey also reveals that most organizations are

trying to force fit offline strategies into the online

world, which is only making channel conflict and

profitability issues worse. One-quarter of respondents

(25%) report their organizations lack a dedicated

eCommerce assortment strategy, while 38% report

they are simply adapting their offline assortment for

eCommerce.

Q: In the area of eCommerce assortment & innovation, how would you rate your organization’s capabilities/approach?

NOVICEDo not have a dedicated eCommerce assortment strategy

ADVANCED Adapt our assortment to meet the requirements or trends for eCommerce

EXPERT Dedicated product strategy and innovation process focused on eComm

LEADER Dedicated product strategy and innovation process focused on distinct eComm retailer and fulfillment models


25%

21%

38%

13%

6%



3. The challenges of managing profitability and supply weigh heavily on brands (continued)Nearly one-third (32%) report that they have yet to

develop an eCommerce-specific pricing strategy,

while only 15% of brands have implemented legal

(minimum advertised price, or MAP) policies to

protect themselves from extreme price discounting

by online retailers and marketplace sellers.

As retailers continue to use algorithmic-based

methods to match prices, the lack of eCommerce-

specific price and promotion strategies will expose

companies to lower profitability.

“We lack policy enforcement from sites like Amazon

and eBay, allowing undercutting of prices, old

inventory, and misrepresentation of our brand.”

— Survey respondent

“Operations product configuration is our next big

challenge. Creating items that leverage eCommerce

cost structure to be optimized for profitability.”

— Survey respondent

Q: In the area of eCommerce price & promotion management, how would you rate your organization’s capabilities/approach?

NOVICENo eCommerce-focused pricing strategy

ADVANCED eCommerce integrated into cross-channel pricing strategy

EXPERT Have integrated digital promotions into cross-channel pricing and TPM/TOP processes

EXPERT Have a MAP/eMAP policy

LEADER Have dedicated focust at the channel level for brand protection, MAP enforcement or promotional effectiveness


32%

8%

18%

15%

17%

10%



4. Supply chain is underfunded relative to the complexities of managing omnichannel demandThe current pandemic has revealed just how sensitive

supply chains (both online and brick-and-mortar) can

be to volatility in consumer demand.

Our survey found that, on the whole, most

organizations haven’t invested enough to specialize

and upgrade their supply chains to meet the complex

needs of eCommerce, where inventory must be both

shipped and ready to meet demand from consumers

ordering online and picking up in store.

For example, 41% of respondents don’t have a

specialized team or set of processes for managing

their eCommerce supply chain — a concerning gap

considering the influence supply chain has on both

top-line sales (by preventing out-of-stocks) and

bottom-line profitability (driving efficiency).

Q: In the area of eCommerce supply chain & fulfillment, how would you rate your organization’s capabilities/approach?

NOVICEeCommerce supply chain is managed by a fulfillment generalist

ADVANCED eCommerce supply chain has dedicated management and prcoesses

EXPERT eComm supply chain has dedicated mgmt. and is highly responsive to customers, with active anticipation of out-of-stocks

LEADER eComm supply chain has dedicated mgmt. and is exploring new, innovative logistics models (e.g., drop ship, back haul)


41%

15%

21%

12%

11%



5. Organizations are struggling to do little more than tackle the basics when it comes to contentMore than half of survey respondents (51%) have

digital asset management/product information

management (DAM/PIM) solutions for managing

content, making it one of the most widely used tools

that organizations invest in, trailing only retailer sales

and share measurement systems. (See next page).

Despite these tools to make content management

more efficient, most brands are doing little to

optimize their content to ensure it is outpacing the

competition. Only 37% of survey respondents are

actively benchmarking and optimizing content for

greater sales impact; while only 15% are optimizing

content to lift sales.

Q: In the area of eCommerce content management, how would you rate your organization’s capabilities/approach?

NOVICEBasic content in place across most/all SKUs on retailer sites

ADVANCED Basic SKUs in place and aligned to industry/retailer best practices and enhanced content untilized for top SKUs

EXPERT All of the above plus active retailer site auditing to ensure compliance + benchmark vs. competition

LEADER All of the above plus analytical processes to identify content optimizations that drive brands sales lift


22%

22%

38%

15%

3%



5. Organizations are struggling to do little more than tackle the basics when it comes to content (continued)Despite the rising amount of budget that brands

are investing in sponsored advertising (especially

on Amazon), only 26% of organizations have

implemented programmatic search/media

optimization tools, showing that most organizations

still believe “content” is king.

There is still a large gap (12 ppts) between

organizations that have DAM/PIM systems and

digital-shelf/e-store auditing solutions, further

reinforcing the point that the goal with content is

just to get it out there, not so much to know if it’s

good.

Q: Does your organization have any of the below types of systems in place?

Account specific sales/share measurement

Content/asset mgmt. (PIM/DAM)

Pricing/MAP monitoring

Total market eCommerce sales & share

Ratings/review syndication

Where to buy or distributed commerce

Digital shelf/e-audit

Content syndication

Programmatic search/media optimization

Shopper behavior panel

None

65%

49%

39%

51%

47%

37%

36%

26%

19%

9%

39%



6. The power of data and analytics is not being fully leveraged to grow salesSimilar to content, most organizations are struggling

to get past the basics when it comes to their

eCommerce data and analytics strategy. Mostly, data

is being used to “report the weather” instead of

finding opportunities for optimization and growth.

• 61% of respondents surveyed are accessing

sales and share data only for their retailer

websites and are not investing in digital-shelf

or shopper panel data to understand how to

optimize opportunities.

• Only 8% are applying advanced analytics to

their eCommerce business, creating models

to understand the impact specific levers are

having on sales and predict where investment

is needed. Multiple respondents in our survey

cited the need for better forecasting methods for

Amazon, given the unpredictability and volatility

of demand.

• Getting a unified view of performance that

captures the many fragmented channels

of eCommerce remains elusive. As one

survey respondent put it: “Having a reliable

measurement approach for eCommerce,

including direct ship, click-and-collect, and third-

party delivery, has been really elusive. It is hard

to manage what you can’t measure accurately.”

Q: In the area of eCommerce data & analytics, how would you rate your organization’s capabilities/approach?

NOVICEAd hoc eCommerce sales performance tracking

NOVICE Ongoing eCommerce sales performance tracking

ADVANCED Ongoing sales tracking plus analysis of non-sales data sources (e.g., digital shelf, shopper panel)

EXPERT Ongoing sales tracking and integration of disparate data sets for advanced analytics

LEADER All of the above plus advanced analytics (e.g., predictive forecasting, causal analytics, regression modeling, etc.)


16%

21%

45%

3%

7%


8%


83%Account mgmt./sales 3% 15%

48%Search optimization, mgmt. 13% 39%

62%Digital marketing, media specialist

13% 25%

72%Content/digital merchandising

13% 15%

31%Capability management 16% 53%

51%Data analytics/insights 17% 32%

6. The power of data and analytics is not being fully leveraged to grow sales (continued)Most organizations are not sitting idly by, however.

They are looking to do more with data, as evidenced

by hiring plans for the coming year.

• 17% of respondents say their organization

is planning to hire more employees for data

analytics/insights, the #1 role planned for in

2020.

• 16% are looking to hire for capability

management in 2020. This role, which can vary

by organization, is commonly someone who is

responsible for bringing multiple eCommerce

tools and data sources together and who

oversees the overall building of a cohesive,

integrated tech stack for eCommerce needs.

Q: For which of the following roles does your company have dedicated eCommerce headcount?

Planned In place None

45%IT 11% 43%

55%Direct to consumer 10% 35%

51%eCommerce category mgmt. 12% 37%

56%Brand management 10% 34%

55%Supply chain 9% 36%

67%eCommerce GM/VP/Director 6% 27%

36%Shopper marketing 12% 53%


Create clear eCommerce KPIs and goals for everyone in the company. Removing silos across

business functions is critical to advance to the next

level of eCommerce. Organizations that will get, and

remain, ahead are those that employ eCommerce

across functions, including in annual business

goals with associated metrics, as well as those that

collaborate with their retail partners to co-develop

goals with regular discussions and updates. These

changes must be driven from the top down by the

highest levels of leadership. In short, CEOs must do

more than support eCommerce vocally; they have to

roll up their sleeves and implement it.

“Most manufacturers have fully embraced eCommerce as a strategic necessity, but still have a long way to go when it comes to integrating it into every facet of the business. It’s evident that CEOs need to be investing more to modernize their organizations for digital transformation and most importantly, doing more to include eCommerce in the job descriptions of everyone in the company.”

Keith Anderson SVP, Strategy and Insight,

Profitero

Start structuring now for omnichannel. Several

leading omnichannel retailers are expected to surpass

Amazon’s growth by 2025 according to Kantar retail

sales forecasts. Companies must exploit this and gain

share by building eCommerce capability (people,

process, technology, and data) outside of the Amazon

team and across every team and role that touches

the customer. Whether your company decides to

create an eCommerce center of excellence or roll

responsibilities into other similar disciplines, such as

shopper marketing, you should carefully consider the

strategic investment and output implications. There’s

no one-size-fits-all approach; different models will

work for different companies.

1 2

Raise your organization’s eCommerce IQ. To build

their eCommerce capabilities, organizations will

need to invest in eCommerce training. This will help

manufacturers solve two pain points: hiring people

from within into eCommerce roles and retaining

talent in a highly competitive marketplace. Training

is critical to convert novices to intermediates and

intermediates to experts. Leaders in this space are

partnering with industry experts to create educational

content that is updated regularly to reflect evolving

eCommerce opportunities and that is standardized

around company-specific language and frameworks

to ensure consistency.

3

Key implications & takeaways



How to align eCommerce KPIs to people


Brand managerReview monitoring

Revenue mgmt.Pricing monitoring &

profitability

Supply chainOut of stocks

R&DRatings & reviews,

monitor competitors

Digital content Content compliance &

benchmarking, conversion

Trade mktg. / merch.Traffic & conversion,

sales lift

Consumer relationsRatings & reviews

Agency / mktg.Visibility

(share of search)

eCommerce managerSales & market share growth, scorecarding

Sales / account mgmt.Protect Buy Box


4 5 6

Make smart hiring investments. With a pandemic

underway and recession looming large, organizations

may slow hiring in 2020; however, be sure not to

starve the business, especially as online continues

to grow faster than brick-and-mortar. Many

organizations struggle to understand optimal

eCommerce staffing levels. A simple benchmark to

get a better understanding of staffing growth is to

use relevant KPIs for your category, such as eCAGR,

as a guidepost for the direction and approximate size

of team expansion. Another benchmark is looking

at how your industry peers are staffing and where

they are planning to hire more. (For many, data and

analytics is a key area of investment.)

Stop applying offline tactics to online assortment, pricing and promotion. Price compression has

created enough pain for leading manufacturers

to develop a dedicated eCommerce channel

assortment, pricing, and promotion strategy,

taking into consideration online category shopping

dynamics, competitive positioning, shipping

economics, margin, promotional strategy, and cross-

shopping (online and in-store) incentivization, among

others. Identify SKUs and promotion strategies that

maximize online margin and reduce the algorithm-

based price-matching death spiral that results from

reapplying offline strategies.

Stop managing and start optimizing. The growth

potential of eCommerce is huge, and while it’s easy

to think that there will be enough pie to go around,

the competition for that pie is also increasing. To gain

share, organizations must shift their mindsets from

managing the business to optimizing it. This starts

with organizations beginning to scrutinize where

they are focusing their time and efforts and to what

end. In the area of content, for example, too much

time is spent trying to perfect every product page

across every retailer site versus developing the very

best content for the most important products. When

it comes to data, organizations are too focused on

understanding what happened versus what to do

next. In 2020 and beyond, the winning companies

will be those that go beyond the basics.

Key implications & takeaways (continued)


“While most organizations continue to prioritize eCommerce and employ solid strategies to build their businesses, there are several key areas that they can better embrace to reach the next level of growth. The key question now is what does ‘advanced eCommerce’ look like, and what will it take to achieve this?”

Rachel Dalton Director of eCommerce and Omnichnannel Insights,

Kantar

Profitero is the eCommerce performance analytics platform of choice for

4,000 brands around the world, including Adidas, Abbott Laboratories,

General Mills, L’Oreal and Molson Coors. With Profitero, brands can

measure their digital shelf performance across 8,000+ retailer sites and

mobile apps in 50 countries, gaining actionable insights to improve

product content, search placement, ratings & reviews, availability,

assortment and pricing. Profitero also allows brands to measure their

Amazon sales & share performance, and is the only solution that can

correlate Amazon sales & share performance with changes across the

digital shelf.

Kantar is a global specialist growth consultancy. With over 1,000 analysts,

thought leaders, software developers and expert consultants, Kantar

helps our clients develop and execute brand, marketing, retail, sales and

shopper strategies to deliver growth. Kantar tracks 1,200 retailers globally,

has purchase data on over 200 million shoppers, and forecasts social,

cultural and consumer trends across the world.

ContactFor more information, email [email protected]

or visit profitero.com.

For additional guidance, contact Profitero today at:

(U.S.) +1 844 342 7464 (U.K.) +44 208 123 3101

Additional resources 6 ways companies are shifting their organization, hiring and investments to win in an omnichannel worldView on-demand webinar

How to resource and staff for eCommerce success

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The eCommerce Profitability Challenge: How to think about Channel Strategy, Product Assortment and Negotiations to strategically win onlineView on-demand webinar

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