Online retailers continue to invest but are still avoiding mobile: Survey

A new Forrester Research report shows nearly 50% of online retailers plan to continue to invest in their eCommerce platform to win new sales, gain new customers and expand their operations, but poor quality and expensive content management systems and lack of mobile commerce investment are holding them back.

Forrester Research senior analyst Steven Noble says the report shows how businesses are committed to expanding their online operations.

“What we found is that for the majority of online businesses, the investment in their online platforms is significantly increasing. Only 2% are decreasing their investment, and we think investment in this basic commerce platform is a key priority.”

The survey, which interviewed 334 Australian online businesses, found 53% said their basic eCommerce platform is their key investment priority over the next year, while 48% are increasing their investment in eCommerce technology. About 21% are “significantly increasing” their investments.

The survey also found businesses need to invest due to overwhelming demand. About 50% of online retailers are replacing their eCommerce platform or intend to do so within the next 24 months to upgrade their systems as they grow.

“Retailers that began selling online with little thought about what technology they’d need to sustain growth are feeling the limits imposed by their current platforms,” the survey found.

But there are still major problems preventing online retailers from expanding online. Many are using inferior content management systems, resulting in 43% saying this will be a key investment area in the year ahead.

The survey found these content management systems are actually preventing retailers from moving online, resulting in them in having to spend large amounts of money purely to sell their products over the internet.

“Managing content with subpar tools is costly and difficult, especially for retailers with deep sites, multiple brands, targeting and rich content. Rip Curl does not sell its entire product range online in large part for this reason.”

“This task is made more difficult by the combination of options that online retailers need to understand and navigate, from eCommerce platforms to web content management, product content management, and digital asset management solution.”

Retailers are also avoiding some types of investment. About 19% of retailers are investing in mobile apps, while only 15% of sites are investing in developing mobile sites.

“Despite the interest in mobile commerce, few Australian retailers plan to invest in mobile commerce technology in the year ahead. Of those that have acted to support mobile already, the most common approach has been to optimise their websites for access via mobile,” the survey found.

Many are also avoiding the use of digital media to sell products on their site, even though the study shows the use of digital media, like product photos, to be extremely effective in driving sales.

About 46% of retailers said using product pictures had the greatest impact in selling products, while the next biggest driver, video, was only beneficial to about 15%. However, many retailers were largely apathetic, with 37% saying they hadn’t invested any time or effort into producing pictures, video or new interactive features on their sites.

Only 2% said they used 3D product views and other “rich media tools”, while only 2% implemented any sort of comparison feature to show products side-by-side.

Nevertheless, Noble says the report shows the online retail business in Australia is continuing to gain steam and the challenge now is to juggle high demand with a quality site that doesn’t break down.

“Most retailers are keenly aware of the improvements they can be making in their business. From here it’s a process of just managing how they can rapidly increase their business and keep investing, and making sure they don’t lose any sort of steam in the process as they expand.”