The State of Retail Online 2016

The latest State of Retailing Online (2016) has been published, exploring key metrics, priority initiatives and mobile benchmarks among US ecommerce leaders.

Produced annually in partnership between and Forrester Research, The State of Retailing Online (SORO) study is highly anticipated research that brings details of all aspects of e-commerce to the digital retail community.

Sucharita Mulpuru-Kodali, vice president and principal analyst at Forrester Research shared some key takeaways on the study’s findings.

She said, “Digital retail continues to be strong but there were some highlights to note. First, growth rates appear to be slowing a bit. In the past there were many retailers experiencing high double-digit growth, and now there are fewer retailers reporting that level of really fast growth.”

Importantly, the growth in tablets also seems to be slowing down. Much of that likely is attributable to the fact that there hasn’t been lots of innovation in tablet devices and the innovation in mobile has been more in the “phablet” sector, which has been where the device growth has been. And that is why the smartphone numbers are bigger, because phablets are classified as phones.

Marketing costs per order and new customer acquisition costs per order were up in 2015 for over 40 per cent of retailers surveyed, which is becoming a chronic issue.

Mulpuru-Kodali said, “Google keeps making more money every year and they are the biggest sector of web marketing spend. That means retailers are paying Google more every year. Certainly companies look to diversify their spend into programs like remarketing and social, but the cost per order for those tactics isn’t better than Google, so we don’t have a really great cheap tactic to replace Google at the moment. Retailers need to work on retaining their best customers and focus on customer retention more than customer acquisition if they want to reduce marketing costs.”

Mobile has remained a huge focus for retailers, but the results from the survey suggests that their spend and employee dedication is not that high. Mulpuru-Kodali suggests that this means that retailers are doing other things like digital transformation efforts of which one beneficiary is their mobile strategy.

Retailers are investing in responsive design, or are working with third party agencies. They are less likely to be investing heavily in apps or trying to craft entirely new mobile experiences as they recognize that mobile for most is an extension of other channel touchpoints and needn’t be a completely separate, expensive solution. Ultimately, it’s about the entire customer journey, and that means more than just mobile.

Omnichannel, for retailers that are investing in it, is still about inventory seamlessness through programs like in-store pickup and ship from store. Retailers that don’t have those efforts in place should put them in place; if a company has them established and has optimized them as well as they can be, it may be time to also start tackling other omnichannel efforts like e-receipts or remote customer service in stores.