Retailers Ramp Up Mobile Investment, E-Commerce Channels

Amid news that major retailers are closing U.S. stores and eyeing international expansion, growth strategies are top of mind for retail executives.

While our survey found that M&A will be a force in 2012, retailers are also looking inward to identify growth opportunities and focusing on e-commerce and mobile channels. In fact, more than a quarter of CFOs (29%) surveyed in our annual Compass Survey say that e-commerce and m-commerce will be their primary objectives for growth in the next year.

2011 has been a banner year for e-commerce. Online sales have seen double digit growth each quarter, and CFOs are bullish on strong year-end results for their e-commerce channels. Nearly half of CFOs (49%) expect more than 10 percent growth this year, up 44 percent from 2010 projections (34%). On average, retailers expect revenue from online channels to grow by 11.9 percent in 2011. Looking ahead, Forrester Research expects that the U.S. online retail industry will be worth $279 billion by 2015. Retailers are taking action to capitalize and will look to expand and improve e-commerce channels to attract shoppers in the coming year.

As mobile commerce revolutionizes the way consumers shop and pay, we polled CFOs to get their take on the channel. Despite comparison shopping apps that give consumers potentially competitive information, retailers overwhelmingly view mobile commerce as an opportunity (86%), as opposed to a threat (11%). CFOs at the top 100 largest retailers included in the sample are even more optimistic: 100 percent of the CFOs in that group expect to increase their mobile investment in the upcoming year. Overall, 54 percent of CFOs surveyed plan an increase in mobile commerce investment next year. As our Al Ferrara told Mobile Commerce Daily, “Most companies see mobile as a trend that is going to continue to increase and are jumping on the bandwagon to make sure their sites are well positioned to take advantage of the emerging market.”

One potential hurdle for retailers expanding e-commerce and m-commerce channels is Internet sales tax changes, but CFOs are feeling relatively well-positioned to handle the impact. Although more than 20 states are currently affected by Internet sales tax issues, just 12 percent of CFOs cite Internet sales tax issues as their greatest tax reform worry. Most CFOs (63%) do not expect Internet sales tax legislation to have a meaningful impact on their business.

Do you have plans to ramp up your e-commerce and m-commerce channels in the next year? What challenges are you facing?