Survey: Retail execs embrace omnichannel
New York -- Looking to better respond to increasingly online and mobile customers, 70% of retail executives said their organizations have adopted an omnichannel strategy to link the consumer's in-store experience with the company's website, mobile device application and social media platforms. This strategy, according to the 2014 Retail Outlook Survey of 100 retail executives by KPMG LLP, will help create a seamless shopping experience for the consumer.
According to the survey, 53% of executives in the retail sector feel that they are ahead of their peers when it comes to omnichannel adoption. When asked which three channels they have increased spending on in 2014, executives cited their company website (67%), physical/permanent stores (47%) and social media platforms (46%) as the most important areas.
Adopting an omnichannel business strategy may be costly, however. Fifty-three percent of retail executives surveyed stated that the cost and complexity of technology upgrades were one of the main challenges their organizations faced.
Cyber security is also a rising issue. Currently, 77% of executives surveyed say that their companies share customers' personal and payment information across their channels to make for a more seamless shopping experience.
Also, 70% of executives identify customer retention as the most significant driver of revenue growth during the next one to three years. Forty-two percent of retail executives say that operational efficiencies and applicable technology updates have consumed and will continue to consume the most time for senior leadership in 2014. Nearly three-quarters of the executives surveyed have increased spending in their technology capabilities and new products or services.
According to the survey, an overwhelming majority of executives agree that they are at least on par with risk management in comparison to their peers (87%). Despite this, however, there are many pressing challenges that retail executives have identified as obstacles for the remainder of 2014 and beyond.
Forty-one percent of executives cited the Affordable Care Act as a high-priority compliance area that their organization has begun to address and will continue to address in 2014. Thirty-four percent stated payment card industry compliance is the next highest priority, followed by federal and state tax changes (29%).
Forty-one percent of executives surveyed stated that losing share to lower-cost competitors is the top threat to their organization's business model. In relation to lower-cost competition, while 36% said that discounting and other sales incentives have had and will continue to have the greatest negative impact on their company's profit margins during 2014.
"Consumer preferences have evolved, and the omnichannel approach has become an imperative for organizations to provide their customers with the shopping experiences they demand," said Mark Larson, KPMG's U.S. and global retail sector leader. "Organizations that have adapted well to the rise of e-commerce, customer mobility and other technological disruptions of the last decade are showing some early signs of breaking away while others are still near the starting line. Regardless of where they are in the process, one thing is clear – retailers have acknowledged the shopping habits of today's consumer and they are making transformational changes to embrace them."