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The 2020eCommerceOrganizationalBenchmark Report6 ways companies are shifting their organization, hiring andinvestments to win in an omnichannel world

IntroductionThe past decade has seen radical shifts in consumerbehavior driven by digital technologies that havetransformed every facet of our lives, from how weare 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 trendthat is only set to be magnified by the current COVID-19 pandemiccrisis. 49% of US shoppers 18 prefer to shop for and buy productsonline, and 77% of all shoppers say online shopping is a consistentor occasional part of their shopping routines (ShopperScape , OnlineShopping Survey, 2020).In 2019, retailers upped their game in trying to capture this digitalspend. Amazon made major investments in grocery delivery andgrocery stores. Walmart and Target ratcheted up their online-to-storefulfillment services, mirroring a model Europe has had in place forResearch methodologyyears. Amazon Prime membership reached 150 million subscribers,driven by global expansion.Profitero and Kantar conducted an online survey of brand manufacturers to determineIt’s with these developments as a backdrop that Profitero andtheir top organizational priorities, challenges, hiring plans, and more as they relate toKantar joined together to conduct our fourth annual eCommerceeCommerce. The survey was fielded from September to December 2019. Responsesorganizational benchmark survey.were collected from a total of 196 respondents.While the majority of respondents were from North America, we also had participationfrom Europe, Asia, Latin America, and Africa. Respondents were from companies ofall 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.T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T2

Executive summarySix trends emerged from this year’s study, which includedfeedback from nearly 200 brand professionals:135In the face of increasing complexity and competition,Half of respondents (50%) rank handling challengingOrganizations have invested more in product contentfew organizations feel like they are in a positionpricing and profitability scenarios as their topthan any other area of eCommerce, but still struggleto win in eCommerce. Just 17% of brand leaderseCommerce challenge. However, most organizationsto achieve quality over quantity. Our survey showedsurveyed believe their companies are ahead of theare trying to force fit offline strategies into the onlinethat 60% of companies have only basic content and/curve when it comes to organizing for eCommerce.world, which is only making channel conflict andThe vast majority (71%) report they are merelyor basic enhanced for top SKUs; only 15% areprofitability issues worse. One-quarter of respondentsoptimizing content to lift sales.keeping pace or catching up.(25%) report their organizations lack a dedicatedeCommerce assortment strategy, while 38% report2they are simply adapting their offline assortment for6eCommerce. Nearly one-third (32%) report that theyThe true promise of using data and analytics toDespite being vocally supportive of eCommerce,have yet to develop an eCommerce-specific pricingdrive sales growth remains elusive; most organizationsC-level executives are not doing enough to set astrategy.are simply using data to “report the weather.” 61%clear strategy for their organizations, leading to“channel silos” and confusion about job roles andresponsibilities. Our survey revealed that 40% sayof respondents surveyed are accessing sales and4share data only for their retailer websites and are notinvesting in digital shelf or shopper panel data totheir organizations lack concrete goals or measurableSupply chains are not getting enough investmentobjectives for eCommerce. Only 11% of respondentsunderstand how to optimize opportunities. Only 8%to keep pace with the complexity of meetingare applying predictive analytics in their eCommercesay that each functional team in their organization hasomnichannel demand, creating real risk that canbusiness.specific eCommerce goals built into strategic growthalready be observed with the current pandemic.plans and KPIs.For example, 41% of respondents don’t have aspecialized team or set of processes for managingtheir eCommerce supply chain, relying on those usedto manage brick-and-mortar.T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T3

Key findings

1. eCommerce has become more complex, andorganizations are feeling the burdenJust 17% of brand leaders we surveyed believe theircompanies are ahead of the curve when it comes toorganizing for eCommerce. The vast majority (71%)Q: What’s your maturity level in terms of organizing around eCommerce?Source: Kantar/Profitero 2019 eCommerce Benchmarking surveyreport they are merely keeping pace or catching up.This feeling of treading water is not surprising giventhe increased complexity of eCommerce. There11%Just starting to operationalizeand participate in eCommerceare more online retailers and more challenges aseCommerce organizations shift from siloed efforts tointegrating across the organization. The proliferationof eCommerce marketplaces and the challenges ofdealing with third-party sellers also have contributedStrong focus on eCommercebut still catching up tocompetition36%to the complexity. Retailers are expanding theirrevenue streams, including service areas likesponsored paid search and media, to continuegrowing. Digital pure players continue to emerge,putting pressure on incumbent brands. Essentially,Strong focus on eCommerceand keeping pace with the35%competitionthe bar has never been higher for expertise on themanufacturer side.Ahead of the curve andleading in eCommerce vs.the competitionDon’t know / not applicable17%1%T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T5

2. Leadership must do more to set a clear eCommercestrategy and clarify ways of workingTo understand why organizations are feeling behindin eCommerce, look no further than the leaders. Oursurvey shows that many organizations lack a truestrategy for integrating eCommerce into the overallorganizational structure and job responsibilities ofeveryone in the company. While 40% of respondents report that leadershiphas made eCommerce a stated priority for theirQ: In the area of eCommerce strategy & leadership, how would you rate yourorganization’s capabilities/approach?Source: Kantar/Profitero 2019 eCommerce Benchmarking surveyN OV I C E40%Leadership has articulatedthat eCommerce is a strategicpriorityorganization, they acknowledge that no concrete goals or measurable objectives have been setA DVA N C E Dbeyond that.Measureable eCommercegoals established and activelytrackedJust 11% of brand respondents report that eachfunctional team within their organization hasspecific eCommerce goals built into their strategicEXPERTgrowth plans and KPIs.eComm goals aligned withcore customer strategies anda focal point for key customerinteractionsSince eCommerce touches every aspect of theorganization, cross-functional buy-in is essential;however, many eCommerce teams are hitting a wall ingaining the support they need from cross-functionalpartners. As one survey respondent put it, “Ourbiggest challenge is gaining buy-in from stakeholdersthat don’t see direct impact from eCommerce; i.e.,24%19%LEADEReComm fully embedded inbroader company growthstrategies and across allfunctional plans11%product marketers responsible for updating content.”Don’t know / not applicable6%T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T6

3. The challenges of managing profitability andsupply weigh heavily on brands50% of respondents rank handling challengingpricing and profitability scenarios as their eCommercetop challenge.Q: What are the top challenges that you have around organizing for eCommerce?(Rank top 3)Source: Kantar/Profitero 2019 eCommerce Benchmarking surveyAfter pricing and profitability, 40% of respondentssay that adapting the existing supply chain to fiteCommerce demands is their next top challenge.50%Handling challenging pricingand profitability scenariosLess of a challenge for brands is the ability to getapproval for eCommerce budget or the ability tohire, suggesting that most organizations are past theearly stages of trying to make a business case forAdopting existing supplychain to fit demands ofeCommerce40%eCommerce and are now dealing with the much moremature issue of competing in the channel.Finding more effective waysto partner with retailers todrive sales35%34%Measuring the return oninvestment in eCommerceEstablishing a clear andwell-understood eCommercestrategy32%28%Attribution for onlineinfluence on offline salesSecuring incremental,dedicated headcountGetting budget approval21%16%T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T7

3. The challenges of managing profitability andsupply weigh heavily on brands (continued)The survey also reveals that most organizations aretrying to force fit offline strategies into the onlineworld, which is only making channel conflict andprofitability issues worse. One-quarter of respondents(25%) report their organizations lack a dedicatedeCommerce assortment strategy, while 38% reportthey are simply adapting their offline assortment foreCommerce.Q: In the area of eCommerce assortment & innovation, how would you rate yourorganization’s capabilities/approach?Source: Kantar/Profitero 2019 eCommerce Benchmarking surveyN OV I C E25%Do not have a dedicatedeCommerce assortmentstrategyA DVA N C E DAdapt our assortment tomeet the requirements ortrends for eCommerce38%EXPERTDedicated product strategyand innovation processfocused on eComm21%LEADERDedicated product strategyand innovation processfocused on distinct eCommretailer and fulfillmentmodelsDon’t know / not applicable13%6%T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T8

3. The challenges of managing profitability andsupply weigh heavily on brands (continued)Nearly one-third (32%) report that they have yet todevelop an eCommerce-specific pricing strategy,while only 15% of brands have implemented legal(minimum advertised price, or MAP) policies toQ: In the area of eCommerce price & promotion management, how would you rateyour organization’s capabilities/approach?Source: Kantar/Profitero 2019 eCommerce Benchmarking surveyprotect themselves from extreme price discountingby online retailers and marketplace sellers.N OV I C EAs retailers continue to use algorithmic-basedNo eCommerce-focusedpricing strategymethods to match prices, the lack of eCommerce-32%specific price and promotion strategies will exposecompanies to lower profitability.A DVA N C E D“We lack policy enforcement from sites like AmazoneCommerce integrated intocross-channel pricing strategyand eBay, allowing undercutting of prices, oldinventory, and misrepresentation of our brand.”— Survey respondent“Operations product configuration is our next bigchallenge. Creating items that leverage eCommercecost structure to be optimized for profitability.”18%EXPERTHave integrated digitalpromotions into crosschannel pricing and TPM/TOPprocesses8%— Survey respondentEXPERTHave a MAP/eMAP policy15%LEADERHave dedicated focust atthe channel level for brandprotection, MAP enforcementor promotional effectivenessDon’t know / not applicable17%10%T H E 2 0 2 0 E C O M M E R C E O R G A N I Z AT I O N A L B E N C H M A R K R E P O R T9