VTEX, the global enterprise digital commerce platform for premier brands and retailers, has launched its new retail profitability research paper, ‘Three Investments to Drive Ecommerce Growth,’ at NRF 2023.
The research, powered by VTEX partner AWS, highlights important investment opportunities for retailers looking to earn profitable growth, despite the economic headwinds ahead. It specifically dives into ecommerce challenges, the new era of profitability and how retailers can achieve that profitability in 2023 by putting the attention back on the customer and their evolving needs.
Since the beginning of COVID-19, the rules of commerce have been rewritten, and an increased emphasis on growth over profitability consumed retailers. Despite this shift, a recent study by Public is Sapient showed that 37% of retailers say ecommerce isn’t meeting their profitability targets.
“The pandemic ignited the Era of Growth at All Costs, but now retailers are facing higher expectations while fighting a perfect storm of financial challenges and shifting consumer demands,” said Jordan Jewell, the report’s author, former IDC analyst and current director of Merchant Growth Strategy at VTEX. “Retailers are feeling the pressure to generate profit, and they’re not quite sure which investments will help them move the needle and give them the ROI they need to see. Through our finds from this research, we give retailers the tools they need to make the right decisions for them and their business to do just that.”
In evaluating what will drive long-term growth, VTEX recommends to focus on three key investments:
Get more out of the customers you already have. The majority of a brand’s profits come from their most loyal customers, so investing in those select customers can make a huge difference in profitability. Retailers investing in this sector should focus their initiatives on customer retention, collecting first-party data and cross-channel communication.
Make inventory and fulfillment your strength. VTEX research shows 55% of brands are still in the early stages of the omnichannel maturity curve. Investing in this strategy – specifically inventory management, order management and supply chain – can improve customer satisfaction. These initiatives should focus on treating fulfillment like a product, unifying inventory and harnessing marketplace models.
Engage with customers in new ways. The digital commerce market is fiercer and more competitive than ever before. So, brands need to step outside their traditional customer experience tactics to better engage with consumers, like through video commerce and immersive product pages, to boost conversion rates and differentiate themselves from the crowded space.