Online retailers have already doubled their technology spending between 2010 and 2014 – and that figure will double again by 2019, according to Forrester.
Within the next 4 years, expenditure on ecommerce software will reach $2.1 billion among larger organizations in the U.S. alone, the analyst predicts, marking a 12% increase in the current annual growth rate.
It’s not just the technology itself that will attract greater investment. Forrester forecasts that five times as much budget will be allocated to implementing and maintaining new solutions than at present, totaling more than $5.1 billion pounds in the USA.
The report’s authors, analysts Peter Sheldon and Michael Yamnitsky, claim this growth is being driven by the need to embrace more agile technology, as retail becomes evermore complex.
For example, retailers that might have started off trading through an online marketplace may have needed to concern themselves initially with just Amazon or eBay inventory management. Now, however, they are balancing allocation to those original touch points with order traffic through other channels, which they’ve grown into as part of a digital expansion strategy.
It’s not just online driving these upgrades. Sheldon and Yamnitsky report that in addition to Amazon order management systems and other online processes, retail stores are also driving forward technology changes online.
This is because an increasing number of consumers want to hop between channels – ordering online and collecting in-store, for example – which requires retailers with a bricks and mortar and digital presence to gain a 360 degree overview of inventory availability and order activity.
Other interesting statistics revealed by the survey include:
- More companies will begin to outsource their Software as a Service (SaaS) requirements
- Mobile is a major driver behind software upgrades, as ecommerce retailers need better platforms to cope with activity from desktop, laptop, tablet computers and smartphones
- The rise of wearable technologies such as smart watches will further complicate the mix of devices being used to shop
- The length of time online businesses use the same ecommerce platform will shrink from 7+ years to 5-6 years on average
- Wholesalers and distributors will mature in their use of technology, to streamline operations and improve profitability
How much of this comes true remains to be seen, but one thing can be sure: ecommerce companies will thrive or dive on the strength of their back-end technology. And the solution they invest in must be both scalable and flexible.
This is because the types of personalized, cross-channel consumer experience that today’s shoppers demand will only become more widely adopted. Current maturing markets such as the BRIC and MINT countries will come to expect the same standards currently being offered in the U.S. and U.K,
Ecommerce retailers who use software to their advantage to enhance their inventory and order management systems will be able to rise to these demands; those that don’t will find that constrictions behind the scenes damage their ability to offer outstanding customer service.