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Internet Retailer Survey: Hold the line
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Even if their e-commerce unit is posting substantial revenue gains compared to stores and catalogs, many big chain retailers and direct marketers are holding the line on e-commerce technology spending, says Ken Burke, chairman and founder of e-commerce platform provider MarketLive Inc.
“In previous years where they might have done three projects, many of the big retailers are only looking to do one,” Burke says. “The e-commerce unit of a big chain might be showing substantial business growth, but they are also part of a larger information technology organization where resources might be constrained. Everyone’s being a lot more judicious this year.”
The survey finds that only 14.3% of chain store retailers expect to increase their spending on e-commerce hardware, software and services this year by at least 50%, compared to 20% of consumer brand manufacturers, 12.4% of web-only merchants and no catalog companies.
But in a year when many retailers are spending only slightly more on e-commerce or freezing technology budgets altogether, now may be the right time to get the best price, planning and service on a major hardware or software upgrade. With fewer retailers in the market, e-commerce technology vendors are more likely to offer competitive bids in response to retailers’ requests for proposals, Burke says. Many vendors can also commit their top talent for a longer period of evaluation, implementation and testing. “Retailers really want to see vendors respond to proposals with the best possible deal,” he says. “Now is actually a pretty good time to implement a big project. Vendors want the deal and they are freed up to put more of their best people on the job for a longer period of time.”