E-commerce continues to be a boon for retail chains, new report finds

Nearly half of retailers said their online sales are growing at a faster rate than their overall sales, according to a recent poll of 26 U.S. and Canadian retail chains by Karabus Management, a subsidiary of PricewaterhouseCoopers LLP in Canada.

However, while 44% of retailers surveyed said their web sales are growing faster than their total revenue, 17% said they don’t have a fully operational and transactional e-commerce site. But, it seems retailers are recognizing the importance of having one. All 17% said they are planning on enhancing their site functionality in the near future.

The polled retailers have been selling online an average of five and a half years and e-commerce accounts for an average of 6% of sales, the survey found.

Additionally, the survey found:

• 50% of retailers took advantage of discounts offered by their media and marketing vendors to reduce their advertising spending without impacting their customer outreach.

• 40% of retailers that reduced their advertising and marketing spend spent the savings in customer-relationship management initiatives.

• 5% increased their advertising and marketing spend in order to gain market share.

• 70% of retailers reduced inventory levels at a greater rate than their sales declines.

• 36% said that flowing goods closer to sales was the most important factor in reducing inventory levels this fall compared to a year ago.

• 28% said reducing "open to buy" quantities was their top priority.

• 16% said assortment and vendor editing was their top priority. As retailers trimmed inventory, they looked to shed entire brands or categories rather than make modest, across-the-board cuts from their entire assortment, the survey found.

Of the retail chains Karabus Management surveyed, 80% were specialty retailers such as apparel, jewelry and footwear merchants, and 20% were department stores. Annual sales ranged from $140 million to more than $9 billion. 46% of the retailers are publicly held and 54% are private.