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Report flags lack of consensus amongst ecommerce directors on core competencies focus

Report flags lack of consensus amongst ecommerce directors on core competencies focus
Wednesday May 11 2011

The Trading Intelligence Quarterly report commissioned by eCommera says there is a lack of consensus amongst ecommerce directors as to which core competencies they should focus on to increase profit levels.


The report surveyed 99 UK and 101 French ecommerce directors.

“This quarter’s research into the ‘core competencies of an online retailer’ offers insight into the skill sets being valued and developed in successful ecommerce businesses,” said Michael Ross, Director, eCommera. “The findings are indicative of an industry sector which is challenged by the breadth of the agenda and is still experimenting with how best to resource the activities.”

The report reveals a range of key findings which will be of major interest for online retailers. These include:

- 84 per cent of companies in the report increased their online revenues over the last year, and more than 60 per cent saw growth rates of over 20 per cent.  Just four per cent of respondents cited a decrease.

- Indicative of the resourcing and skills challenge for retailers is that virtually every one of the 17 suggested competencies was ranked as either core or critical by the respondents.

- In terms of the most dominant competency, technology functions are currently a high priority for online retailers. Over half of respondents cited website design (53 per cent) and site development (51 per cent) as the two highest rated competencies, reflecting a  focus on the technical aspects of online retailing.

- 44 per cent of high growth retailers believe that both analytical and technology skills are core competencies in equal measure. They also rate customer experience, product and marketing skills more highly than lower growth businesses. 

- Lower growth companies have generally less regard for all five of the aforementioned competencies. Mid-tier companies tend to overemphasise technology skills.

- Most retailers are managing functions across the board with help from third parties. Interestingly, a relatively high number of ecommerce businesses are managing and executing their technology (46 per cent) and customer service (47 per cent) functions externally. This is in direct contrast to their ranking of these functions as ‘core’ to their business.

- Product was the only category that retailers most tended to manage and execute internally. Product range development drove this ranking with 47 per cent indicating full control over this function.

- 42 per cent of ecommerce directors indicated they would outsource the technology function more within two years’ time. Only website design will be more internally controlled, with 36 per cent planning to move it in-house.

- UK Vs. France - Whilst broadly similar to UK views, French respondents today placed greater value on the core competencies of management of technology infrastructure (44 per cent vs. 35 per cent) and marketing performance (44 per cent vs. 34 per cent). At present French retailers are also placing a greater emphasis on technology development and infrastructure than their U.K counterparts.

- In terms of managing competencies, 40 per cent of French retailers indicated that they managed their current technology infrastructure internally, compared with only 28 per cent of UK retailers. However, looking ahead, 53 per cent of French retailers (vs. 41 per cent in the UK) plan to outsource more of their technical development, whilst 41 per cent (vs. 28 per cent in the UK) plan to bring their marketing performance in-house.

Ross concludes. “The findings are indicative of the early stages of a major shift within the industry. The way in which functions are perceived today and how they are being managed today is destined for change. As the ecommerce industry matures, retailers are slowly moving their focus away from mechanical enablers to those skills that drive real differentiation in the increasingly competitive online marketplace.

The journey to becoming a high growth ecommerce company requires a transition from the technicalities of operating the online store, to a conscious focus on the measurement and analysis of all the online activities. Understanding what drives conversion is imperative as is being able to use those metrics to improve operational effectiveness.”

Tagged as: ecommerce | mcommerce |

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