Despite two and half tumultuous years for digital commerce, retail and brand executives are mostly satisfied with their core organizational structures. However, defining which internal team ultimately owns which ecommerce functions remains a complex challenge. That’s according to a recent qualitative study designed to gauge how ecommerce fits into a larger retail organization conducted by CommerceNext in partnership with CommX. The survey of digital executives from across the retail industry also revealed that attracting and retaining top digital talent in a fiercely competitive hiring market and modernizing metrics to reflect current industry trends remain two of the top challenges for ecommerce leaders.
“Retail ecommerce executives’ responsibilities and influence within organizations have grown significantly over time, to the point where they’re now a powerful voice in the most senior levels of companies,” said Scott Silverman, Co-Founder of CommerceNext. “The issue is that digital team reporting structures are not always as clear as we might hope, particularly when it comes to omnichannel. That means every executive needs to be able to maintain strong partnerships and collaborate with their peers across marketing, ecommerce and IT to break down silos and achieve their digital transformation goals.”
“Until digital commerce executives prioritize customer focused KPIs, their channel metrics will continue to fail,” said Amanda Elam, Chief Marketing Officer, Bloomreach. “When executives adopt KPIs that contextualize how customers interact with the brand, their teams will become empowered to put customers at the center of the experience, ultimately leading to success across all metrics.”
The CommerceNext study found that over 50% of digital commerce leaders surveyed report to the CEO or COO/CRO, while the CMOs who own ecommerce are taking more direct control in an attempt to unify the customer journey. Among CMOs surveyed who directly own their company’s ecommerce business and digital marketing, the overwhelming perception is that the right place for these functions to sit is under marketing, as this structure best ensures brands can tell their stories consistently across consumer touchpoints.
At most companies, ecommerce teams directly own site merchandising and catalog, content planning, operations, site design, web development, marketplaces and performance marketing, but all other functions—such as consumer insights and analytics, brand marketing, and inventory planning, along with administrative functions like HR and finance—tend to be either shared or owned by another group. Omnichannel is even more complicated, with no single leader and designated as a cross-functional workstream, the survey found. The structural complexity underscores the difficulty digital leaders face in delivering a consistent brand and customer experience across selling channels.
Hiring and Retaining Top Digital Talent and Creating Relevant KPIs Are Major Challenges
The study also revealed that finding and retaining talent in a competitive hiring market remains challenging for retailers, with data scientists and CRM experts in particularly high demand as companies look to harness the power of first-party data and build stronger loyalty programs.
To attract these professionals, companies are expediting promotions, paying salary premiums of 20%–30% for digital talent and offering remote work options. Some are also creating internship programs that cultivate young talent, looking for remote hires, offering home office setup stipends, and increasing employee referral bonuses. Several executives surveyed mentioned that embodying the company’s values, maintaining strong lines of communication with remote employees, and recognizing team successes are crucial retention strategies that can help make employees feel valued enough to stay.
Success metrics aren’t maturing the way most digital executives would like, either, the survey revealed, with many interviewees saying that customer KPIs haven’t evolved because of data integrity issues, inconsistent calculation methodologies or lack of analytical resources. Sales, traffic and conversion were cited as the KPIs most digital initiatives and teams are still judged by, along with return on ad spend and profit margin for some. However, executives surveyed indicated strong interest in using a more holistic measurement methodology that focuses more on customer lifetime value. When asked which KPIs are important but not tracked well enough today, the most frequently cited metrics were customer acquisition costs and digitally influenced store sales.
Designed to help companies evaluate and improve their own organizational structures in this defining digital era, the survey consisted of live interviews with more than a dozen executives across a range of retailers and brands with annual online revenues of $20 million to over $3 billion. The study sought to understand how these leaders are building and retaining a strong organization and using key KPIs to monitor and improve their digital business. Answers were anonymized to protect company-specific information.