Finance executives who participated in professional services firm BDO’s annual CFO survey expect 8.2% growth in online sales this year and not surprisingly plan to increase investments in mobile capabilities.
Mobile and online sales will continue to drive growth for retailers in 2014, the firm said. However, now that e-commerce has firmly taken root in the retail industry, growth is beginning to stabilize. As a result, about 64% of CFOs said online sales will grow in the coming year, a figure below the 74% who expressed that sentiment the prior year.
“After a banner year of e-commerce and m-commerce growth in 2013, retailers largely expect these platforms to keep delivering big returns in the year ahead,” said Natalie Kotlyar, a partner in the retail and consumer products at BDO USA. “But safeguarding this future growth requires retailers to invest across channels in order to deliver a safe, seamless and efficient experience for shoppers. All the moving parts — mobile apps, websites, supply chain IT systems, brick-and-mortar — need to be carefully coordinated for companies to hold their own in this fiercely competitive landscape.”
To achieve the 8.2% growth CFO project, 34% of those surveyed are focusing primarily on developing their e-commerce and mobile commerce platforms as many companies attempt to streamline and integrate multiple channels in order to compete with major players like Amazon. Along with e-commerce and mobile commerce, CFOs are also improving their merchandise assortment (28%) and expanding within the U.S. (24%).
The rise of online retailing has also introduced new risks for retailers, according to BDO. With recent high-profile data security breaches at Target and Neiman Marcus, it’s no surprise that a plurality of CFOs (27%) said they will invest the most capital in 2014 in IT systems and technology. Meanwhile, 18% of CFOs plan to invest the most capital in e-commerce channels, and 12% said that mobile application development will encompass their largest investment, with a full 40% planning to increase their investment in mobile overall.
The findings are from BDO’s eighth annual Retail Compass Survey which included 100 CFO’s from leading retailers. The survey was conducted in January 2014.