While a gap in ecommerce adoption between retailers and brand manufacturers used to be quite prevalent, it’s now common practice for brands to sell online, a trend that will continue to increase in 2019.
According to a newly released study by Profitero and Kantar Consulting, more brands rate themselves as advanced or expert in ecommerce this year (57%) than in 2017 (45%). Additionally, 76% of brands expect to increase their ecommerce expenditures next year with the theme for investing being data and analytics; 73% project spending at least a portion of their budgets on this area.
What's driving these increases? Amazon, in part, and the ever-present competitive landscape. The biggest challenge cited was pricing and profitability (55%), followed by measuring ecommerce as a channel (51%) and attributing the online influence in offline sales (45%), which speaks to the investments in data and analytics.
Currently, larger brands (>$500 million in sales annually) are going it alone more than smaller brands. Nearly three-fourths (72%) of larger brands sell primarily through their own ecommerce platform compared to 49% of smaller brands, which also sell through third-party marketplaces (20%) and a mix of the two (31%). But for both business sizes, there is a shift toward a hybrid approach. Seventeen percent of smaller brands plan to sell through third-parties in 2019 while 57% are evaluating it, and 14% of larger brands have third-party selling plans while 41% are thinking about it.
Increasingly, online marketplaces are being viewed as an additional sales channel, though cannibalizing sales and losing the customer relationship are still concerns. Amazon partnerships have become more attractive to big brands like Nike that once shunned them. According to analysis by Coresight Research, between February and September 2018, third-party sales of Nike goods decreased 46% as Nike began selling directly on Amazon.