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For eBusiness & Channel Strategy Professionals
Why Read This Report
As retail eCommerce sales continue to explode, eBusiness executives must check all the boxes to ensure
that they are not missing opportunities in this critical channel. This playbook provides insights for all
companies — from those just beginning their eCommerce journey to those extremely experienced in
the industry that are looking to optimize their already successful presence. We will explore the overall
state of the industry, best practices in site execution, technology partners that can support web growth,
benchmarks to evaluate various aspects of an eCommerce business, and recommendations to continue
driving growth in an environment that has ever-changing shoppers.
The Art And Science Of Retail eCommerce
Executive Overview: The Retail eCommerce Playbook
by Sucharita Mulpuru
with Patti Freeman Evans and Douglas Roberge
October 9, 2012
eCommerce is driving growth in retail
As more consumers than ever have access to the Internet and own a variety of devices, such as
smartphones and tablets, that enable them to access web content continuously, the shift to web-based
transactions will continue. Already, 7% of total retail sales in the US are transacted online, a figure that is
even higher if we exclude underpenetrated categories such as grocery.1
The force of eCommerce promises
to dominate the retail sector for years to come for a number of reasons:
■ The Web is altering channel preferences. While total retail sales are growing at a low single-digit
rate (if at all), the retail eCommerce world promises to continue growing at a double-digit clip for the
next several years. Consumers increasingly have a “web first” mentality in their shopping journeys.
Many shoppers begin their research online, supplement their research with web resources, and often
complete transactions online. In categories such as PCs, more than half of all transactions are already
completed through the web channel.
■ Firms are realizing that a powerful transactional presence can be a weapon. Retail has historically
been constrained by retail square footage in stores and inefficient inventory management systems.
Effective web tools now enable retailers to pick web orders from stores where inventory may not be
moving quickly or save the sale of a shopper who may not be able to find the particular item they are
looking for in-store. These features help boost overall sales, increase margins, and drive customer
satisfaction and loyalty.
■ New retail forces are shifting industry dynamics. The growth of large pure-play powerhouses such
as Amazon.com has also shifted focus to the web channel. Not only are companies like Amazon
increasingly a gateway to product research but they have also introduced new ways to think about
retail success: introducing on-site advertising modules, selling competitive goods through lucrative
marketplaces, and leveraging shipping as a marketing program.2

2. For eBusiness & Channel Strategy Professionals
The Art And Science Of Retail eCommerce 2
© 2012, Forrester Research, Inc. Reproduction Prohibited October 9, 2012
eBusiness Executives Need To Continue Gathering Resources To Grow
Given that eCommerce is now nearly two decades old, best practices are now broadly understood
and a strong ecosystem of technology partners exists to support eBusiness executives in most
details of their websites, such as product detail pages, search boxes, and checkout pages. But to grow
effectively, companies need to dedicate the appropriate resources to ensuring that they put their best
foot forward. That means:
■ Funding to support site development and marketing. Retail IT executives are often regarded
as secondary to merchandisers, but because the Web depends on efficient performance, strong
web development support is essential to driving success. This means that retailers must not
only engage the appropriate technology partners but also ensure that they have hired strong
technology talent (and gained budget for securing that talent). Additionally, in a web world
that is far more crowded than any physical retail destination, even the most popular branded
retailers need to consider the importance of interactive marketing budgets to ensure that their
company is top of mind when consumers are at an early point in the purchase funnel for a given
product or category.
■ Organizational talent to manage an effective eCommerce presence. While eCommerce websites
are often regarded as relatively inexpensive — compared with rolling out a flagship store in an
expensive retail destination, for example — companies nonetheless need to invest in key areas
such as site design and development, usability testing, content creation, and interactive marketing.
Each of those capabilities often also requires dedicated headcount, even for relatively small
organizations that may be achieving less than $10 million in revenues; for large organizations
driving $1 billion or more, dedicated web teams can be several thousand employees.
■ Senior-level support to ensure the absence of channel conflict. Companies with the strongest
eCommerce organizations tend to have C-level executives who champion that segment of the
business and are willing to allocate resources to drive success in that channel. As shipping costs
have compressed margins for many web retailers in recent years, innovative retailers haven’t
passed those costs on to consumers; rather, they have sought out creative accounting solutions
(such as making shipping a marketing expense) or allying with retail consortiums to drive some
economies of scale (such as fee-based shipping clubs).
A Rock-Solid eCommerce Presence Is Now Table Stakes
While most retailers now have more than a decade of experience in selling online, holdouts continue
to enter the fray every year; these are often new, growing retailers that were busy managing the
hypergrowth in their physical stores, such as Zara. Because consumers are constantly connected
and use the Web prior to completing more purchases in every sector, it is imperative that eBusiness
executives have the appropriate tools and knowledge to execute a strong web presence that not only
showcases their brand but also enables shoppers and store associates to research and buy. We crafted
this playbook to address all the key elements of success; this playbook will help you (see Figure 1):3

3. For eBusiness & Channel Strategy Professionals
The Art And Science Of Retail eCommerce 3
© 2012, Forrester Research, Inc. Reproduction Prohibited October 9, 2012
1. Discover the importance of a best-in-class eCommerce business. This playbook will provide
eBusiness executives with insight into the opportunity for eCommerce, its growth trajectory,
and the current landscape that retailers face as they continue to navigate this channel.
2. Plan to deliver retail eCommerce excellence. We will help you determine which features and
functionality are most critical to success, what metrics are most effective for measuring a strong
channel presence, and what elements are most essential in not only getting started but also in
continuing to grow in the web channel.
3. Act effectively to deliver retail eCommerce success. While getting started is a challenge
in itself, maintaining success and continuing to execute effectively in a constantly shifting
retail landscape is equally critical. To this end, we will provide overviews of the eCommerce
technology stack, the vendors that best help support those goals, and the organizational best
practices that drive success in best-in-class eCommerce companies.
4. Optimize for continued eCommerce growth. For several years, Forrester has collected
industry benchmarks to support executives in their road maps. We will lay out the most
critical benchmarks as well as how various companies in different sectors should think about
interpreting those figures so that they are relevant to their businesses. We will also address new
and emerging components of eCommerce strategies, such as responsive design and “mobile first”
initiatives that take into account the evolving landscape of devices and Internet connectivity.

4. For eBusiness & Channel Strategy Professionals
The Art And Science Of Retail eCommerce 4
Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology.
Forrester works with professionals in 17 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs.
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© 2012 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester
Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly
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located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. 84941
Figure 1 The Retail eCommerce Playbook
Endnotes
1
eCommerce sales continue to grow rapidly, having topped $200 billion in 2011. Forrester expects that online
sales will grow from 7% of overall retail sales to close to 9% by 2016. Key drivers of this growth include
consumers’ greater comfort level with purchasing various categories online, broader web shopping capabilities
with mobile and tablet devices, innovative new shopping models that divert spend away from physical stores
(e.g., flash sales, subscription models), online loyalty programs, and aggressive promotional offers from web
retailers. See the February 27, 2012, “US Online Retail Forecast, 2011 To 2016” report.
2
For more information on how Amazon will affect both online and offline retail, see the July 26, 2012, “Why
Amazon Matters Now More Than Ever” report.
3
Please refer back to the online document to see the associated reports in the playbook. See the October 9,
2012, “The Art And Science Of Retail eCommerce” report.
Source: Forrester Research, Inc.84941
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