From Heineken to Duracell, brands across categories rapidly expand e-commerce teams

Dive Brief:

Seventy-six percent of brands are increasing their investments in e-commerce for 2019 to capitalize on the $3.5 trillion opportunity in the online retail space, according to a new report from Profitero and Kantar Consulting. Over one-third (35%) said they will spend more than 10% of their channel revenue on digital tools, solutions and agency support.
The "2019 eCommerce Outlook for Brands" report found that businesses also expanded their e-commerce staffing by an average of 83% over last year. The global e-commerce headcount at brand manufacturers has also increased significantly from a year ago, with several companies, including Heineken, Duracell, Revlon and LVMH, expanding their digital teams by as much as 500%.
The number of people with e-commerce-related job titles grew 83% compared to 2017. Brands are also more often relying on agencies to support e-commerce functions, especially in areas requiring heavy specialization that are tough to build in-house. Two-thirds of brands outsource SEO/SEM and half outsource content creation and digital marketing campaigns to third parties.

Dive Insight:

The new Profitero-Kantar research emphasizes how brands need to move quickly to build up their digital capabilities or risk losing their competitive edge in the e-commerce market. Big-name manufacturers, such Heineken, Duracell, Revlon and LVMH, expanding their e-commerce talent pools so significantly — by up to 500% — and over a short period of time demonstrates the potential pressure marketers are feeling to accelerate this transformation. It also shows that e-commerce is becoming a must-have specialty across a variety of sectors, including CPG, beauty and cosmetics and food and beverage.

The change has recently been reflected among other heavy hitters as well. Procter & Gamble, for example, last week debuted a Tide Eco-Box that's focused on reducing the amount of packaging used in shipped goods. The product is detergent maker Tide's first that is expressly designed around e-commerce and also the first offering to come from P&G Fabric Care's eCommerce Innovation Group.

Products tailored specifically for e-commerce purposes could become more popular as brands try to cater to consumers' growing preference for online shopping. This holiday season, for example, 57% of U.S. consumers are planning to shop for gifts online using via desktop and 42% will shop via mobile devices, according to a recent survey by Citi Retail Services. More than 80% of consumers will shop on Amazon, in particular, up 8% from 2017, a study by CPC Strategy found.

Many e-commerce initiatives are driven by data, which is a key area of the channel, helping brands to personalize campaigns, products and customer relationships. In 2019, brands will see a rise in "algorithmic-driven retail," where data analytics is essential, Profitero and Kantar forecast. Seventy-three percent of brands are spending part of their e-commerce budgets on data analytics services, and 41% plan to expand their e-commerce data analytics headcount over the next year.

Competing with e-commerce giants like Amazon is another obstacle that brands face. Pricing and profitability was cited as the top challenge by 55% of brands in Profitero-Kantar's report, and 55% of large brands and 74% of small brands are pursuing or considering first-party, third-party hybrid selling.