BDO Survey: Retail CFOs Forecast 10 Percent Growth in 2015 Online Sales

Click, swipe, tap and repeat. On the heels of another banner year for e-commerce, retail CFOs expect U.S. consumers’ feverish appetite for online buying to continue its strong upward trajectory in 2015. According to a recent BDO USA, LLP survey, nearly four out of five (78 percent) retail CFOs anticipate their online sales to grow. Overall, CFOs forecast an impressive 9.9 percent boost to e-commerce sales this year. This projected increase comes after the Commerce Department’s estimate of a record-breaking $304.9 billion in U.S. online sales in 2014.

To capture more of consumers’ dollars across digital platforms, a plurality (37 percent) of CFOs say their primary growth tactic for 2015 is expanding their e-commerce and mobile offerings. At the same time, when asked where CFOs plan to spend the most capital this year, 22 percent point to e-commerce and mobile channels.

Meanwhile, mobile commerce is growing at nearly three times the rate of overall e-commerce, according to PayPal and Ipsos, and retailers are steadily realizing the need to enhance each touchpoint on their customers’ path to purchase. To keep up with the surge in mobile shopping, 68 percent of CFOs plan to increase their investment in mobile technologies in 2015, a leap from the 40 percent who planned to do so last year.

With more digital growth and more cyber threats on their radar, retailers are committed to both strengthening and securing their platforms, and a plurality (28 percent) of CFOs anticipate investing the most capital into their IT systems and technology this year. Following the wave of high profile breaches at major retailers in 2014, including Michaels, Supervalu and Home Depot, it comes as little surprise that more than half (56 percent) of CFOs have increased their spending on cybersecurity in the last 12 months. Among these retailers, 89 percent have begun using new software security tools and 81 percent have created a security breach response plan. At the same time, 40 percent have hired an external security consultant and 11 percent have brought in a Chief Security Officer.

“Consumers crave speed, selection and the convenience of shopping anywhere and anytime at the touch of a button,” says Natalie Kotlyar, partner in the Consumer Business practice at BDO USA, LLP. “But investing in online and mobile systems is a difficult balancing act. Staying competitive requires retailers to deliver a seamless, engaging experience across channels, while at the same time investing to protect their consumers’ from the growing threat of cyber attacks.”

These findings are from the ninth annual BDO Retail Compass Survey of CFOs, which examined the opinions of 100 chief financial officers at leading retailers located throughout the country. The survey was conducted in January 2015.