In a shopping environment that execs at the National Retail Federation have described as "really low growth," retailers are no doubt feeling somewhat more stressed than usual. A new study from Forrester Research shows that over the course of the last six years, the risk areas that merchants find most concerning have changed, and unsurprisingly, a lot of them are related to the rise of e-commerce.
Forrester took a look at 23 publicly traded retailers' self-reported risk factors, which are included in their U.S. Securities and Exchange Commission (SEC) filings, in the years between 2007 and 2013. The research pool included both online-only and multi-channel retailers.
Here are the big worries they've got on their minds.
1. Security Breaches
According to Forrester, preventing security and data breaches has catapulted to the top of many retailers' to-do lists in the last six years. And it's not like that fear is without precedent: In the last year, both eBay and Target have dealt with massive data breaches, with the latter's CEO resigning in the fallout. Although security is a concern for any retailer dealing with e-commerce, it's a particular area of focus for web pure plays, whose entire business takes place online.
2. Technical Problems
Standard-issue tech problems have also become a key area of focus. As Forrester's Sucharita Mulpuru notes, just a few minutes of technical issues can cost a retailer a whole lot in sales, not to mention that it puts a dent in customers' inclination to return to that website again. While slightly less critical than security breaches — it's damaging, not outright disastrous — maintaining technical stability is still a high priority.
3. For Big-Box Stores and Department Stores, Competition
Unsurprisingly, big box and department stores marked competition as their biggest risk factor, perceiving online players that sell in numerous categories — Amazon, for instance — as an increasing threat.
4. For E-Tailers, Online Sales Tax Collection
The popularity of online retailers may be unnerving to their offline competitors, but they have numerous concerns of their own. In fact, pure e-commerce players tend to cite more risk factors than any other kind of merchant because so many of their operations are online. For these companies, the enforcement of online sales tax collection is a particular concern, since the lack thereof has up until this point been one of their major points of appeal for big purchases.
So how does Forrester recommend retailers handle these fears? Prioritizing the most critical ones, for starters, which in many cases that means turning to IT experts to reduce tech-related risks. In dealing with security and data breaches, joining consortiums that share risk data and insights on managing it can be helpful. Hey, sometimes your problems are bigger than the competition.