Demandware®, Inc. (NYSE: DWRE), the industry-leading provider of enterprise cloud commerce solutions, today announced results from an Economist Intelligence Unit (EIU) survey of 300 top retail executives from around the world. Results reveal what retail leaders view as the four most significant challenges impacting the industry: increased globalization, increased security risks, shifts in consumer taste and the rise of globally competitive online marketplaces.

Despite these challenges, a small group of high-performing retailers are successfully pursuing growth via customer-centric strategies and technology investments. Their approach offers a blueprint for growth and transformation.

“This groundbreaking analysis comes just as the retail industry is facing unprecedented disruption, requiring retailers to rethink their strategic and operational approaches to achieving growth,” said Rob Garf, vice president of industry strategy and insights for Demandware. “The radical shifts in retail dynamics will directly impact the ability of retailers to leverage technology, change organizational fiber, and ultimately reach their strategic goals.”

Retailers’ Response to Disruption

Amidst this disruptive landscape, EIU research indicates that retail executives are going “back to the basics,” while placing the customer at the center of everything they do, to distinguish themselves from the pack. Among the characteristics that executives view as most important to differentiating themselves right now, 60% pointed to “product excellence,” while 53% cited “seamless service” such as offering high-quality customer services and a unified experience across channels. Executives noted that differentiation has become more complex and difficult given rapid changes in customer behavior and transformation in technology.

Undue Optimism?

Despite the daunting dynamics facing them, most C-level execs seem confident – perhaps overly so – in their ability to compete, whether with traditional or emerging players. Among those who see “fast fashion” as a key trend, for example, 76% said they were ready to compete in that new and complex space. And 70% of respondents expressed similar confidence in their ability to thrive with the rise of mass customization. This optimism may be overshadowed by the fact that too many retailers are hard-wired to the ways of the past, often literally, in the form of real estate commitments, supply chain practices, organizational structures and legacy technology investments. This undue optimism may well be leading executives to underestimate the challenging realities of integrating across well-established commitments, practices and technology investments.

Seeing Opportunities – Not Threats

The research identifies a high-performing segment of retailers that overwhelmingly sees trends as opportunities compared to their lower-performing counterparts. High performers, the data suggest, are particularly focused on growth rather than on simple survival. Given their resources and the perceived opportunities, they likely expect to see more chances to compete on their own terms. For example, 69% of high performers see globalization as an opportunity, while only 43% of lower performers do so. Likewise, 52% of high performers view the rise of the global marketplace as an opportunity – the new “frenemy” – while only 35% of the lower performers see opportunity there.

High Performers Offer a Roadmap for Growth

The high performers offer a clear vision for seizing available opportunities that may provide a useful roadmap to growth in this new era of retail democratization and disruption. These market leaders are investing in ways that are clearly aligned with opportunities and move them closer to becoming customer-centric organizations. Most notably, this segment more often focuses on three top growth initiatives: geographic expansion, strategic partnerships and new stores and formats. They are also infusing technology into every area of their operations – far more indicating an intention to increase tech spending (82%) than among lower performers (56%).

“This data tell us that the democratization of retail – with seemingly unlimited consumer access and control – has triggered the next wave of growth for those that adapt and change,” said Garf. “Retailers can no longer rely on more store locations and larger footprints for growth – they must embrace the reality of reaching customers wherever, whenever and however they demand.”

Demandware sponsored the research for the report, Finding Retail Growth: A View from the Corner Office, which was conducted by EIU. The report examines the trends creating rapid change in the retail industry and the initiatives retailers plan to undertake to grow over the next three years.

Get the full EIU report Finding Retail Growth: A View from the Corner Office.

About Demandware

Demandware, the category defining leader of enterprise cloud commerce solutions, empowers the world’s leading retailers to continuously innovate in our complex, consumer-driven world. Demandware’s open cloud platform provides unique benefits including seamless innovation, the LINK ecosystem of integrated best-of-breed partners, and community insight to optimize customer experiences. These advantages enable Demandware customers to lead their markets and grow faster. For more information, visit http://www.demandware.com, call +1-888-553-9216 or email info@demandware.com.

About the Economist Intelligence Unit

The Economist Intelligence Unit is the world leader in global business intelligence. It is the business-to-business arm of The Economist Group, which publishes The Economist newspaper. The Economist Intelligence Unit helps executives make better decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies. More information can be found at www.eiu.com or www.twitter.com/theeiu.

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