Back in the early days of e-commerce, before the Amazon standard, companies could enter the digital business space and still find relative success with an amateur online staff. This was in part because revenue from online sales hadn’t reached levels that made executives take notice, in part because the definitions of “digital expert” and “digital success” were still nebulous. The online wings of industries that long prided themselves on the traditional way of doing business — from publishing to retail to luxury retail — have had to fight being undervalued, both in priority and in compensation. While the most innovative luxury brands have been quicker to recognize the critical importance of building a strong, seasoned digital team, the majority are still coming to terms with what that means.
The L2 Collective: U.S. E-commerce 2012, a comprehensive new study that lends unprecedented insight into the internal structure of luxury brands, revealed some very interesting findings on this subject. Through analysis of sensitive data shared with L2 by the brands themselves (upon promise of anonymity), we were able to identify correlations like the one above, linking annual compensation of E-Commerce Heads and annual E-Commerce sales, as a percentage of overall sales. Ranging widely on both axes, with compensation starting at $50K and going up to $400K (the average: $200K), and the e-commerce sales spread spanning zero to almost 18 percent (the average: 6 percent), it’s clear that within the prestige sector there still isn’t a consensus about how important e-commerce is to overall business.
The bottom line, according to L2’s Naomi Sparks Grewal, who led this first L2 Collective study, is that brands whose e-commerce executives command higher salaries tend to garner greater online sales. “Our findings suggest that large, veteran e-commerce teams tend to run the most successful online businesses.”
For more on the inaugural L2 Collective: U.S. E-commerce 2012 study (available in its entirety only to those member brands that participated in the survey), download an excerpt here.