795533 trends in ecommerce hype vs reality

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Hype vs. Reality – anevaluation of trends inmultichannel retail

Philip Dalzell-PayneMitch CohenElizabeth Murphy

August 2013



L a s t M o d i f i e d

8 / 6 / 2 0 1 3 6 : 2 5 P M I n d i a S t an d ar d T i m e

P r i n t e d

McKinsey & Company | 1

Social selling

Crowd curation

Social transactions

Social recommendationSocial gifting

Cross retailer loyalty

Geo-location promotions Store navigationand promotions

Coupon aggregation

Promotion targeting

Social gaming

Crowdsourcing

Dynamicmerchandising

Merchandising tools

Local search

On-demand customer service

Local shopping

Mobile payments

Price scraping / watching

Personalization platform

Customer communities

Same day delivery(JD.com also – 360 Buy)

Delivery pickup points

Social engagement

Dynamic 3PL

Cross border logistics

Consider

Evaluate

Commit Buy

Bond

Technology is enabling many new business models and intermediaries

which are changing how consumers shop





P r i n t e d


Key evolution areas of online and multichannel retailing

SOURCE: Team analysis

O n l i n e

S t o r e s

C

r o s s - c h a n n e l

a Digital marketing reallocation Crowd / Social integrationa Social / locala

Lockers / pickup points Analytics / personalization Dynamic 3PLe e e

b bCross border Next day/same day shipping b Social selling

c Extended aisle c Product personalization c Rise of the “mega

intermediary”

Geo—targeted marketingd dMobile commerce dThird party data

h Store as showroomsh Store size reduction/repurposing

h Demographic shifts

Happening now1

Likely coming2

Worth watching3

Mobile Paymentsf In store customer trackingff Show-rooming

g In-store technologygHybrid fulfillment g Intelligent route mapping





P r i n t e d

McKinsey & Company | 3SOURCE: McKinsey Consumer Digital Excellence (CDE); eMarketer; June 2013

Shift in retail marketing spend to digitalHAPPENING NOW

1a

Winners:

▪ Companies that areahead of the adoptioncurve in overall digitalmarketing as % of sales

▪ Companies that are

investing in tools tooptimize digitalmarketing spend

▪ Companies that have apipeline of talent fordigital marketingexecution and strongintegration of digitalmarketing into theiroverall marketing group

US retail industry digital ad spending, 2011-2017

Billions, % of total digital ad spending and % change

$13.31$12.45

$11.48$10.42

$9.35$8.21

$7.17

22.0%22.0%22.1%22.1%22.3%22.3%

22.4%

201716151413122011

Digital and spending% of total digital ad spend

“For which digital marketing tactics are you spending more in 2013 than in

2012?”

32%

38%

49%

52%55%

63%

80%

Affiliate programs

Comparison-shopping engines

Social networks

Email to house list

FacebookNatural search optimization

Remarketing/retargeting

Note: CAGR (2012-17) = 10.2%; includes desktop, laptop , phones and tablets





P r i n t e d

McKinsey & Company | 4SOURCE: McKinsey Consumer Digital Excellence (CDE)

Cross border ecommerceHAPPENING NOW

Winners:

▪ Retailers that moved early toimplement solutions likeFiftyOne

▪ Retailers in categories that are

hard to source in specificcountries (electronics,apparel)

▪ Companies that are globalmarketplaces (eBay, Amazon)

▪ Companies that enable crossborder transactions(fulfillment, customs enablers)

2020

6.8

2010

3.9

BtoC ParcelsBtoB Parcels

+75%

1b

Global eCommerce cross-border trade

$ bn





P r i n t e d


Extended aisle

Approximate

# of SKUs Category

Percent of SKUs by price

level

144

+1,928%

2,920

890

+263%

3,2285-7 yr

board

games

13%13%$25-50

85%62%<$25

1%8%$50-100

1%18%$100+

33%15%$25-50

6%3%<$25

48%28%$50-100

13%55%$100+

HAPPENING NOW

Winners:

▪ Retailers in “long tail

categories” (music, apparel)

who are moving fast toexpand assortment and

D2C warehouse capacity▪ Companies with successful

marketplace offer(e.g. LaRedoute)

▪ Retailers with assortmentmomentum (i.e. those thatare hubs for specificcategories and are

generating scale advantage)

1c

Men’s

coats

HAPPENING NOW





P r i n t e d

McKinsey & Company | 6SOURCE: Amazon financials; McKinsey analysis

18

16

14

12

10

8

6

4

20

Q4Q3Q2Q1Q4Q3Q2Q1

2012

49

30

18

2011

35

24

11

Retail

Marketplace

2011 2012

62%

27%

38%

Marketplace is driving adisproportionate share ofGMV growth, with FBA

CAGR reportedly >75%

30% 31% 32% 34% 35% 37% 39% 40%

40% Marketplaceshare

Extended aisle – Amazon marketplace

US GMV split by Retail/Marketplace$ Billions

US GMV$ Billions CAGR

HAPPENING NOW

1c

HAPPENING NOW



L a s t M o d i f i e d 8 / 6 / 2 0 1 3 6 : 2 5 P M I n d i a S t an d ar d T i m e

P r i n t e d


Mobile commerce

% of users who have

made purchase with

their mobile phone or

tablet by category 12

20

DIY

Large Appliances

86.968.3

52.238.4

24.713.6

2012 2013 201520142011

+45% p.a.

2016

1 eMarketer, Jan 2013 (includes sales on tablets)

HAPPENING NOW

Users are increasingly open to using their mobile devices to

make purchases

US Retail mobile commerce sales1

$ Billions

Winners:

▪ The major winners areeBay and Amazon, due tohigh number of existingcustomers and onlinetransactions that are easilyexecuted (One click/Paypal)

▪ Also, companies who arein “browse” categories

where people will researchon mobile devices

▪ Others that are investing in

consumer enablementthrough their application

1d

HAPPENING NOW




P r i n t e d


Analytics/personalizationHAPPENING NOW

24

6

5

9

12

-1

Big boxretailers

Onlineretailers

Grocers

Revenue 1999-2010

11-year CAGR

Insight-driven companies out-perform peers

1e

Winners:

▪ Companies who have alegacy of data analytics,especially those with strongloyalty cards

▪Evidence that the company isusing data across the range ofpotential areas: assortmentplanning, segmentation andtargeting for marketing

▪ Companies with strong tieswith analytics companies orthe ability to hire store datascientist resources

HAPPENING NOW




P r i n t e d


Tesco embeds customer insights across multiple functions and formats

Impact

Saved £300 million inpromotion expensewhile increasingmarket share

40% of shoppers are"loyal" (i.e., buy 70%+of their groceries atTesco)

Customer complaintsdecreased by 75%

Analytics/personalization – Tesco exampleHAPPENING NOW

Assortment

▪ Informs creation, tailoring and review of ranges based

on store-specific customer mix and product-specificroles by customer segment

Store

Development

▪ Site selection informed by customer attributes▪ New formats based on customer occasion insight

(potential for 8 formats)

Marketing

▪ Enables proactive targeting of customers who have

not recently shopped at a Tesco with loyalty incentives▪ Enables co-branded direct marketing campaigns, e.g.,

Nestle Purina services, advice and product offersmarketed with Tesco Pet Insurance

Pricing

▪ Informs pricing decisions and investments withcustomer-specific elasticity data, e.g., price cutsprioritized based on items purchased most frequentlyby the most price-sensitive of customers

Product

Development

▪ Informs new product launch decisions – e.g., launchof Tesco Finest using Clubcard customer profilessurpassed sales targets

1e

HAPPENING NOW




P r i n t e d

McKinsey & Company | 10SOURCE: Multichannel pricing survey, January-February 2012 : Question 22

Show-rooming is a growing phenomenon which

significantly impacts customer behavior

1 Percent of respondents who claim that they used their cell phone or smart phone when doing price research in the last 6 months;average across CE and APP

50

13

+37

20122010

Mobile price checksare increasing …1

When do consumers use mobiledevice to compare prices

Percent

… they occur early in the consumer journey …

4

31

65

After I visit

the store

While I amat store

Before I go

to store

How use of mobile device in-store

changes customer action

Percent

… and have direct impact on behavior

17

18

65

Would notaffect purchase

or futuredecisions

Would buyitem, butimpact futuredecisions

Would delaypurchase/buy

elsewhere

9

-1

-8

HAPPENING NOW

Increasing

Decreasing

Change since 20101f

HAPPENING NOW



L a s t M o d i f i e d 8

/ 6 / 2 0 1 3 6 : 2 5 P M I n d i a S t an d ar d T i m e

P r i n t e d


Show-rooming behavior is largely consistent across categories

Visited another

retailer’s Web site

Used a price com-

parison site/app

Visited the same

retailer’s Web site

29

25

22

36

29

33

42

24

19

20

26

34

1836

39

24

42

20

26

39

50

Home décor

Furniture

DIY

Office supplies

Household productsHealth and beauty

Clothing

Grocery

Video games

DVD/Video

Books

Electronics

Computer HW/SW

Music

Auto parts

Pets & pet supplies

Large appliances

Sporting goods

Jewelry

Footwear

Toys

29

39

27

43

16

34

41

30

37

25

45

4

3222

28

36

22

28

28

33

35

29

14

10

36

27

30

28

14

26

9

32

34

2215

16

20

41

34

24

37

44

HAPPENING NOW

Type of mobile research done while in Store

1h

Winners:

▪ The major winner is Amazon, due to existingcustomers base and lowprice perception

▪ Lowest price retailers inspecific categories willalso win due to “price

check” nature

▪ Loser are companies incommodity categoriesespecially when they arefailing to differentiate,e.g. through unique

products / bundling

HAPPENING NOW





P r i n t e d


Cross-channel integration and fulfillment is

important to customers

6

8

6

20

16

34

34

44

29

49

42

5

100%

42

31

48

61

60

66

Important or extremely important

Somewhat important

Not important

% using service Importance to those using service

SOURCE: iConsumer 2012 - RT16bb

Importance of multichannel functions among survey participants

% of respondents; N = 4,877

7Used an online web siteto customize the products I buy

Access enhanced online content for

product research, purchase in-store

10

Buy online and returnthe item to the store

25

Buy online, butpickup in the store

37

Print coupons online

use them in a store

52

Check online to see if the store hasa certain item available

52

HAPPENING NOW

1g

HAPPENING NOW





P r i n t e d


Many retailers are using their store footprint to close the service gap

vs. Amazon’s Prime and free shipping offers

Buy

online instore

Buy

online,

return in-store

Reserve

online,

buy in-store

Same-

daydelivery

In-storepickup

Ship-

from-store

Winners:

▪ Fast movers, sincecomplexity of somesolutions takes time toimplement

▪ Apparel companieswhere returns are alarger proportion of thebusiness

▪ Companies servinglower incomeconsumers whereshipping costs are alarger consideration inchoice of retailer

1g

HAPPENING NOW





P r i n t e d


Store size reduction/repurposing of space is required by

retailers who are seeing sales slow in big box stores

49

85

25

33

162

166

6

68

168

220

4

64

111

10

16

43

56

152

131

120

1/3 rd of retai lers

are bui ld ing sm al ler

stores compared

to 5yrs ago

20112008

Average new store size

Square feet, 000

Winners:

▪ Companies with less leaseobligation, who have moreflexibility to downsize stores

▪ Companies who are instable categories (i.e. notmoving online too quickly)

▪ Companies that can useconsignment stores (e.g.dept. stores) or who can

increase ancillary usage ofexisting store space

1g

HAPPENING NOW





P r i n t e d


Changing demographics

Millennial

Spend (B)2

65+

Spend (B)1

Hispanic

Spend (B)1

2011

$370

$530

$360

2020

$1,120

$950

$680

% TTL

12%

17%

11%

% TTL

27%

23%

16%

Key demographics segments driving growth in US

retail spend

Winners:

▪ Companies with strongconnections to emergingdemographic shifts: e.g.drugstores/health & wellness

stores for boomers▪ Retailers who invest in new

formats tailored to the needsof emerging segments, e.g.hispanic grocery

▪ Companies moving to digital

social if focused onmillennial shoppers

1h

HAPPENING NOW





P r i n t e d


Image based social networks have dramatically higher

impact on shopper behavior

13

16

19

11

18

37

46

15

10

18

18

22

41

48

15

23

17

28

24

53

37

Pinned multiple itemsfor a wish list

Pinned somethingalready bought

Purchased onlineafter seeing pinned

Purchased in-storeafter seeing pinned

Pinned multiple itemsto plan an event

Pinned somethingwanted to buy

Did more reasearchon an item

All

Women

18-24

Impact on shopping among those using those Pinterest in the last 6 months

Percent of respondents (multiple response allowed)

71

29

Male

Female

Winners:

▪ Highly emotive productcategories, especiallythose with a high level ofconsumer “involvement”

or creativity (crafts,

homewares)

▪ Categories where visualelements are a natural fit(Apparel, beauty)

▪ Companies that areleveraging user base as

advocates for the brandand have clear socialstrategies

2a

HAPPENING NOW





P r i n t e d


Next day/same day shipping – Amazon has reached

sufficient scale to make this an affordable reality in the US

eCommerce avg.

eCommerce'leading edge'

1 Assumes one day handling time; Cost assumes UPS rates for a 2 –lb parcel with 40-70% discount volume dependent

Standard Ground(1-5 days)

Buy Monday, receiveWednesday (2 days)

N u m b e r o f e

D C s

Buy Monday, receive Tuesday (Next day)

$ 3.93

4 $ 4.02

$ 4.133

2 $ 4.32

1 $ 4.52

2.0x

$ 2.2635

30 $ 2.46

10 $ 3.38

6 $ 3.79

5

$4.22

$2.26

$3.79

+ service impact

$ 2.26

$ 3.79

$ 3.93

$ 4.02

$ 4.26

$ 5.44

$ 7.74

3.4x

$ 2.46

$ 3.38

$4.83

$3.79

$2.26

$ 3.65

$ 10.03

$ 3.17

8.5x

$ 14.53

$ 16.42

$ 17.46

$ 19.25

$ 23.39

$ 26.84

$21.26

$14.53

$3.17

Cost of promised ‘payment-to-doorstep’ delivery speed1 by number of eDCs, USD

96% require deliveryvia Overnight Air

2b

91% of shipments be

sent via Ground

S f fLIKELY COMING




P r i n t e d

McKinsey & Company | 18SOURCE: Company documents, press releases; team analysis

Same day shipping – the rollout of Amazon Fresh, ship from store, and

third party fulfillment services will be the catalyst

▪ Amazon Fresh is slated to be in rollout mode, withadditional offers in California expected later this year

▪ Analysts have suggested Amazon Fresh will be in 20 MSAs by the end

of 2014

▪ Each Amazon Fresh warehouse includes over 100k of the fastest moving

non-food items to be delivered with grocery deliveries▪ 1 hour delivery window, can be either attended or not

▪ Your order can be picked and delivered in 6 hours if you order overnight

Technology that integrates with themerchant's ecommerce platform,connecting you with our network oflocal same-day carriers.

Shoppers in some geographies canuse eBay Now to order items fromhundreds of stores, including BabiesR Us, Best Buy, Free People.

Next day, and potentially same day are next on the

agenda led by potential Fresh rollout

Winners:▪ Amazon will be a

winner due to supplychain advantage

▪ Companies withsufficient scale tosupport ship from

store▪ Higher margin

retailers whichcourier type deliveryis economic

▪ Grocery players withonline pickup/

delivery might win asinstant fulfillment ofonline ordersbecomes expected

2b

P d t li tiLIKELY COMING




P r i n t e d


Product personalization2c

50% of shoes sold through Nike.comare personalized

NikeID.com representative

Winners

▪ Apparel categories withsufficient volumes andflexible enough supplychains to make theeconomics of customordering viable

▪ Strong brands withhighly engagedconsumers and anexisting direct toconsumer (storeoffering)

▪ Other “design”categories – home andconsumer electronics

Product personalization is catching the attention of

major brands

Incremental benefits

▪ Lowers channel conflict for brands selling direct

▪ Higher customer engagement▪ Increased customer information, especially for

assortment planning and optimization

“

Thi d t d t b d t t t t l ti d i thLIKELY COMING

2d




P r i n t e d


Third party data can be used to contact customers real time during the

shopping experience

Visa’s Real-Time-Messaging service enables retailers

to reach customers real-time and on-location Winners▪ Large aggregators of

customer data: Socialnetworks, Phonecompanies

▪ Large aggregators of

cross retailersinformation: Creditagencies, payments

▪ Retailers who developcapabilities andrelationships early andexperiment

▪ Retailers with access tothe consumer to delivertargeted messaging

Susie grabs a lunchat the Westfield Malland pays with her

VISA card

The Gap in the mallis automaticallyalerted by VISA that

Susie is upstairs

Susie gets apersonalizedmessage from GAP!

Welcome to

Gap Mobile 4 U

Monica, come to our

store and enjoy 20% off

until 2 pm today!

2d

As in Europe lockers and pickup points will be increasingly adoptedLIKELY COMING

2




P r i n t e d


As in Europe, lockers and pickup points will be increasingly adopted

as categories continue to shift online, especially grocery

Grocery pickup point implementation in France Winners

▪ Amazon – alreadyinvesting in severallocker partnership(through 7-11 andStaples)

▪ Grocers who invest in“pickup locations” and

make non-food avai-lable to food buyers(30% uplift in non-foodsales for Amazon freshcustomers)

▪ Retailers or third partyowners of lockers whocan rent out space(Macy’s., Google)

1,599

1,072

524426

0

500

1,000

1,500

2,000

2012(end August)

201120102009

Shop Anywhere Online, ship parcelto your nearest BufferBox, pick upyour delivery using your PIN

2e

US consumers are open to mobile paymentsLIKELY COMING

2f



L a s t M o d i f i e d 8 /

6 / 2 0 1 3 6 : 2 5 P M I n d i a S t an d ar d T i m e

P r i n t e d


US consumers are open to mobile paymentsPercent of all respondents indicating a particular attitude1

Early

adopter

I’m an early adopter, I enjoy trying new things with

my mobile phone and payments is a big part of that

Resistant I’m resistant, I like the way I pay today and don’t

want to change anything

Indifferent I could care less, my current bank cards work fine.

Mobile payments don’t help me

Skeptical I’m skeptical, this is still new and I think there are

risks in making the transition

Open I’m open; if my phone has it and merchants accept

it, then I’ll give it a try

Selective

user

I’m selective; if mobile payments delivers value to

me, I’ll embrace it

Receptive

Open

Unreceptive

6

9

20

29

24

12

DescriptionType United States, %

1 <_________>

2f

Though the US still lags many developingLIKELY COMING

2f




P r i n t e d

McKinsey & Company | 23SOURCE: McKinsey Mobile Payments Global Survey

Though the US still lags many developing

markets due to lack of need/common approach

1 Only owners of smart-phones included in analysis2 Question: “How frequently have you performed these types of mobile payments (never, rarely, occasionally, frequently)?”s

Frequently

Occasionally

Mobile PaymentActivities United States Brazil India

Winners

▪ Very hard to tell

▪ Likely to be the phonecompanies with somekind of consortiabacking, sincehardwareimplementation ismajor barrier toadoption

▪ Some software basedsolutions may take off,e.g. through codescanning

▪ Closed / proprietarysystems make sensefor regular purchases(Walmart / Starbucks)

Transact atPoint of Sale

15

4

11

Send PersonalPayments

154

11

Perform RemotePayments

246 18

Conduct MobileCommerce

399 30

Buy MobileContent

15 4631

Buy Applications

5820 38

13 30

7130 41

22 6139

3610 26

4316 27

4413 31

43

4417 27

5122

37

29

4821 27

6122 39

7233 39

6528

2f

Percent in category, Smartphone users-only

A range of technologies are enhancing the store experience that willLIKELY COMING

2g




P r i n t e d


A range of technologies are enhancing the store experience, that will

enhance the user experience and increase productivity

Winners▪ Retailers that invest in

tech for store-operations will benefitas lower labor costs /higher sale productivitywill become

increasingly critical▪ Higher end apparel and

other high marginretailer will be able toinvest in store tech and justify the investment

▪ Companies that learn

to manage store techportfolio efficiently anddo not over-invest inlow ROI solutions

Productinformation

Extended

assortment

Augmented reality

Temporary andvirtual stores

Payments

Personalization

In-store

Out-of-store

Efficiency/

Productivity

Sales

driving

Mobile store reporting andmanagement tools

Mobile activity

management

Automated back rooms

Intelligent

shelf facings

Predictive queuemanagement

Next generationself check-out

Remote on-shelf visibility

Emerging store enablement technologies

2g

Store technology – Burberry’s London flagship is designed toLIKELY COMING

2g




P r i n t e d

McKinsey & Company | 25SOURCE: Press search

Store technology – Burberry s London flagship is designed to

resemble the brand’s website, with 100 screens in-store

“Burberry Regent Street bringsour digital world to life in aphysical space for the first time,where customers can experience

every facet of the brand throughimmersive multimedia contentexactly as they do online”

– CEO

“Store associates carry ipads sowe can order goods that are notin store. Currently in our Londonstore over 10% of orders areplaced using the iPads”

– Head of ecommerce

2g

Social / local gaming – check in platforms help driveWORTH WATCHING

3a




P r i n t e d

McKinsey & Company | 26SOURCE: Company website

Social / local gaming check in platforms help drive

traffic in local businesses

▪ Mobile game platform that allows players to goplaces, do challenges, earn points, share whatyou’re doing and where you are, and unlock

badges and rewards

▪ When players go to a place (e.g., restaurant,museum, store), they can check-in, takepictures, and complete an activity that will earn

rewards

▪ Challenges are easy, six-second fun things

▪ Rewards include things like free ice cream orcoffee, 10% off your dry-cleaning, etc. Localbusinesses build their own rewards and they canbe redeemed from the SCVNGR app

▪ Dunkin’ Donuts partnered with SCVNGR to offerguests the chance to win free lunch for a year

▪ ~2 million user base

“A game about doing challenges at places.”

3a

Local – Snapette allows users to share the content ofWORTH WATCHING

3a



L a s t M o d i f i e d 8 / 6

/ 2 0 1 3 6 : 2 5 P M I n d i a S t an d ar d T i m e

P r i n t e d

McKinsey & Company | 27SOURCE: Company website; Press search

Local Snapette allows users to share the content of

local boutiques

▪ Launched in 2011, Snapette is a mobile shopping app

designed for discovering and sharing fashion productsavailable in nearby stores

▪ How it works:

– Users snap a photo on Snapette and upload it withbrand, price, and location information

– If user sees something they like on the app, they havethe option to "love" the item

– Pull up the item's store information and get directionsto the store

▪ For its brand and retailer partners, Snapette provides a

real-time and targeted marketing platform to drive foottraffic to stores and grow a loyal customer base

▪ Retailers can create profiles and display products and

information about promotions by sending pushnotifications specifically designed to alert users about anearby sale

▪ Now have 100+ retailers and boutiques on boardincluding Diane von Furstenberg and Vince Camuto

3a

Social commerce – leverage the “always on” consumerWORTH WATCHING

3b





P r i n t e d

McKinsey & Company | 28SOURCE: Company website, BuilderOnline, iTunes App Store

Social commerce leverage the always on consumer

as your merchant …

▪ Social photo crowd-sourcing program that allowswebsites to collect, curate, and display photos theusers in their community are taking

▪ Acts as a technology platform that helps publishers,agencies, and e-commerce sites integrate photosfrom social media sites like Instagram and Twitter

▪ For e-commerce sites, Olapic provides a product-

specific widget enabling e-tailers to showcase usergenerated photos of the product in the page asphoto-reviews

▪ Internal tracking provides metrics that help retailersdetermine what item is driving more conversionsand sales than others

▪ Retailers using the system have found ~2-5% of the

conversions result from clicking on user-generatedcontent

▪ Growing customer base includes: Freepeople.com,lululemon, Conde Nast, Pepsi

“Now, we have proven it that by having photosin the e-commerce experience, browsers are

converting [into customers] at the rate of

two or three times more than people who

don’t interact with photos. That was one ofthe insights we had over the holiday season.”

– Jose de Cabo, co-founder

3b

Social commerce – enable transactions at any time, andWORTH WATCHING

3b





P r i n t e d

McKinsey & Company | 29SOURCE: Company Website; Literature search

y ,

from any platform

▪ Chirpify launched in 2012 and is the only in-stream payment platform that uses Twitter andInstagram to conduct transactions

▪ How it works

– User signs up for service and enters hisPayPal and shipping details

– Visit any item that is being sold via Instagram

– tagged with #instasale – and enter theword "buy" in the comments for an instanttransaction to take place

▪ Recently expanded the platform to include thesale of digital goods

▪ In addition to an e-commerce platform, Chirpifyalso enables peer-to-peer payments and

donations

▪ CEO says 50% of members have made

transactions on the platform

“We want to create aportable, frictionless wayto check out in atransaction," he said.

"We want to make itdead simple to buythings.”

– Chris Teso

3b

Geo-targeting marketing platformsWORTH WATCHING

3c





P r i n t e d


g g g p

1 Frost & Sullivan, 2012 North American Mobile Advertising Best Practices Research White Paper

▪Location-based advertising experience thatconnects advertisers to on-the-go-mobileaudiences using the world’s largest location-based interactive media channel

▪ Advertisers can identify and deliver ads to theirdesired audience segments based on a person’s

physical location

▪ Network consists of over 55 million users and250 global partners

▪ Beta testing partners have seen 30-40%

increase in clickthrough rates in ads that useLocation Graph data1

▪ JiWire’s Insights group found that 85% of

mobile consumers use their phone whileshopping in-store

3c

Geo-targeting marketing platformsWORTH WATCHING

3c





P r i n t e d


▪ Location-based push SMS product (ShopAlerts)

▪ Advertisers define a geographic boundary in whichusers who have opted-in would receive a push-SMS from the advertiser, typically in a form of apromotion or advertisement to visit the store

▪ Research study found that 42% of consumers 18 – 34 interested in text alerts from marketers1

▪ Over 10 million opt-in ShopAlerts users and130 participating brands

▪ 50% of consumers visit a location after receivingShopAlerts mobile offers2

▪ On average 22% of consumers make purchases

after receiving ShopAlerts mobile offers2

▪ 46% of ShopAlerts consumers find it easier toget offers, deals and information on their phonesvs. traditional coupons or emails2

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1 Placecast-Harris Poll, 2010 2 Placecast ShopAlerts Internal Data 2012

Continued rise of the “mega-intermediary” will lead to more WORTH WATCHING

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customer-centric enablement of shopping

Customer access - device

Customer access - search

Customer transaction data

Deep cross category assortment

Payments platform

Delivery network

Local commerce / search

User generated content

In addition to deep technology

skills, these players have:

Three players have the potential to

deliver customer-centric, cross-retailer &

category shopping experiences

Shipwire caters to small businesses with bigWORTH WATCHING

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McKinsey & Company | 33SOURCE: Press search, company website

shipping needs

▪ Founded in 2006, Shipwire operates sevenwarehouses in U.S., Canada, China and the UK,and plans to expand into Germany, Brazil and Australia

▪ Provides outsourced order fulfillment servicesfrom a network of global warehouses connectedby a software platform

▪ Integrates with a company’s existing order

capture systems—partners include eBay and Amazon—enabling customers to view real timeshipping rates as well as inventory status

▪ Offers same-day shipping, manages freightmovements, and is capable of providing

expedited delivery service▪ Shipwire works with major online storefront

solutions (e.g. BigCommerce, 3Dcart)

“A game about doing challenges at places.”

Store tracking through mobile (and face recognition)WORTH WATCHING3f




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Euclid analytics measures store traffic by tracking the wi-fi signals from

customers cellphones.Example real-world metrics they provide:

CAPTURE RATE: How well do your window displays pull shoppers intothe store? Find out your Capture Rate and actively improve it.

REPEAT VISITOR RATIO: Are most of your shoppers regular customersor first-timers? Optimize for the segment that drives the most sales.

WALKBYS: How much business is walking right by the door? Launchyour sales on the days with the highest Walkby traffic.

VISIT DURATION: How long do your shoppers spend in the store? Arethey engaging with staff or waiting in line?

VISIT FREQUENCY & RECENCY: How often do shoppers come in thedoor each month? Are your daily deals generating loyal customers?

ENGAGEMENT & BOUNCE RATES: Are shoppers staying long enoughto make a purchase? Or do they “bounce” in just a few minutes?Measure the percentage that stay for a period of time you specify.

Point inside helps users navigate malls and storesWORTH WATCHING3g




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▪ Mobile shopper engagement platform that adds

“store mode” capabilities to retailers’ brandedmobile apps

▪ Enhances shoppers’ experience through the

graphical presentation of exact product locationsand efficient routes through store to fulfill ashopping list. Personalized offers, productsuggestions, coupons and more are delivered in

real-time based upon each customer’ location,intent, activity and profile

▪ Provides deep customer insights to retailers anddelivers highly personalized content based oncurrent purchase intents, past purchasebehaviors and the shopper’s location in the store

▪ Drives 5x more shopper engagement thanidentical apps without in-store location andassociated store-centric features1

1 Press release, Point Inside, Feb 2013

Stores being used as showrooms for onlineWORTH WATCHING3h




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1 Press release, Point Inside, Feb 2013

▪ Shanghai-based homeware brand

homes-up.com has added two physicalstores to its online-only offering.

▪ Nothing can be bought and taken awayfrom the stores, instead they act as aweb-front to allow shoppers to see andtouch a curated selection of items soldonline.

▪ Items ordered online can also becollected in-store.

▪ Bonobos produces men’s made-to-order pants and is expanding

into other mens apparel lines (online)▪ Partnered with Nordstrom to provide “real world” access to clothes

▪ Also opened a series of “fitting stores” where customers can try on

clothes to get fit and then replenish online

▪ Fitting stores second floor offices, located in major cities

795533 trends in ecommerce hype vs reality

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