the drive to-store

Thesis Advisor: X. Weppe

November 2013

Jacques Mouiren

« EDHEC Business School does not express approval or disapproval concerning the opinions given

In this paper which are the sole responsibility of the author. »

“ The Drive-To-Store

strategies for

Manufacturers using

indirect distribution

channels”

Master Thesis for the EDHEC Diploma SOC (Strategy & Organization Consultancy

Table of content

Introduction…………………………………………………………………………... 1

Thesis Plan and Methodology……………………………………………………....... 2

I) Contextualization and main existing web-to store strategies……………... 6

A) The context of the Cross-Canal study……………………………………. 6

B) Highlight of the main existing web-to-store strategies…………………… 12

a. Click & collect

b. Product Locator / Store finder

c. The Geolocated SMS / MMS

d. e-Couponing

e. FSIs / Circular

f. Shopping list apps

g. Social2store

h. Personalized emailing

i. Reward programme

j. In-store cash back

C) Assessment Matrix and results…………………………………………… 29

II) The best strategy which applies to Manufacturers ……………………….. 31

A) Retained Strategy: The E-coupon strategy………………………………… 32

a. Context of how this strategy could be applied

B) The different aspects to be tackled…………………………………............ 34

a. The miscellaneous challenges project-related

b. The financial aspect

c. The Customer Relation Management & Data Control aspects

d. The in-store traffic control aspect

III) Final recommendations………………………………………….................. 42

A) Contextualization of the project……………………………….............. 42

B) Project recommendations……………………………………………… 43

C) Example of project…………………………………………………….. 45

Conclusion……………………………………………………………………………. 51

Bibliography………………………………………………………………………….. 53

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Jacques Mouiren

The Drive-To-Store strategies for Manufacturers using indirect distribution channels

Introduction:

The purpose of this thesis is to do a critical appraisal about the Web-To-Store main strategies

for Manufacturers with non-owned point of sales. Should this study be successful and lead to

feasible actions, it is likely to be used as a premise paper for a start-up company project. The

company’s purpose would be to offer these types of companies (Brand Manufacturers) a

Turnkey Solution that they could use in order drive traffic in-store. “What efficient tools

would they have to set up to be successful in bringing physical traffic in-store through digital /

virtual actions?”

Problematic

How manufacturers (such as Dell, Samsung, Toshiba...etc.) using indirect distribution through

retailers can lead efficient actions in bringing qualified physical traffic to their products in-

store? How to capture the qualified out-store traffic (web, app, technologies) and manage to

bring it in-store in the retailers’ outlets?

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Jacques Mouiren


Thesis Plan and Methodology

I) Contextualization of the subject + Track record of the main existing web-to store

strategies by main categories

A) The context of the Cross-Channel study

B) The Web2Store context + the main existing strategies by categories

a. Click & collect

b. Product Locator / Store finder

c. The Geolocated SMS / MMS

d. e-Couponing

e. FSIs / Circular

f. Shopping list apps

g. Social2store

h. Personalized emailing

i. Reward programme

j. In-store cash back

This chapter will be mainly used to highlight the main strategies which have been

used to drive traffic in store from web-related technologies. Each of these strategies will be

described and assessed in terms of Advantages / Risks for Retailers (such as Best buy for

instance) on the one hand and for Brands / Manufacturers on the other hand. The assessment

will be done for the 3 following main PLAYERS:

- PLAYERS 1 > The retailers (Brick & Click): therefore owning their own point of

sales and carrying Manufacturer Products (selling Apple, Samsung, Toshiba…) + a

website available for transactions (Walmart, Best buy, La Fnac, Staples…)

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Jacques Mouiren


- PLAYERS 2 > The Brands (Brick, Clicks & flips –catalog), which own an online

catalog on their owned transactional website + have their own owned point of sales >

Guess, Quiksilver, Sephora…etc.

- PLAYERS 3 > The Brands (mainly called Brand Manufacturers) which do not control

their distribution channels and that are therefore only using other indirect channels:

through retailers (ex: Samsung selling a Galaxy Tab through Best buy OR Bose

selling headphones through La Fnac France

C) The assessment matrix and results

Each strategies will be graded under a Matrix for each player, 1 being “Likely to

very low”; 5 being “Likely to be very high” > A summary will be drown in a recapitulative

table. The strategy for the PLAYERS 3 obtaining the highest score will be retained for further

assessment in Chapter 2. In Part I-B, after each description of the strategies, we will justify

each grade given to the Players 3.

Criteria of assessment are the following:

� Capacity to boost in-store traffic

� Ability to gain new customers

� Ability to gather qualified data for CRM

� Facility to measure or track the actions

� Facility of implementation (complexity, costs…)

� Ability to gain in Loyalty

� Capacity to improve brand awareness

� Capacity for the strategy to be independently developed

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Jacques Mouiren


Importance coefficients have been applied to each criterion in order to reflect as much as

possible the reality for the study.

Grades and comments are related to discussions that I had with several actors during my

experience at the Shopbot group. Ecommerce manager, SEM/SEO manager, Paid Search

manager and other industry-related actors gave their insights on the topic. Among those we

had companies such as:

- Staples (Office supply retailer)

- Henrys (Camera retailers)

- New Balance (running shoes manufacturer)

- Dell (PC / electronics)

- HP (PC / Electronics)

- Bose (Sound system brand)

- Mexx (Clothing Brand)

- Buffalo Jeans (Clothing Brands)

- The Agency in charge of the online marketing campaigns for Quiksilver / Roxy

(IProspect)

- The agency in charge of the online marketing campaigns for Saks Fifth Avenue a

massive US fashion retailers (Channel Advisor)

- Other smaller / more local players

II) The best strategy which apply to Manufacturers which do not control their retailing

channels and further assessments of feasibility?

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Jacques Mouiren


This part will be the applied result of what has been screened as the relevant Drive-

to-store strategies for Brand Manufacturers also called Players 3 (P3) in the study. This part

will enable us to go further in the study.

In here, we will go into detail by identifying the global benefits and risks in a deeper way.

For the retained strategy, we will present how such a strategy could be applied to the Players

3 as well as provide some details on the following criteria / challenges:

• The Financial challenge (how costly is it to implement such or such strategy)

• The CRM challenge (how hard is it to control the collected data + how qualified is this

data, would it be relevant to reuse it in future actions.

• The Control challenge (how can manufacturers control the impact of pushing physical

traffic to retailers)

• The other main specific challenges (miscellaneous) …

Given the risk assessment provided in this part, we will try to provide a concrete and applied

solution that could be offered to ShopBot / Makazi (former Lead Media group) as a new

source of revenue.

III) Final recommendations + Draft of a concrete example applied to ShopBot.

Given the assessments for the strategy retained for the players 3 and given the risk

assessment achieved in Part II, what kind of tools or Turnkey Solution could a startup provide

in order to meet this high challenge being “How Brands Manufacturers can drive more traffic

to their products in stores that they do not own?”

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Jacques Mouiren


I) Contextualization and main existing web-to store strategies

A) The context of the Cross-Canal study

This study is right at the center of today’s questioning of what will be the next

strategies to create value on a retail market which can be considered crowded in most

developed countries. The big trend of the last 10 years has been to focus on ecommerce only,

thinking that the Brick-and-mortar businesses were going dead and there was a genuine

necessity to switch to an online strategy. This is when the large internet companies actually

set up: they are called the Pure Players. Among them, we can find Google, Amazon and EBay

for instance.

Starting in 2011, a new and very singular phenomenon appeared: Ecommerce is a significant

and relevant channel but this is not enough. Web users or online shoppers still have the need

to be in touch with the product. They need to be advised, they want to feel the item, get the

product right away and they also want to feel that they count as they are willing to engage in a

product or Brand. Following this new trend, we were able to observe the Pure-Players moving

toward the Brick and Mortar model. For instance, Amazon has decided to tackle the physical

market by selling its in-house made electronic tablet “Kindle” through physical retailers such

as the North American retailer Best Buy 1. Other Amazon physical stores were also opened,

using different names, such as The Beauty Bar 2, a luxury store on Long Island owned by the

digital giant Amazon. Google has also been thinking about opening retail stores and is still in

the debate. Very often, opening this kind of physical store is THE way for these Pure Players

to “brand” their in-house built products such as The Google Glasses or the Amazon Kindle.3

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Jacques Mouiren


The challenges can be considered different for every business model, but the sure thing is that

every company needs to find sustainable solution on a market where the line between physical

and online retailing is always getting more blurry. Given these preliminary observations, the

Brick & Mortar companies are facing 3 main challenges:

a) Their business models need to evolve to enable these players not to lose market shares

against Pure Players or ecommerce-focused stores.

b) These companies have to lead efficient and global growth strategies to make

economies of scale by remaining close to the customers at the same time.

c) These traditional players have a real need to focus on Cross Channels strategies to

tackle both the online and the physical market.

According to the CMO of La Fnac, one the French largest Cultural and Mass

Market electronics items retailer, a cross-channel customer averagely spends six times more

than a mono-channel customer 4. This is to say that the real answer for companies nowadays

lays in the creation of Cross Channels strategies where no channel is left behind, where every

piece is important. Nowadays the web can’t be considered anymore an isolated channel,

where consumers’ behaviors are different from other channels. It needs to be integrated as

part of a global Cross-channel strategy contrary to a Multi-Channel strategy. In a Multi-

channel strategy, every channel is managed separately, has its own tools and database. The

information is therefore divided and there is a strong lack of coordination, each channel

competing against the others.

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Jacques Mouiren


Cross-Channel Graph: (App 1)

Part of the answer to those needs and lacks is the establishment of what is called

“Web-To-Store” strategies. A simple definition of such a strategy would be “How to bring

physical traffic in-store through digital / virtual actions?”

There are many ways to do so, but each means is not necessarily efficient for every type of

players. It really depends on the current selling channels which are being used by these

companies. Do they control their POS (Point of Sales)? Are they using indirect channels?

In this study, we will mainly focus mainly on one type of players among 3 types overall: P1,

The retailers; P2, The Brands; P3 the “Manufacturers”. (See diagram here after)

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Jacques Mouiren


Diagram of the studied players and focus: (App 2)

As we can see on the chart here above, the focus will be made on the Players 3 that we will be

calling “the Brand Manufacturers” or Players 3 (P3) along the study.

Who are they exactly?

� Brands manufacturing / designing their own products.

PLAYER 1 > The retailers (Brick

& Click)

-Own their Point of Sales

-Carry Manufacturers and Brands

products (Apple, Samsung, Toshiba…)

-Own a transactional website (Best

buy, La Fnac, The Home Depot...)

PLAYER 2 > The Brands (Brick,

Clicks & flips –catalog)

-Own their catalogue

-Have their own transactional website

-Have owned Point of Sales (Guess,

Quiksilver, Nike...)

PLAYER 3 > The Brands (mainly

called Manufacturers)

-Don’t control their retailing channels

-Use indirect channel to sell (through

retailers)

Ex: Samsung selling a Galaxy Tab

through Best buy

100%

dependant

Can be 100%

independant

Very likely to have

% of its business

through P1

FOCUS OF THE STUDY

Jacques Mouiren

The Drive-To-Store strategies

� Brands which have

through third party retailers / partners

� Manufacturers which are as a result very depende

� Companies which do not even have a transactional website, but rath

Show room website

Concrete example:

The electronic specialist Sharp

partners within each country. Their website provides

catalogue and provides information about where the appliances can be purchased Online and

Offline 5

Draft: Where to buy the products «

Store strategies for Manufacturers using indirect distribution channels

Brands which have an indirect distribution strategy, meaning that they only sell

through third party retailers / partners.

ich are as a result very dependent on the players 1, the retailers

Companies which do not even have a transactional website, but rath

Show room website with their list of distributors (offline & online)

The electronic specialist Sharp (in Canada for instance) only sells through an official list of

partners within each country. Their website provides information on each product on their


the products « Sharp.ca » (App 3)

10

for Manufacturers using indirect distribution channels

an indirect distribution strategy, meaning that they only sell

he players 1, the retailers

Companies which do not even have a transactional website, but rather a Catalogue /

with their list of distributors (offline & online)

only sells through an official list of

information on each product on their


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Jacques Mouiren


Even tough, the web-to-store strategies have been largely tackled by the big retailers

such as Costco / Walmart and many others; this world remains almost unknown for the other

players P2 and P3 which might have not seen the benefits to lead such actions yet as part of

their global strategies.

This sub-part here below will be used to highlight each main known web-to-store strategies,

by giving for each of them an explanation, a concrete example as well as the benefits and

risks.

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Jacques Mouiren


B) Highlight of the main existing web-to-store strategies:

a) The click & collect model (APP 11)

This strategy corresponds to the fact that a customer will order products online (click) and

go get the product at a pick-up point (collect) of the company he purchased the product from

6. It is a compromise in between online shopping and an actual shopping experience in a store.

It is also possible to book the product (click) and then pay & get it at the pick-up point

(collect). The more specific strategy called “product locator” goes in line with this essential

Web2store technique. 7

Top advantages on the company’s side:

� No delivery costs + general decrease in costs

� Boost the traffic in store

� Enables to be active both Online and Offline and influence both traffics

� Enables to collect data on the user and have track of what has been purchased. This is

considered relevant for the “big data” strategy, useful for online retargeting.

Top risks on the company’s side:

� Implies a reorganization in terms stock management (real time stock verification)

� Applies especially for retailers (P1) or Brands with their own POS – Point Of Sales

(P2)

Jacques Mouiren


Concrete example:

Tesco Click & Collect (App

Grades (see Matrix – App 20

This strategy implies to have a website and a store to collect the

are only dealing with retailers, therefore such a set up would be terribly complex.

The ability to push the users in

brand manufacturer can deal with large retailers and push traffic in their POS.

criteria (In-store traffic boost, Gain of new customers and collecting C

positive impact. Then, speaking about the actions tracking, this would be way too complex as

the Players 3 would have to ask for confidential data as well as find measurement KPIs that

retailers are very unlikely to give away. Questio

customers did I push? What did they buy and how much they spend

large challenges to tackle.

b) Product Locator / Store Finder


lick & Collect (App 4)

App 20) and Justification for Player 3:

his strategy implies to have a website and a store to collect the


The ability to push the users in-store would be fairly interesting. We could imagine that a

brand manufacturer can deal with large retailers and push traffic in their POS.

store traffic boost, Gain of new customers and collecting CRM data)



retailers are very unlikely to give away. Questions such as: “how can I know how many

hat did they buy and how much they spend?”

Product Locator / Store Finder

13


his strategy implies to have a website and a store to collect the products. Players 3


store would be fairly interesting. We could imagine that a

brand manufacturer can deal with large retailers and push traffic in their POS. The 3 first

RM data) could have a



“how can I know how many

?” are likely to be too

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Jacques Mouiren


This strategy consists in setting up a technologic solution which enables customers to find

a store or a product by entering a Zip/Post code or by activating the real-time geolocalisation

on whatever device he is using (Computer, Smartphone, Tablet or other devices connected to

the internet). It requires having a partnership with a Map provider (Google Map / Apple Plan)

or a 3rd party specialized in the map localization strategies such as “yelp.com” for instance.


� Enables to gain in local visibility

� Boosts traffic in-store

� Improves the customer’s experience (availability of the products, where to find it…)


� Can face stock management issues

� Can be hard for a brand to define what retailer is carrying what product

Grades and Justification for Player 3:

The strategy of setting up a store locator or product finder is essential. Almost every brand

manufacturers has set up one. Most of the time they have a sub tab called “Where to buy” (as

seen previously with Sharp Canada in the contextualization part).

The first two criteria (in-store traffic boost & Gain of new customers) could observe positive

impacts. On the one hand, the in-store traffic boosting and the ability to gain new customers

would be likely to be “normal”, this is to say that there is a fair amount of traffic driven by

this type of tools. Even though, this is essential, we cannot say that this is the greatest tool

either as the traffic tracking is almost not feasible. This strategy set up alone is not likely to be

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Jacques Mouiren


the answer to the challenge of driving traffic to the products while being able to track results

and gathering premium CRM data.

c) The Geolocated SMS / MMS

This technique consists in sending a targeted text message or MMS to one’s cell phone

when passing by or being in the area of one of the publisher’s store. 14

A company accesses a large database of telephone numbers and can then send text messages

by time slot and demographics promoting a benefit for the users.


� The reach is quite qualified

� The reach is instantaneous

� Enables to develop the relationship with a customer

� Boost the traffic in-store


� The users must have enable their geolocation mode

� The memorization rate of a text message is low

� Can be technically complicated (MMS), Multimedia format

� Costs for MMS is high > in between $0.80 and $1.00

� The law frame (no sending on holidays in France for instance)

SMS is likely to be used to communicate on simple things on a wide panel of individuals.

MMS should be used to give the users the opportunities to know a new brand or a new

concept as the company will be able to include a logo, image or video.

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Jacques Mouiren



This strategy is a good mean to lead very located actions. It is not very widely used as the

set up is a bit complex. Same as the two previous strategies, it is tough to track the efficiency

and success of such actions. From all the players which were asked the question, none of them

has ever used it. For manufacturers it is definitely a good way to promote their brands,

especially through a MMS on which they can add a logo, image or video. Therefore the

highest grade has been applied to the strategy “Brand Awareness”. The other criteria have

been graded 2 “likely to be low”. The criterion “Capacity for the strategy to be independently

developed” is fairly high as a brand manufacturer can use the list of its authorized retailers to

push in-store traffic in these POS.

d) The e-couponing

This technique consists in giving the opportunity to a web-user to benefit from a coupon

that he can either print of download on his smart device. By presenting this voucher in a

physical store, he will benefit from a discount of % or a special offer. The big challenge here

is to actually promote these e-coupons. How to make them e-visible? How to reach web-users

and generate qualified in-store traffic 8, 9. There are 3 main answers to this challenge:

- Massive e-mailing

- Banners (display, CPM, Real Time bidding, Retargeting…)

- Social Networks (Facebook, Pinterest...)

The internet-couponing for brands or retailers can also be lead through:

- Grouponing-platforms: it offers specials discounts by being unique-city-focused. The

deal is limited in time and requires X number of purchasers in order to be valid and

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Jacques Mouiren


definitive. The voucher is then sent through email. The most famous companies are

Groupon / Citydeal. 10

- Couponing platforms: is usually a website where a plethora of deals / discounts /

coupons can be found.

- The Mobile-couponing


� Is the best way to capture out-store traffic in order to bring it in-store

� Generate Trial / attracting new customers

� Generate Brand awareness

� Is easy to measure

� Is easy to use

� Can generate significant data for a CRM strategy


� Has to be promoted efficiently to be efficient (Extra Cost for the e-campaigns, Paid

Search, CPM, E-mailing…)

� Can lead to a loss of credibility

� Can be difficult for Brands & retailers to get back to their original pricing


This strategy is very well known as Coupons in general have been largely used in the

retailing industry on FMCG products. However, using coupons on larger products is not

commonly used as the markups in the appliance / electronic industry for instance are not very

high. This strategy can only be rewarding if the distribution of the e-coupon is well

established. Assuming that the distribution is done properly, the impact on the business

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Jacques Mouiren


growth in terms of bringing new customers as well as locking up the existing customers is

likely to be fairly high (grade 4). A well established e-couponing action is likely to be easily

trackable. We are talking about KPIs such as number of downloaded coupons, numbers of

redeemed coupons. The e-coupons can be an excellent way to promote a brand as most of the

time a coupon will be featured along with a message or a logo.

e) FSIs / Circular

The Free Standing Inserts (FSI), Circular or now more commonly called “Digital

Flyers” is a technique used by companies to advertize on the same basis as for the coupon.

The circular is usually bigger (A4 format). This model was widely used in the physical world.

The Circulars were being attached or implemented in Magazines or News Paper. The

customers do not have to bring the circular in-store to benefit from the discounts or deals. The

flyer is more about passing a message along to the web-users. “Benefit from X% off at…

from …To …” The only difference with a regular display is that the Banner or advertising

page is supposed to be nice looking, with relevant images featured to actually catch the

readers’ eyes. We could say that it is in between the basic banner ad and info graphic.

Example of an Old Navy e-circular in Quebec Canada (APP 6)

Jacques Mouiren



� Is a relevant way to do brand awareness

� Enables to capture new client

Quite inexpensive compared to “regular advertising”. To give a comparison a CPM (Cost per

thousands impressions) on TV is about $30, Bill

thousand impressions) 11


� The content has to be efficient to attract customers, otherwise, loss of credibility



way to do brand awareness

Enables to capture new client


thousands impressions) on TV is about $30, Bill-board is around $6, Internet averages $2 per

on the company’s side:

The content has to be efficient to attract customers, otherwise, loss of credibility

19



board is around $6, Internet averages $2 per

The content has to be efficient to attract customers, otherwise, loss of credibility

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Jacques Mouiren


� The circular / e-flyers are usually featuring limited-in-time offers; there is a risk of not

reaching the target on-time. Time management is extremely important.

� To have a relevant impact, the distributions of impressions have to be quite massive

� Geographical management can be a problem. Campaign for all the stores for one

country? Or aiming one city only?


The strategy of issuing circular is quite interesting but has to be done on a large scale.

Start-up companies such as Wishabi 15 have been tacking this advertising segment and are

doing quite well as they have been adding an extra value where there are possibilities for the

web user to click on the circular and then be redirected to a website to either make the final

purchase or check the products. This is to say that this kind of strategy of carrying e-circular

is fairly relevant if established online only. Trying to set this up for a Player 3, therefore

attempting to drive traffic to its physical stores would mean too many steps and the

probability for the web user to get lost. However, this is definitely a good mean to improve

brand awareness by pushing a large content with photos / messages / logo…etc. Just like for

any mass advertising mean, this is hardly customizable and tough to track. Most of the time,

the performance is calculated on a CPM (Cost per thousand) basis.

f) The Shopping apps

These shopping apps are very famous and can be found in several ways. Some actually

gives the opportunity to buy online, or locate a product / store in the area. Some are a tool

which accompanies the user in his / her shopping experience. One of the most relevant and

successful Smartphone App has been created by Tesco in South Korea. The concept is quite

simple. See exhibits here below. 16

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Jacques Mouiren


Tesco QR codes: A 5-step approach (APP 7)


� The shopping app is trendy. It is recommended for brands to have one.

� When it is efficiently built, it can have very positive impacts in terms of traffic online

+ in-store.

� It enables brands or retailers to feature the app as part of their global social strategy. In

some case, the app is the “social network hub” enabling users to connect / post /

comment through the other social networks (Facebook, Twitter, Pinterest…etc).


� Most of the time, the app gets lost in the app stores (Android + Apple)

� It is extremely costly to promote an app globally

� Can face significant technical issues and lead to a loss of credibility


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Jacques Mouiren


Shopping list apps are relevant means to bring traffic to either a website or products

in-store. It shows that the concerned company is walking the talk by being creative and by

tackling the M-commerce (Mobile commerce) segment. Speaking of “in-store traffic”, it can

be very challenging for an App to be efficient. First of all, marketing teams must massively

advertise the fact that they have an App, then there is quite a challenge on “how not to get lost

on the Web stores” (Android App Store + Apple App Store). For these reasons, many criteria

in the matrix have been graded with 2 “likely to be very low”. The main strength aspects to

highlight with this strategy are the Brand Awareness as well as the facility to track actions

since the web users come on the App (possibility to collect Cookies with data such as

Purchase, Page Views, Web Path…etc.) 17

g) The Social2store

The Social2store strategy is one of the latest concepts, which consists in equipping

physical stores with devices (digital mirrors, Ipad and other in-house devices) so that users

can get connected to social networks within those stores. For instance, a person will be able to

try a jacket on, then get connected to Facebook and post a picture + some comments about the

products (for instance “Hi, should I get this Jacket?” His social friends will comment the

product, talk about it and give a feedback. This strategy consists in erasing the line in between

online and offline by creating synergies on both channels. 18


� Shows a strong innovation, increase credibility

� Increase the user’s engagement in the brand

� Enable to access relevant data about the users, improve the CRM database with highly

qualified data

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Jacques Mouiren



� Financial investment is massive

� Staff needs to be trained to meet the new type of requests


This strategy is only dedicated to large brands willing to invest a lot of money in what

has been commonly called “Concept Stores”. Grades for players 3 in the matrix are 2 “likely

to be very low” as most likely they will never set up such stores as they don’t own their

stores. This mean of attracting customers is mainly used by Players 2 such as Adidas or Nike

for instance.

h) The Web2store personalized emailing

This emailing strategy is already quite well know and has the reputation to be

efficient. The CTR (Click through Rate) is averagely as good as or even better than other e-

marketing means to pass a message along. Experts say that 12 a realistic CR (conversion rate)

should be in between 1% and 3%.

For instance:

A company sends 10 000 emails. Out of these, 3 000 users actually open the email (opening

rates is therefore 30%).

3 000 persons open the email and 1 000 are going to click on the product / service link the

company has been promoting. The CTR is 1 000 / 10 000 = 10%

Out of those 1 000 people, 200 will actually convert (it can be purchase or fill in some

information, or downloading a coupon…), this is to say that the CR is 200 / 10 000 = 2%

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(APP 9) An IBM study about S&SWorlswide a distributor of Craft, Art and Sport goods

shows that the email yield, that is to say, the conversion rate related to e-mail can be increased

by more than 30% if the email is personalized. Personalization means two main things:

1) The email outbox (the sender) is not noreply@S&SWorlswide.com but rather

Jenny@S&SWorlswide.com

2) The email is personalized and talk about shared experience with the customer

(customized Object; customized content + link to past purchase + real name signature)


� Enable to remain close to the customers

� Significant ROI

� Easy to set up


� Has to be set up along a relevant CRM strategy otherwise ineffective

� Depending on the kind of conversion expected, not necessarily easy to measure (for

instance (come and check out our new store at the address…)

� Spam


This strategy has been proven efficient. The only main challenge is that in order to prove

results the concerned player must have a large email database which is not quite easy to get.

Of course, it is always possible to get a large amount of emails from a big data partner but the

entire beauty of the email is the ability to present highly customized content. On the one hand,

this is very possible for large retailers using loyalty programmes as they have access to highly

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Jacques Mouiren


qualified data on each of their customers detaining a loyalty card. However, on the other

hand, for players 3 the challenge is completely not the same as they don’t have the same

scope. Their business is for a large part of it B2B, which kind of switches the priorities. This

strategy is therefore completely efficient if the Player 3 finds a mean to get high qualified

CRM data.

i) Reward programme

This strategy is mainly used to win the loyalty of existing. It is therefore not a new-

customer gaining approach. Most of the times, a “loyal” has a card or logins he can use to get

extra discount or rewarding points that he will exchange against gifts or money. It is a

relevant model has it is very well know and according to a 2011 Epsos Study, 85% of the

western European have owned at least one loyalty card.

Canadian most popular rewarding programme card: 80% of Canadian owns a card (App 6)


� Enable to track all past transactions of the users

� Gives the highest qualified data about customers

� Improves the customers relationship


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Jacques Mouiren


� Complex to set up if not through a 3rd party

� Risk of being lost among all other rewarding programmes

� Reduction of profit for the company


Reward programmes are massively used by Players 1, the retailers as they are the

one dealing with the largest number of customers. This mean is very strong at satisfying

customers by pushing them current deals and promotions. It is also the most efficient strategy

to gather qualified CRM data. Thanks to these loyalty programmes, retailers can gather direct

information on the customers (email, age, consumer behaviors…) and can then retarget these

same customers with customized content. In regards to players 3, the set up of a loyalty

programme is possible but not very common as the programme has to be focused not on retail

point of sales but rather on products alone. It is not as simple as swiping card in a store, the

programme would have to allow the user to get some benefits when they buy this or that

product from such or such brand manufacturers. The challenge of setting things up

(partnership with retailers for instance) is very hard and money consuming. However this is

still a very relevant technique to gather qualified data for retargeting. The actions

measurement is way more challenging than for retailers as there are more steps to go through:

Setting up a programme, setting up loyalty partners, gathering the results of each retailers and

then measure. 19

j) The in-store cash back

This technique which is not widely used yet consists for a company to give cash back

to its customers after the purchase. Usually set up on the internet, this technique is now going

in-store. The specialist is the UK Company Quidco: 13

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Jacques Mouiren


In-store Cash Back Quidco: how it works? (App 9)

A list of physical partners is therefore available on the website of the cash backer (here

Quidco) which redirects the traffic in-store and get a commission out of every transaction.


� Is able to boost its in-store traffic

� Quite easy to set up on the brands or retailers’ side

� Easy to measure in terms of business impact

� Significant possibility of gathering qualified data (if a registration is required)

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Jacques Mouiren



� Can be costly if the % commission has not been well negotiated

� Can be difficult to define if the company should pay for a returning customer or just

for the first time in-store


The physical In-store Cash Back technique is quite relevant for the Brand

manufacturers as first of all they could they care of the commission charges ($) instead of the

retailers. The set up would be a bit challenging but the hardest part would be to find the right

partners carrying this type of methods 20. For instance, Toshiba could set up cash back actions

with Crutchfield (one the largest US electronics retailers). These retailers already have the

scanning system in place; it would just be a matter of adjusting it. The In-store traffic

boosting towards products is fairly high for this type of Cash back actions. If the

establishment of the technique is relevantly done, there are high chances of being able to get

qualified data which can be used for retargeting or other purposes. Just like for e-coupons, the

communication about this type of promotional event could have a double impact: pushing

customers to the products and improving the brand awareness.

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Jacques Mouiren


C) Assessment Matrix and results

The Matrix which was created has been used to assess each strategy for each player

per criterion.

Based on the criteria here below, each Player [P1: The retailers (Brick & Click), P2: The

Brands (Brick, Clicks & flips –catalog) and P3: The Brands (mainly called Manufacturers)

with no owned retail points] have been assessed with grades going from 1 to 5

The grading system is the following:

Grade Signification

1 Likely to be very low

2 Likely to be low

3 Likely to be average

4 Likely to be high

5 Likely to be very high

Used criteria:

� Capacity to boost in-store traffic (coefficient: 30% of total grade)

� Ability to gain new customers (coefficient: 20% of total grade)

� Ability to gather qualified data for CRM (coefficient: 15% of total grade)

� Facility to measure or track the actions (coefficient: 10% of total grade)

� Facility of implementation (complexity, costs…) (coefficient: 10% of total grade)

� Ability to gain in Loyalty (coefficient: 5% of total grade)

� Capacity to improve brand awareness (coefficient: 5% of total grade)

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Jacques Mouiren


� Capacity for the strategy to be independently developed (coefficient: 5% of total

grade)

Importance coefficients have been applied to each criterion in order to reflect as much as

possible the reality for the study (see here above) aimed at identifying the best strategies to

push physical traffic to products manufactured by Brands which do not control their

distribution channels.

Results of the assessment and identification of the best web2stores / web2products strategy

for the players 3:

According to the grades and the coefficient which have been given to P3 in the matrix for

every of the 8 criteria, the web2products strategy which has been retained for the further

assessment is:

� The E-couponing strategy (which reached the highest score of 3.75 out of 5)

Some other strategies reached decent scores such as In-store Cash Back, Click & Collect, FSI

/ Circulars and Personalized with scores ranging from 3.1 to 3.3 out of 5.

Strategy Final Grade (out of 5)

Click & collect 3,1 Product Locator / Store finder 2,6 Geolocated SMS / MMS 2,2 E-Couponing 3,75 FSIs / Circular 3,1 Shopping list apps 2,3 Social2store 2,05 Personalized emailing 3,1 Reward programme 2,6 In-store cash back 3,3

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Jacques Mouiren


II) The best strategy which applies to Manufacturers which do not

control their retailing channels and further assessments of

feasibility?

For this retained strategies, we will present here how such strategy could be applied to the

Players 3 including the details on the following criteria / challenge

• The Financial challenge (how costly is it to implement such or such strategy)

• The CRM challenge (how hard is it to control the collected data + how qualified is this

data, would it be relevant to reuse it in future actions.

• The Control challenge (how can manufacturers control the impact of pushing physical

traffic to retailers?)

• The other main specific challenges (miscellaneous) …

This retained strategy, perceived as the most beneficial for the players 3 will be used for the

final recommendation for the company - ShopBot Group.

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Jacques Mouiren


A) Retained Strategy: The E-coupon strategy

On April 30th 2013, a study issued by E-business / E-marketers revealed that the US

shoppers are exponentially using digital coupons 21. Forecasts for 2014 say that 100M

American will be using digital coupon. This growth is very exponential due to the rise of

Mobile commerce “M-commerce”. US users consider that saving money through an app is the

most important component. In second comes the ability for an app to locate stores.

Given the results of this study, a platform which will enable to push money savers deals +

enable to locate the deals in-store, is very likely to be suitable to the market expectation.

Survey results for Couponing Apps in the US (APP 12):

a) Context of how this strategy could be applied to players 3 – The brands Manufacturers

By selecting this strategy, the purpose is that a brand manufacturer issues e-coupons in order

to push physical traffic to its products in stores that it doesn’t own.

Explicative chart – The e-coupon strategy for P3 (APP 13)

Jacques Mouiren


We will assume that t

manufacturers issuing coupons to push traffic to their products in FMCG stores (Walmart,

Carrefour, Tesco for instance).

idea itself but rather in the set up of it.

A few challenges need to be addressed:

1) What kind of e-coupons should be issued? Bar code coupons? Digitalized redeemable

e-coupons? How to push unique e

2) How to be efficient and cost

3) The other challenges (Financial, C


We will assume that the concept would be used on the same model as Food


Carrefour, Tesco for instance). Therefore, the big challenge here doesn’t lie in the concept

but rather in the set up of it.

challenges need to be addressed:

coupons should be issued? Bar code coupons? Digitalized redeemable

How to push unique e-coupons, so it does not spread all over the internet?

to be efficient and cost-efficient in pushing the e-coupons to the targeted users?

The other challenges (Financial, Control, CRM, Risk…)

33


he concept would be used on the same model as Food


he big challenge here doesn’t lie in the concept

coupons should be issued? Bar code coupons? Digitalized redeemable

coupons, so it does not spread all over the internet?

coupons to the targeted users?

Jacques Mouiren


B) - The different aspects to be tackled

a. The miscellaneous aspects project

Phase 1 –What kind of e-coupons

P3 will most likely issue coupons on high value products, therefore, the turnkey solution will

have to present a solution to fight against massive couponing.

qualified customers by gathering as much data on this user as possible.

� Possible solution: Push e

in. Here, basic data could be collected (name, address + zip code, @, etc).

data collected, users will be granted with

only “one time”. Or find a solution to personalize the experience so that masse

redemption is not doable.

� To generate unique coded, the company would have to use a solution such as:

o http://www.securecouponco

� In terms of issuing, the e

on the standard internet but also on Mobile devices. A relevant recommendation

would be to create designs which could be issued as “display advertising”

banners or top-of-site banner)

Example of a top-of-site banner online


The different aspects to be tackled

miscellaneous aspects project-related

coupons:


have to present a solution to fight against massive couponing. The goal is to target new

qualified customers by gathering as much data on this user as possible.

Possible solution: Push e-coupons on which people would have to click in order to log

in. Here, basic data could be collected (name, address + zip code, @, etc).

data collected, users will be granted with a unique code. This code would

. Or find a solution to personalize the experience so that masse

redemption is not doable.

To generate unique coded, the company would have to use a solution such as:

http://www.securecouponcodes.com/

In terms of issuing, the e-coupon must have a relevant format which could be issued


would be to create designs which could be issued as “display advertising”

site banner)

site banner online – Chefmix (APP 14)

34



The goal is to target new

coupons on which people would have to click in order to log

in. Here, basic data could be collected (name, address + zip code, @, etc). Once the

a unique code. This code would be usable

. Or find a solution to personalize the experience so that masse

To generate unique coded, the company would have to use a solution such as:

coupon must have a relevant format which could be issued


would be to create designs which could be issued as “display advertising” (like side

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Jacques Mouiren


� The content on the coupon must be relevant and well established in order not to

endanger the brand credibility (in terms of price strategy). The coupon must

redeemable on a limited time period. It must also feature where to be used

� The digital must be easily redeemable, this is to say that they would either have the

normal redemption model (Bar codes) or another technique might be used if this is

considered easier for the users.

Interesting Note: At the end of 2012, Google acquired a company called Zavers, a smart,

simple real-time digital coupon solution 22.

Short description from the website: “Zavers by Google is a fast and easy way to offer the right

coupons to the right shoppers, expand rewards programs, and track redemption in real-time.

Shoppers find the manufacturer discounts on their favorite retailer websites and add the digital

coupons to their online cards. Savings are automatically deducted at checkout when shoppers

swipe their rewards card or type in their phone numbers - no scanning or sorting necessary.”

Using such solutions would allow removing actions such as tracking and reporting.

Phase 2 – How to set this up (headlines):

There are two ends to be careful about when setting up such strategies:

A) The Manufacturers’ side

B) The Retailers’ side

What has to be done on the Manufacturer’s side?

1) Review the inventory / sales of products per region or zone in order to choose properly

what products needs to be promoted and how many of these.

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Jacques Mouiren


2) Decide what kind of promotion the manufacturer wants to run: % off? Buy 1 get X

free? Other?

3) Decide where to run the promotion. Only one big city? One region? National

coverage?

4) Draft the promotion and digitalize them through e-coupons featuring the essential

information as seen above (when? Where? How?)

5) Get in touch with targeted retailers carrying these products and set up the initial deal

6) Spread the targeted e-coupons on the Internet through computers / Mobiles devices

7) Control & Assess through reporting files issued by retailers

What has to done on the retailers’ side?

1) Set up the deal with brand manufacturers by defining which specific products the

coupon will be targeting.

2) Assess the feasibility of such deals (in terms of stock, availability)

3) Report to the Brand manufacturers > How many coupons were redeemed; Invoicing

process.

Phase 3 – How to ensure the maximum visibility of these e-coupons?

Once the deals finalized between P3 and P1, the most important questions is “How

can P3 make these e-coupons visible on the web?”

The big leaders of the industry such as Coupons.com as well as Retail Me Not for

instance are very strong in terms of SEO (Search Engine Optimization) 23, which means that

people find their website by browsing with key words such as “Get Coupons Tigerdirect”.

This strategy could rather be called “Pull” as the user is being pulled to the website where he

will then look for the proper deal. Of course, having a relevant website and a strong SEO

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Jacques Mouiren


strategy is very important but with the fierce strategy on the internet this is no more enough.

Companies willing to increase their market shares have to go get the customers instead of

letting him show up on their website. We are talking here about “Deal Pushing” strategy

which means that a company will be pushing deals to whoever it thinks its targets are.

An article in Forbes entitled “7 tips for effective digital coupon marketing” 24 reveals that one

essential components in being successful is to define accurate targets to increase the chance of

having a strong Return On Investment (ROI).

Defining a target means knowing the data. Company will have to look for data such

as:

- Where does my target live?

- What kind of deals / products is my target mainly looking for?

- What’s the demographic of my target (Gender, Age…)

To do so, the brand manufacturer has to use a big data provider which will reveal this kind of

information. A big data partner is a company such as ComScore, Equifax and Nielsen (Slide

Publisher / Provider Gamned)

The internet navigation cookies provided by those partners can then be used to target or

retarget the web users. Most likely the brands manufacturers will have to use 3rd parties to

deal with this aspect of the business as this is a complex and involves many technical

platforms and several specialized partners. Turnkey solutions partners for such actions could

be:

- Criteo (Online display advertising specialist) 25

- Gamned (intelligent Data Advertising) 26

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These partners, on behalf of their clients will ensure that the right target is being spotted and

will ensure as well that the display is efficient and cost-efficient.

b) The financial aspect

The costs linked to such projects will all be considered “marketing” costs as they are linked to

the digital coupon strategy.

List of main costs:

Fixed costs: (for one project – example: Issuing one digital coupon in NYC for one week)

� Digital Coupon Designing Cost > Internal marketing costs, we will consider it to be

$0

� Accounts set up fee: (this is a onetime cost)

o Big data partner (between $1 000 and $1 500 depending on the partner)

o Possibly: Coupon redeem solution provider: $1 500 set up fee (for Zavers for

instance)

Variable costs:

� Costs linked to the coupon deal. For instance, 3% off on 2 000 products priced $100

each > Cost is $6 000

� Costs linked to the digital couponing issuing (on the internet + mobile devices) = cost

of the media buying + a 15%-mark up for the big data partner. For instance, if

Gamned buys 100 000 impressions on behalf of a brand manufacturer at a cost per

mille (CPM) of $5 (average US CPM), final cost for P3 will be: (100 000 / 100 *$5) *

1.15 (markup) = $5 750

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Jacques Mouiren


� Cost linked to the coupon redemption partner – Coupon Clearing House (Wikipedia:

“A clearing house is a financial institution that

provides clearing and settlement services for financial and commodities derivatives

and securities transactions” = $.15 per coupon (average fee for a coupon clearing

house) 27.The historical redemption is 2% therefore out of 100 000 impressions, 2 000

coupons will be redeemed. 2 000 x $.15 = $300

In such projects, it is essential to aim at the right targets to save on display impressions,

therefore on media buying. This type of marketing actions must be realized on niches. For

instance: Young males of 25-30 years old, living in Manhattan.

c) The Customer Relation Management & Data Control aspects

As tackled previously, in order to be efficient, marketing actions of this type must be much

targeted. This is to say that the media display impressions pushed to the web users must reach

people who have already showed an interest in the type of products being couponed.

There are three real ways to do so:

1) Using the data that P3 already owns. Most brand manufacturers -even though they do

not have any transactional website- own a quite qualified database of users

2) Using a retargeting option, the specialist here would be Criteo. By implementing tags

on the website of a brand manufacturer, some big data partners are able to track IPs of

people who came on the website. These people can be retargeted either with a special

line of products they had been focusing on or with a specific product.

3) Last option that could be used is to gather data which was collected through cookies

but not necessarily on the website of the concerned brand manufacturer. For instance,

a person who went on the website of Sennheiser, Skull Candy, Bose to look for a pair

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Jacques Mouiren


of headphones is likely to be interested by an ad featuring headphones from Grado (a

leading high quality brand in sound gears). Real Time Bidding enables to do so.

Whatever advertiser bids the more, on this or that specific web inventory gets the spot

for his feature / banner / coupon…etc.

Each of these ways must be dealt with in a very cautious way. For instance the Criteo

solution is reputed to be efficient in retargeting but the significant drawback is that this

partner considers the data to be his data once treated. He can then sell this data to some other

brands or partners.

Once the right user is spotted through his IP, the media partner will be able to push some

content. Here we are interested by pushing a digital coupon that people will be able to click

on. Once they are redirected, they have to sign up / create a quick account. This is the

important part: here is the moment when all the qualified data is being collected. This data is

owned by the P3, leading the action.

IMPORTANT: In order to be validated as owned, the web users must confirm their email

addresses. This enables to push some extra information as well as enable the users to qualify

this type of email to have a proper sender (no Spam, no Phishing).

d) The in-store traffic control aspect

Once P3 has managed to push physical traffic in the stores of his retailers, the last big

challenge is the control of the coupon redemption. We can find different ways for the

redemption depending on the coupon format.

1) If the format is paper: the coupons are gathered and sealed in a big bag which is then

sent to a coupon clearing house. The official instance counts how many coupons are in

the bag. Then it tells P3 the results. Finally P3 collects the data and pay the retailers

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Jacques Mouiren


for whatever amount was deducted of the concerned product * the number of

redeemed coupons.

2) If the format is digital (Bar code, QR code…etc): The coupons must be redeemable

using the POS System of the retailers. This is rather a quite significant challenge as the

POS even though they tend to harmonize, are not quite the same for every retailer. For

this type of actions, P3 must most likely make an exclusive deal with such or such

retailer. By doing so, P3 can make sure to have the right format, compatible with the

POS of the targeted retailer. The coupons collection is then the same process as for

option 1.

3) Last genuine option is to use a coupon app enabling to redeem the coupons

automatically, either using a phone number (like Zavers) or using a loyalty card.

As we can see, there are many ways to push digital coupons to the web users and also many

ways to redeem and control these actions. In the final part, we will try to highlight what kind

of turnkey solution ShopBot could set up in order to create opportunities on this very tight but

so growing market.

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Jacques Mouiren


III) Final recommendations

A) Contextualization of the project

I would like to remind that the Project here described has been achieved for the

ShopBot Group which has been recently acquired by the Makazi Group.

ShopBot Group: “Shopbot-Inc is an international group of high performance price

comparison websites. We have, since our inception, developed into a global leader on the

price comparison market, backed by the decades of experience of our founders. Our role is to

efficiently link customers and merchants in the rapidly expanding online retail market.

The Makazi Group is a corporation specialized in Data Marketing. Makazi offers to

publishers an approach reconciling short terms performance objectives as well as long term

value creation objectives highlighting the power of the data. Their 3 main axes of

development are:

1) Data consolidation

2) Smart treatment of data

3) Data activation

The group has acquired many start ups which comes to strengthen these main objectives.

Among them we can find:

- “Gamned”, a growing actor on Intelligent Data Advertising on ad exchanges.

- “Score MD”, a corporation specialized in the online behavior data scoring.

The following recommendations will therefore find support in the other assets also part of the

same Makazi Group. All acquisitions have been asked to provide as much help as possible to

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Jacques Mouiren


each other at a low costs so the Makazi general offer can become internationally global at a

fast pace.

B) Project recommendations:

Given the best strategy retained for the players 3 and given the risk assessment

achieved in Part II, what kind of tools or Turnkey Solution could a startup provide in order to

meet this high challenge being “How Brands Manufacturers can drive more traffic to their

products in stores that they do not own?”

The idea would be to create a platform which would be the intermediary between Brands

manufacturers and retailers so that Brands have a mean to push physical traffic, which has

been captured on the internet (computers / mobile devices).

This solution would integrate the digital coupons distribution & the processing of the coupons

(Clearing House) so P3 and P1 know exactly where there are standing in terms of transactions

/ billing…etc.

On the same basis as a grocery coupon like for instance Dove (Soap Manufacturer) and

Walmart, the idea would be to set up a turnkey solution between an electronic / appliances

manufacturer and retailers carrying such products like Best Buy, Future Shop, La Fnac,

Virgin Mega Store...etc.

The platform that we will call for instance “CoupForm” will be the link between these actors.

“CoupForm” will be dedicated both to:

1) On the one hand, enable the manufacturers to upload their coupons (APP 15: Gamned

general presentation – Slide 24) as well as target demographics (geography, genders,

age…etc)

Jacques Mouiren


2) On the other end, the platform

“In-store” actions related to the e

How does it work? – Coupform explanation Chart (APP 16)


On the other end, the platform will be used as a dashboard for retailers to report the

store” actions related to the e-coupon issuing.

Coupform explanation Chart (APP 16)

44


will be used as a dashboard for retailers to report the

Jacques Mouiren


C) EXAMPLE OF PROJECT

Let’s choose a brand like Bosch willing to push traffic to its

Sales.

1) Bosch accesses the platform and uploads an e

within the Grand Toronto Area (in authorized Bosch retailers only)”

Coupon design mock up for Bosch on Coupform (APP 19)

2) Bosch chooses where it wants to launch the campaign (

Only? Ontario + British Columbia...?)*

3) Bosch chooses what targets it wants to aim, tick the boxes per demographics (like Side

Scout > Do it Yourself RTB platform) + chooses the validity of

“...”) . P3 will be able on the platform to choose exactly who his targets are. Following

these choices, Data will be saved in a special dashboard so that the Marketing Data

partner (We will use Gamned since it is reputed efficient

- Makazi).

4) Coupform distributes the e

demographic choices, Gamned is able to spot exactly the right and expected targets

online.


EXAMPLE OF PROJECT

Let’s choose a brand like Bosch willing to push traffic to its products in retailers Point Of

Bosch accesses the platform and uploads an e-coupon “-5% on all Bosch products


Coupon design mock up for Bosch on Coupform (APP 19)

where it wants to launch the campaign (example for Canada:

Only? Ontario + British Columbia...?)*

Bosch chooses what targets it wants to aim, tick the boxes per demographics (like Side

Scout > Do it Yourself RTB platform) + chooses the validity of

. P3 will be able on the platform to choose exactly who his targets are. Following


partner (We will use Gamned since it is reputed efficient and is part of the same group

Coupform distributes the e-coupons through the Gamned technology.


45


products in retailers Point Of

5% on all Bosch products


example for Canada: Toronto

Bosch chooses what targets it wants to aim, tick the boxes per demographics (like Side

Scout > Do it Yourself RTB platform) + chooses the validity of the offer (from “...” to

. P3 will be able on the platform to choose exactly who his targets are. Following


and is part of the same group

coupons through the Gamned technology. Thanks to the


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Jacques Mouiren


5) Web Users are targeted and download the digital coupons by signing in on Coupform.

a. Coupform will use the same type of technology as Zavers so users can save

their digital coupons on a cloud-based secured space linked to their phone

numbers.

b. Short corporate description of “Zavers”: Zavers is a digital coupon service

solution designed for retailers and manufacturers. It focuses on 2 aspects of

coupon promotion: creating and distributing digital coupons and making the

coupon redemption process more efficient. Utilizing real time data, Zavers

aims to allow manufacturers and retailers alike to customize their promotion

campaigns by providing analytics on shopper preferences and measuring

coupon redemptions.

6) Web Users go in one of the retailers carrying the deal (Lowe’s for instance), buy a

$100 Bosch Chain Saw > Finally pays $95

7) At the end of each month, Coupform automatically generates the invoices on behalf of

Lowe’s and sends it to Bosch. If 1 000 people came in-store and redeemed such e-

coupons, total transactions amount is 1000 x AOV (ex: $100) = 100 000; Bosch must

pay > $5 000 to Lowe’s (coupon deals > 5% of 100 000) – All transaction would be

visible on the Coupform platform / dashboard.

8) Bosch must pay for the media buying + a 15% mark up (Coupform’s commission).

This cost is variable depending on the e-campaign reach and number of display

impressions pushed by Gamned. For instance, if Gamned buys 100 000 impressions

on behalf of a brand manufacturer at a cost per mille (CPM) of $5 (average US CPM),

final cost for P3 will be: (100 000 / 100 *$5) * 1.15 (markup) = $5 750.

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Jacques Mouiren


Further detail and explanation:

Coupform staff will have to prospect and develop the retailer side of the business

a) Where can we find Bosch products in such or such area (ideas > Use the list of

authorized distributors very often available on the website (Bosch.com for instance)

per Zip code.

b) How can the Coupform redemption system be embedded in these large retailers POS

System?

a. Coupform will have to work along with the retailers to generate unique bar

codes fitted for each retailer POS system.

b. By tackling only the electronic and appliances sectors, the list of large retailers

will not be too significant. We may choose 10 large retailers per country. For

instance if the pilot project is to be in Canada, to start we will choose:

i. Best Buy

ii. Future Shop

iii. The Source

iv. Lowe’s

v. The Home depot

vi. Staples

The set up of this project implies several questions and steps.

a) Coupform would have to make test phases with the largest retailers first and then

could possibly move forward with smaller retailers.

a. For Canada for instance, start with Lowe’s or Home depot or Walmart or Best

Buy or Future Shop… as seen above.

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Jacques Mouiren


b. Check the feasibility of such projects on the retail side.

c. Check what brands they are carrying and then get the brands manufacturer

(Bosch for instance)

Advantage for the Brands – P3:

1) Push traffic to their products in-store

2) Promote their products on a cross channel model

3) Gain in Brand awareness as they are pushing e-coupons on a display basis

4) Gain in qualified data and use it to do retargeting actions

5) Understand the behavior habits of the web users

Advantages Retailers:

1) Get new customers at no cost.

2) Don’t bare the promotion / discount costs

3) Develop the in-store traffic

4) Benefit from an easy-to-use system in terms of coupon redemption.

*Project could be set up first in a main city and be expanded step by state to other Cities /

Provinces / States / Countries.

Main Risks / Barriers for CoupForm:

� How to find a way to process efficiently the coupon (Barcode?) and how to report the

transaction on the CoupForm Dashboard? (We could think about unique codes to be

entered in the POS system so that coupons can be used only once and not be spread all

over the internet / deal platforms.

� The negotiation is double and tough: 1) the brands 2) The retailers

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� Technical Barriers

Alternative solution of building the Revenue model:

In regards to the digital couponing distribution, Coupform could be seen as “e-coupon

vehicle”.

The delivery KPIs could be based on:

1) No CPM (cost per mille)

2) But Number of Click Through

3) + Number of downloads of the coupons

I am taking the risk, but as a RTB expert I know what to expect on these campaigns. The

combination of cost per clicks and cost per download would have to be structured in a smart

way so the offer remains attractive for the brand.

How much is a click worse?

- Depending on the market and on the advertised products (Electronics? Fashion? Etc.)

a click has a different value. On the US market, a click to advertise an electronic

product, should it be on comparison shopping engines or on Google Ad Words, we are

looking at an average Cost per Click of $.55. For fashion products we are looking at

$.40 per click.

- In Canada for instance, since the market is not as mature as in the US, a CPC for

electronics has an average of $.35 which is $.20 less than in the US.

How much is coupon download worse?

The model cost per download, since it requires more actions from a web user, is much more

valuable. Average cost per download is valuated as 4 times the average cost per click (CPC),

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therefore for the industries that Coupform will be tackling (electronics and appliances), we

will be looking at around $2 per download.

Most likely the solution here would be to create a model based on the value of the coupon.

The smaller the value is, the more the campaign can be considered as “Brand Awareness”,

click through is likely to be low as well as coupons download therefore it should be expensive

(and Vice versa if the value of the coupon as currency is high)

Ex1: Get $1 off on all Sharp Plasma TVs in authorized retailers shops = Cost of the CT +

download is high (cost per lead), let’s say 20$

EX2: Get $200 off all Sharp Plasma TVs in authorized retailers shops = Cost of the CT +

download is low (cost per lead), let’s say $1

A matrix model could be created to generate the value of the lead compared to the value of

the coupon as a currency.

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Conclusion

On the fiercely competitive digital deals market, there are many ways to tackle the

challenge of getting new in-store traffic from internet-led actions.

The industry segment (electronics / appliances) that was chosen here is a quite complex as it

aims at pushing traffic to products manufactured by Brands which do not own their stores, a

model which is quite famous in the FMCG market with actors such as Mars, Unilever for

instance on the one hand; and large food retailers on the other hand.

This study showed that out of the 10 main Web-to-store strategies, the “e-coupon also called

“digital couponing” strategy seems to be the best fit for Electronic and Appliances brand

manufacturers. Indeed this e-coupon to store strategy seems to be the most relevant way to

proceed as it enables P3 (Brand Manufacturers) to push coupons providing deals on the online

scene while promoting the Brand at the same time.

The built solution in this document doesn’t only show how to set up a simple online coupon

that would be dropped on a coupon site such as RetailMeNot but rather goes much further by

showing that the real challenge lies in the coupon distribution / issuing. Coupform, The

turnkey solution provided here is definitely one of the right ways to proceed. Coupform can

benefit from significant knowledge and tools already present in the Makazi Group –

especially Gamned- to push the e-coupons in a proper and targeted way as well as measure &

control the actions to increase the performance of such campaigns.

The results of such a study actually show the importance of the marketing data. The today’s

challenge is no more to provide a good deal online but really to push a good deal to relevant

targets / users who are going to convert into sales and therefore generate a highly satisfying

ROI for the ran campaigns. Of course, the technical set up in between retailers (P1), Brand

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manufacturers (P3) and Coupform (the turnkey solution) is very important as the end of the

day what really matters is the simplicity of the project and the satisfaction of the web users

and final buyers.

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Bibliography:

Websites:

Realbeauty.com

Emarketing.fr

sharp.ca

Wishabi.com

Quidco.com

Retailmenot.com

Ropo.fr

Loyalty.com

Finance.yahoo.com

Zavers.com

Criteo.com

Gamned.com

References:

REF 1: http://www.engadget.com/2012/09/07/best-buy-starts-taking-2012-amazon-kindle-

pre-orders/

REF 2: http://www.realbeauty.com/products/hairstyles-makeup/beauty-bar-opens-

manhasset

REF 3: http://www.forbes.com/sites/gilpress/2013/02/27/google-says-no-to-retail-stores-

how-about-community-centers/

REF 4: http://www.e-marketing.fr/Breves/-Un-client-multicanal-realise-un-chiffre-d-affaires-

six-fois-superieur-a-un-client-monocanal-web-46166.htm

REF 5: www.sharp.ca

REF 6: http://www.retail-week.com/multichannel/highs-and-lows-of-click-and-

collect/5037714.article

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REF 7: http://businessaffinites.olympe.in/html/click_collect_nouveaux_modes_achat.html

REF 8: http://emarketingfreak.com/coupon-marketing-sales-promotion-strategies/

REF 9: http://fr.slideshare.net/wdmcentral/e-couponing-presentation

REF 10: http://en.ecommercewiki.info/fundamentals/couponing

REF 11: http://www.wishabi.com/

REF 12: http://www.hostway.com/web-resources/online-marketing/email-marketing/email-

marketing-whats-a-good-conversion-rate/

REF 13: http://www.quidco.com/how-it-works/

REF 14: http://www.lg-com.fr/mobile-solutions/sms-geolocalise.html

REF 15: www.wishabi.com

REF 16: http://www.appbrain.com/apps/country-canada/shopping/

REF 17: http://www.businessinsider.com/apps-that-will-change-the-way-you-shop-2013-

6?op=1

REF 18: http://www.ropo.fr/2013/04/tagby-social2store-web2store.html

REF 19: http://loyalty.com/

REF 20: http://finance.yahoo.com/blogs/the-exchange/cash-back-rewards-good-deals-

consumers-185036959.html

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REF 21: http://www.emarketer.com/Article/Digital-Coupons-Mobile-Give-Cheapskates-

Staying-Power/1009847

REF 22 : www.zavers.com

REF 23 : http://www.ebizmba.com/articles/coupon-websites

REF 24: http://www.forbes.com/sites/drewhendricks/2013/09/23/7-tips-for-effective-

digital-coupon-marketing/2/

REF 25: www.criteo.com

REF 26: www.gamned.com

REF 27: How to Sell More Stuff! Promotional Marketing That Really Works By Steve Smith,

Don E. Schultz

REF 28: http://www.shopbot-inc.com/group/en/group/presentation.html