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Omni-channel Retail: Fashioning a New Economics
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Omni-channel Retail: Fashioning a New Economics

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  • 1. Omni-channel Retail: Fashioning a New Economics Michael Ross, Co-Founder & Chief Scientist, eCommera
  • 2. Kiosk Mobile app PC/browser Tablet Product Customer Assisted sale Store Distribution centre Drop ship Store Anywhere Home
  • 3. ROPO to BIMBO  Do you give credit to online for an offline- influenced sale?  Stop online marketing that isn’t justified by online value - but is justified by overall business impact Potential issues Research online, purchase offline  Do stores get penalised for online returns?  Encourages antagonism between channel teams Buy Online, Return to Store  Is this an online or offline sale?  Store sales/profitability decreases but store is clearly critical part of journey Browse In-store on Mobile, Buy Online  Cost for store OR cheap way to drive footfall?  Underinvestment in click and collect experience Buy and collect  Are high value offline customers being targeted with online offers/discounts?  Easy to send online offers to what appears to be a “lapsed” online customer rather than focussing on them as an offline customer High value offline, lapsed online Retailer question
  • 4. Product
  • 5. Product: before and after Range Inventory Trading  Propositions evolved , constrained by store size  Own brand to drive margin  Sales rate per SKU and SKU densities per sq. ft.  Constrained by brand  Unique product critical  Long tail products To  Managed by store  Stock in store owned  A single view of inventory  New stock ownership and fulfilment models  Broadcast prices  Low variable cost of sale  Simple trading  Fixed discount schedule for sales  More dynamic prices  Revenue management  Product “next best action” From
  • 6. Product economics
  • 7. Customer
  • 8. Customer: before and after Management Marketing Selling  Customers anonymous - insight from gut experience or research  Customers not measured - like-for- likes are good enough proxies  Single view of customers  Customer centric planning  Customer-centric input metrics To  Customers not part of the conversation  Fixed rent = footfall  Fixed costs of store staff  Broadcast  Segment-driven for insight and action  Focus on most profitable customers  Variable costs  “Next best action”  Personalised (segment for execution, not insight)  Channel targets: both store and online  Transaction focussed  Customers are anonymous  Service is uniform  Customer targets  Lifetime value/relationship focussed  Service is differentiated  Store staff are informed and incentivised From
  • 9. Customer economics Expected 3 year purchases
  • 10. Order
  • 11. Order: before and after Ownership Timeline Cost  Simple  Store staff incentivised/focussed on closing sales in store.  Complex  Transactions can touch many parts of the business. To  Immediate: transactions initiated/completed in store  Delayed: separation of order from delivery  Longer gestation – interaction with all channels (particularly for high value purchases)  Low marginal cost – shopping bag, credit card charge  High cost to serve – home delivery, returns handling, email/phone customer service From
  • 12. Order economics Service request pattern Staffing pattern (8am-9pm) Waiting times
  • 13. Michael Ross Co-Founder and Chief Scientist, eCommera michael@ecommera.co.uk

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