2010.10.26 (14:59) e-commerce = 449 billion EURO World e-retail spend 2009 = 485,4 billion EUR
Changing of communication habitsDO YOU KNOWYOUR CUSTOMERSCOMMUNICATIONHABITS ?
CEE EU-countries market size (inhabitants) COUNTRY POPULATIONAn average of 60-75% of thepopulation is living in urban Bulgaria 7’700’000areas - except Romania, where Czech Republic 10’200’000the partition lies by 50% Hungary 10’000’000 Poland 38’200’000 Romania 21’700’000 Slovakia 5’400’000 Slovenia 1’990’000 TOTAL 95’190’000 source: Study from PriceWaterHouseCooper, 2008
2009 - Internet penetration and users in CEE Internet penetration Internet penetration (average) reached the EU average in most of the CEE countries. Penetration is above 80% in the TOP 20 cities (60% of inhabitants) Internet users Internet users vary between 10 – 40 million inhabitants on country Increase of internet users is accelerating – average increase is about 30% Source: Gemius, CEE internet 2010
2009 – Internet broadband penetration CEEBroadband penetrationThere is still a difference in broadband penetration among the Europeancountries- 37% (average) Western Europe- 11% (average) CEE Source: Gemius, CEE internet, 2010
Changing of communication habits the real problem Booming of social media -> Facebook, Twitter, YouTube, LinkedIn, Xing Traditional letter mail is no longer sexy for the young generation How to remain attractive ?
Changing of purchase habitsDO YOU KNOWYOUR CUSTOMERSPURCHASEHABITS ?
Multi-taskers – change of buyers habitsMulti-taskers: those who use / access the Internet whilst also watching TV , listening to music, speaking on phone TOP multi-taskers 77% Denmark and UK 73% Germany 71% Belgium Source: Media Meshing: Meet Europe’s media multi-taskers, 2010
What are multi-taskers doing ? 34% of Internet users are searching a product with purchasing intentionSource: Media Meshing: Meet Europe’s media multi-taskers, 2010
Where are the purchases realized ? Purchase-driving effect of a TV and internet/mobile Ads. Two in three say that Internet ads have driven them to make an on-line purchaseSource: Media Meshing: Meet Europe’s media multi-taskers, 2010
Be consumer centric (but how ?) The 21st century consumer is changing its purchase habits!
Changing of postal businessYOUR CUSTOMER ISCHANGING - AREYOU FOLLOWINGHIS NEW HABITS ?
European Parcel market 2016 volume of B2C Total market: 3.1 b parcels, EUR 8–11b by 2016Source: TNT, 2009
The Hungarian on-line market 2001 - 2010 The Hungarian on-line market is estimated to reach by the end of 2010, EUR 450 million (+35%)
The Hungarian on-line buyers profile 55% of the on-line buyers are males – with 21% more than the females. By 2012 male vs. female will be 50-50% 12% = 1,075,000 Hungarian citizens above 12 years have purchased goods in the last 12 month on the internet
Average value of a purchase order (2009, Hungary)The average purchase order in 2009 was of HUF 11,000 (EUR 40,- ) 25000 20000 15000 10000 5000 0 2003 2004 2005 2006 2007 2008 2009 2010 exclusive on-line traditional webshop average purchase order
Reasons for shopping from home (Hungary)Future shoppings will 49% - save timeincrease by 1,3 times 37% - less expensive Source: GKIeNet., Hungary 2009 Source: Gemius, Hungary 2009
Reasons for shopping from abroad (EU vs Hungary) Convenience and lower price is the main reason for online shopping 35% see home delivery as important reason to shop online less expensive abroad 64% domestic not available 55% higher product quality 16% no large product portfolio 13% no reason 2% easier to order 1% not know 2% Source: GKIeNet., Hungary 2009 Source: Websurvey France, 2008
Case study – cross border e-commerceFROM ABROAD TOCEE VIA BUDAPEST .
Classical mail order company assisted by Magyar PostaThe business model Germany based mail order company is entering on the Romanian market with the purpose of selling goodsThe services offered Local distribution of unaddressed items (flyers) Local distribution of addressed items (catalogues and DM) Local distribution of parcel with COD Cash collection + bank transfer of collected cash Return logistics management (RLM) Postal payment services linked to the returnsThe contractual parties Mail order company and Magyar Posta
Conditions of the business model Sales channels used by the distance seller Flyers, DM and Catalogues incl. order forms Call center (telephone order) Home page Bank account opened at a local bank Return management Normal returns are managed by the subcontractor / distribuitor Reverse Logistics Management (RLM) by the local postal operator (DO) Payment of the returned goods is managed by the DO PO Boxes Letter mail items RLM
The procedure Managing the physical and digital flows Distance Receiving Delivering End Seller Post operator Customer xml file Transfer reportExplanation: Main features of the process:->24-48 h before delivery distance seller -cash collection done by the subcontractor is sending a pre-advice (xml-file) -collected cash transferred on the domestic->Magyar Posta is processing xml-file bank account opened by the distance seller at local bank->Magyar Posta is over-labeling the items - Transfer report sent to distance seller
The xml-file The content of the xml-file may vary from case-to-case<sorszam> 1<azonosito> CU1005NI0033508152510008990<alapszolg> A_173_EKP<iranyitoszam> 525100 | Covasna<suly> 370<tobb_kuld> 1<kulonszolgok> K_UVT,K_ORZ<uv_osszeg> 89.90<eny_osszeg> 0<kezelesi_mod> 2<alapdij> 9.45<tobbletdij> 0.50<címzett> MARIA-GYOPARKA BENKO<cimzett_hely> Baraolt<cimzett_ertcsat> 0745163465<cimzett_ertcim> firstname.lastname@example.org<orz_ido> 5<díj> 9.95<kozelebbi_cim> KOSSUTH LAJOS | 249 | BL / ANL AP / 2<megjegyzes><ugyfadat1> 56201419<ugyfadat2> 2187754 Before the handover at Budapest OE of the parcel (shipment) the electronic xml-file is sent (48 hours) Based on the xml-file the parcel are over-labeled The xml-file contains all the necessary details incl. COD amount
Critical problems encountered Main Reasons on Return Parcels Total Wrong address 570 consignee not responding after being notified three times 547 refused by consignee 4748 Total 5865 No reliable local databases => GIS (geomarketing solutions) Wrong / incorrect addresses => correct addressing Insufficient data collection on the home-page => corrections Customer habits: ordering on-line (not from catalogues) Uncert customers ordering products with COD = no responses about their orders Too long processing time from the order to the delivery causes refuses at delivery
Next stepsImproving the digital process (database, tracking, reporting) Magyar Posta = sending e-mail messages to the recipients tracking the events -> leaving the warehouse; leaving Budapest HUB; entering into Romanian HUB Subcontractor = sending SMS to the recipients for higher distribution rates FTP-server server based automatic (2x daily) tracking communication Database procedure based on html surface instead of e-mail
Conclusions Communication is not a letter mail anymore „E-shopping” is different type of postal business Cooperation and alliances for reliable „e-shopping” services-> developing cross border solutions-> targeting the buyers „Last mile” delivery staff can be „first mile”sales force by identifying the „e-customers” Be prepared -> future is here !