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IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
IBM eCommerce Myths & Trends 2013
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IBM eCommerce Myths & Trends 2013

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  • 1. Myths, Musts & trends of eCommerce October 2013 IBM Confidential © 2013 IBM Corporation 2
  • 2. Hosein Moghaddas Head of Smarter Commerce Software IBM Software Group • MD EMEA, ATG (Oracle) – Commerce Software • MD International, GSI Commerce (ebay) – Full Service Commerce BPO • COO, Mobile Money Network (Monitise) – mCommerce, mMarketing, mPayments • Most of my experience has been driving international efforts for global companies like IBM and eBay enterprise in the past • Have led key Commerce initiatives in Europe, US and Asia IBM Confidential Who I am 3
  • 3. • MYTHS, musts & trends of commerce IBM Confidential 4 eCommerce is a marginal sales channel
  • 4. • Online forecasted to have a strong 16% cumulative growth rate for the next 4 years! • Online outpacing the traditional industry more than 2x in some verticals (around 8% of the US total retail sales and 10% of the UK) Online is a strong growing industry Source: emarketer – B2C ecommerce sales worldwide by region forester – online retail sales forecast 2012 - 17 34% 29% 19% 15% 12% 8% 11% 24% Year 2012 Year 2016 B2C ecommerce sales on selected geographies (% of total ecomm market) USA EU Big 5 Japan China • Emerging markets, such as China, are still being downgraded by analysts IBM Confidential € 952.7 € 1,115.6 € 1,319.9 € 1,511.6 € 1,698.7 year 2012 year 2013 year 2014 year 2015 year 2016 B2C ecommerce sales worldwide, by region (billions) North America APAC Western EU Central & Eastern EU 5
  • 5. Online Sales Offline sales directly generated by the online channel Offline sales influenced by the online channel ~5%+ Depending on vertical, geography and execution ~ 10% Depending on retail structure, cross channel incentive scheme and management focus ~ 40%+ Some reliance on the cross channel awareness and the retail structure IBM Confidential But the value of the channel not only lies in its sales 6
  • 6. GOING GLOBAL IS EASY ECOMMERCE IS A MARGINAL SALES CHANNEL MYTHS, musts & trends of commerce IBM Confidential 7
  • 7. 7 out of 10 are price comparison engines in Germany Amazon appears first in France Organic search reflects clear country differences IBM Confidential We search in different ways 8
  • 8. Payment methods also vary, I.E. open invoice can account as much as almost 60% of the transactions in Germany IBM Confidential We use different payment methods 9
  • 9. Best in class online retailers adapt (in their key markets) their promotional calendar and content to the local shopping events and add the “local flavor” of their brand in those specific geographies IBM Confidential And we mark different our calendars 10
  • 10. A strategic approach to localization Business Impact A B C PIORITIZE AND LOCALIZE PROPERLY Sales potential justifies the investment LAUNCH IN STAGE 2 / LOCALIZE PARTIALLY Invest wisely based on the country potential FOLLOW AND EXPLOIT Exploit with limited investment Language Payments Logistics Localize Evaluate Do not localize IBM Confidential 11
  • 11. ONLINE IS A B2C THING GOING GLOBAL IS EASY ECOMMERCE IS A MARGINAL SALES CHANNEL MYTHS, musts & trends of commerce IBM Confidential 12
  • 12. The B2B ecommerce market is bigger than the B2C € - € 200.0 € 400.0 € 600.0 € 800.0 B2B ecommerce sales (bn) B2C ecommerce sales (bn) The B2B market is almost 2x the B2C market in the US and as big as about the same in the case of the european market, which grew at a rate above 18% in the last year, outpacing the B2C growth in the region IBM Confidential 13
  • 13. Global online players also focus on the B2B segment IBM Confidential 14
  • 14. B2B ecommerce market – Key nuances B2C eCommerce drive the B2B eCommerce customer experience1 Traditional channel conflicts require careful planning of marketing and incentives strategies2 Source your company with the right talent 3 - Personalized product - Long tail selection - Simplified log-in and checkout - B2C like pricing - Start with small volume clients - Empower your sales reps with the right technology to help them to sale to key customers - Import key talent from B2C - Grow operational talent from B2B Plan your roadmap on the B2C trends – B2B2C convergence!4 - Mobile - Omnichannel integration IBM Confidential 15
  • 15. MAKE ONLINE A PRIORITY Myths, MUSTS & trends of commerce IBM Confidential 16
  • 16. The online channel is an oddball to the traditional org chart The online channel, given its nature of sales + key marketing channel, Brings down old organizational paradigms and claims for a flat structure IBM Confidential 17
  • 17. The strategic importance of a channel that affects around 50% of your Sales requires adequate focus and top management visibility Which requires top organizational visibility IBM Confidential 18
  • 18. Some winning guiding principles IBM Confidential Make the store your most immersive marketing touchpoint •Provide rich content and open all your communication channels Treat the online store like your flagship store •Include all your available stock and provide filtering tools Communicate your presence at all levels •Communicate your offline presence online •Let your clients find you offline (store locator, where 2 shop, etc.) Analyze, measure & correct •Use core site metrics to understand customer behavior and to test commercial actions within the channel 19
  • 19. Smarter Commerce – Best practice not common practice IBM Confidential Social Collaboration Social business applications Real-time collaboration Mobile collaboration Office productivity suites and web editors Unified Communications Unified communications middleware Real-time expertise communities Web Experience Customer web experience Employee web experience Electronic forms Commerce Selling solutions Order management Supply chain management Decision optimization Enterprise Marketing Management Cross-channel campaign management Marketing performance optimization Digital marketing optimization Web analytics Smarter City Operations Planning and management services Infrastructure services Human services 20
  • 20. Best practice, increased EBITDA IBM Confidential Social Collaboration Social business applications Real-time collaboration Mobile collaboration Office productivity suites and web editors Unified Communications Unified communications middleware Real-time expertise communities Web Experience Customer web experience Employee web experience Electronic forms Commerce Selling solutions Order management Supply chain management Decision optimization Enterprise Marketing Management Cross-channel campaign management Marketing performance optimization Digital marketing optimization Web analytics Smarter City Operations Planning and management services Infrastructure services Human services IBM All Others 3.22% 3.37% 4.7% Uplift Generally, IBM clients outperform other solutions in terms of conversion rate by 4.7% 21
  • 21. GET ACTIVE & VIRAL! MAKE ONLINE A PRIORITY Myths, MUSTS & trends of commerce IBM Confidential 22
  • 22. Promotions drive critical sales volumes Discount Promotion Private Sale Plus Spend To Get Promotion SALES Smart promotions help us to increase our averages off peak sales, think creatively, promotions do not equal discounts IBM Confidential 23
  • 23. But require focus and thoughtful planning January-09 February-09 March-09 April-09 1 2 3 4 1 2 3 4 5 6 7 8 1 2 3 4 5 5 6 7 8 9 10 11 2 3 4 5 6 7 8 9 10 11 12 13 14 15 6 7 8 9 10 11 12 12 13 14 15 16 17 18 9 10 11 12 13 14 15 16 17 18 19 20 21 22 13 14 15 16 17 18 19 19 20 21 22 23 24 25 16 17 18 19 20 21 22 23 24 25 26 27 28 29 20 21 22 23 24 25 26 26 27 28 29 30 31 23 24 25 26 27 28 1 30 31 27 28 29 30 May-09 June-09 July-09 August-09 1 2 3 1 2 3 4 5 6 7 1 2 3 4 5 1 2 4 5 6 7 8 9 10 8 9 10 11 12 13 14 6 7 8 9 10 11 12 3 4 5 6 7 8 9 11 12 13 14 15 16 17 15 16 17 18 19 20 21 13 14 15 16 17 18 19 10 11 12 13 14 15 16 18 19 20 21 22 23 24 22 23 24 25 26 27 28 20 21 22 23 24 25 26 17 18 19 20 21 22 23 25 26 27 28 29 30 31 29 30 27 28 29 30 31 24 25 26 27 28 29 30 September-09 October-09 November-09 December-09 31 1 2 3 4 5 6 1 2 3 4 1 30 1 2 3 4 5 6 7 8 9 10 11 12 13 5 6 7 8 9 10 11 2 3 4 5 6 7 8 7 8 9 10 11 12 13 14 15 16 17 18 19 20 12 13 14 15 16 17 18 9 10 11 12 13 14 15 14 15 16 17 18 19 20 21 22 23 24 25 26 27 19 20 21 22 23 24 25 16 17 18 19 20 21 22 21 22 23 24 25 26 27 28 29 30 31 26 27 28 29 30 31 23 24 25 26 27 28 29 28 29 30 31 DiscountSpend To GetThematic SalePrivate Sale PlusShip Offer Key brands plan promotions within their retail calendar planning and balance their content to create the “what’s next” effect 24
  • 24. Do not fear aggressive promotions Aggressive first purchase discounts creates a valuable early engagement IBM Confidential 25
  • 25. The world is social, embrace it strategically *Source: Mashable / Gartner research IBM Confidential By 2015, 50% of online sales will involve social networks*, make sure you’re present 26
  • 26. FORGET MULTICHANNEL, ENABLE OMNICHANNEL! GET ACTIVE & VIRAL! MAKE ONLINE A PRIORITY Myths, MUSTS & trends of commerce IBM Confidential 27
  • 27. How retailers think their customers shop Check advertising Go to store Compare products SHOP Go to the mall Check around Compare products SHOP Surf the web See a product I like Compare products SHOP We tend to think of our clients as being silos, in the same way we managed our channels in the past IBM Confidential 28
  • 28. This is our client's real purchasing path Go to the mallCheck advertising Compare products online Go to store Try the product Read reviews Download the app Check youtube video Check Facebook Check at the offline store Browse the eShop Google the product SHOP But our clients do not understand channel strategy and will contact your brand through all their available channels IBM Confidential 29
  • 29. Store / branch call center POS postal mail mobile Email Web site / social media pages Webstore Distribution Centers Kiosk censored Omnichannel commerce takes an holistic view to the consumer experience through all available shopping and communication channels IBM Confidential What Omnichannel means 30
  • 30. Omnichannel, the low hanging fruit with direct ROI impact Shop online in store kiosk Shop online, pick up in store Ship from store Reserve in store Valueproposition +Flexibility +Transparency +stock utilization + “Saved” sales Return / exchange in store Integrating distribution channels provide two key advantages: lost sales recovery and; inventory utilization optimization IBM Confidential 31
  • 31. 48% 36% 28% 25% 25% 20% 16% 10% 9% 22% Increased online sales Increased customer satisfaction Decreased operating costs increased profitability Decreased call center volume Increased offline sales Increased employee morale Increased operating costs other No impact Impact of omnichannel on selected companies Omnichannel makes financial sense IBM Confidential *Source: Forrester : 2011, “Welcome To The Era Of Agile Commerce” Omnichannel makes sense from the financial point of view but also helps to get the right customer: The omnichannel customer is worth 5X more than single channel clients* 32
  • 32. Mobile & tablet are taking over traffic IBM Confidential 88.62% 78.99% 5.95% 10.58% 5.42% 10.44% Jan 2012 Jan 2013 Tablets takeover? Computer Tablet Smartphone Mobile commerce is holds the growth record in the industry and as of today represents 20%+ of the online sales (smartphone+tablet) 33
  • 33. What’s coming next… smarter apps Technology outpaces retailers’ adoption path, every day there’s a first mover advantage to be taken IBM Confidential 34
  • 34. What’s coming next… TCommerce The ultimate browsing device, your TV aims to become a key channel device in the years to come, make sure you align your roadmap IBM Confidential 35
  • 35. PERSONALIZED SHOPPING Myths, musts & TRENDS of commerce IBM Confidential 36
  • 36. Product personalization makes your client feel special A personalized product creates a unique customer experience, you are allowing your client to make your product his own, a powerful tool in the era of homogenization IBM Confidential 37
  • 37. Even if it’s not fashion, personalization is cool Online personalization has broken the “fashion” silo, finally we understood that people want to be unique no matter what they buy IBM Confidential 38
  • 38. Personalized shopping also can address experience Augmented reality narrows the offline – online gap (results might vary  ) IBM Confidential 39
  • 39. We can also personalize our experience on the spot Live chat allows us to engage the client on-the-spot and turn visitors into actual buyers IBM Confidential 40
  • 40. Personalization works both ways Mobile apps can leverage the in-store experience by providing real-time offers and useful information that will help to close the deal IBM Confidential 41
  • 41. ENHANCED CONTENT AND SOCIAL SHOPPING PERSONALIZED SHOPPING Myths, musts & TRENDS of commerce IBM Confidential 42
  • 42. We are the premium source of information for our clients Communicating our expertise helps our customers to understand the value of our product IBM Confidential 43
  • 43. Remember content as products, has to be found Providing product specific filters improves the shopping experience when you’re handling sizable catalogues IBM Confidential 44
  • 44. Images and videos help to close the online / offline gap Superb photo/video content address directly one of the biggest Show stoppers online, the look and feel IBM Confidential 45
  • 45. Peer recomm. P2P User curated shopping Social networks Social shopping Group buying Participatory Commerce Social commerce means also integrating retailers Social commerce still has not taken off to the fullest and not all necessarily fit your business model, but try to follow and invest in the ones that fit your customers because they might boost your sales in the near future 46
  • 46. Social commerce: integrations example IBM Confidential Integrate promotions and customer service to social media and use blogs to get the “street feeling” 47
  • 47. Social Commerce: Client reviews Customer reviews provide credibility and transparency IBM Confidential 48
  • 48. DELIVERY MANAGEMENT ENHANCED CONTENT AND SOCIAL SHOPPING PERSONALIZED SHOPPING Myths, musts & TRENDS of commerce IBM Confidential 49
  • 49. Manage threshold dynamically Shipping is not only a key part of the ecommerce value chain but also one of the most powerful marketing tools you have Shipping is not a simple cost decision Ad financed logistics IBM Confidential 50
  • 50. Best in class service requires product focus Shipping differentiation features like worldwide reach or same day delivery will create competitive advantages IBM Confidential 51
  • 51. Collection points – not a small trend Operating in France - 4000 local stores overall Operating in France, Belgium, Luxembourg, The Netherlands & Spain 5300 local stores overall - 350 Partners Operating in France, Luxembourg, Belgium, Portugal & Spain 4300 local stores overall - 15 Partners Operating in Germany - 2,400 automated lockers Operating in Germany - 14,000 local stores Collection points add flexibility to the client and even though is a winner trend in France and Germany, it will surely expand WW IBM Confidential 52
  • 52. Stores become virtual IBM Confidential Collection points with changing rooms! 53
  • 53. MYTHS, MUSTS& TRENDS of commerce IBM Confidential 54
  • 54. Contact details Next steps: • Review your current scope • Spend a day with IBM to identifying areas to address maximizing your EBITDA IBM Confidential Hosein Moghaddas Head of Smarter Commerce Software IBM Software Group Hosein.moghaddas@uk.ibm.com Tel: +44 7974 230697 55

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