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Getting from Here to There: How to assess your business, define an overall eCommerce strategy, and create a roadmap
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Getting from Here to There: How to assess your business, define an overall eCommerce strategy, and create a roadmap

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  • 1. eCommerce Strategy Bernardine Wu CEO, FitForCommerce February 8, 2011© FitForCommerce
  • 2. Multi-channel eCommerce Strategy Bernardine Wu CEO, FitForCommerce February 8, 2011© FitForCommerce
  • 3. O mni-c hannel eCommerce Strategy Bernardine Wu CEO, FitForCommerce February 8, 2011© FitForCommerce
  • 4. Com merce eCommerce Strategy Bernardine Wu CEO, FitForCommerce February 8, 2011© FitForCommerce
  • 5. Strategy is only as good as the execution© FitForCommerce 5
  • 6. The best intentions don’t always work out© FitForCommerce 6
  • 7. Band-aids are a sure sign you need a change© FitForCommerce 7
  • 8. “Making things work” doesn’t always mean it’s what’s best© FitForCommerce 8
  • 9. Getting from Here to There© FitForCommerce 9
  • 10. About FitForCommerce • FitForCommerce is a consultancy founded to help online businesses ‘figure out what they need and how/where to find it’ – Team of former multichannel retailers, marketers, technologists and service providers, with hands-on expertise in eCommerce and mCommerce • eCommerce Diligence™ is a philosophy and methodology based on diligent preparation and decision-making to ensure success – Strategic Diligence – eMerchandising, eMarketing, Multichannel, Operations, Technology, Organization, Financial Planning – Selection Diligence – Requirements, RFP, Selection of eCommerce technologies and providers including: platforms, mCommerce, back-end, all point solutions, 3PL/CS – eCommerce Marketing Consulting – mCommerce Strategy – Implementation Coaching • eCommerceKnowHow.com is the first eCommerce knowledge base: – Best practices, feature evaluations, expert advice and info on 100s of features, functions and topics – 100s of provider and solution comparative info • FFC mCommerce Benchmark & Buyers Guide is a structure benchmark to assess the market, compare where you stack up, help prioritize improvements (2Q 2011) 10© FitForCommerce
  • 11. Client Sampling© FitForCommerce
  • 12. The Obvious Assess Develop Develop a where a full Execute tactical plan you are strategy • Evaluate • Goals • What • Do it • Competition • Approach • Who • Re-evaluate • Benchmark • How • Adjust • When • Re-do • How much $ Keep it Simple!© FitForCommerce
  • 13. © FitForCommerce eMerchandising eMarketing Webstore Technology P&L / Budgeting Operations eCommerce Strategy Organization
  • 14. Critical Success Factors MERCHANDISE MARKETING The appropriate assortment for the target Being found when someone is searching audience in line with the brand and and driving qualified traffic that will buy showcasing products to sell the most and return to buy from the webstore FUNCTIONALITY TECHNOLOGY Appropriate features, functions, Appropriate tools, technology, integrations capabilities for a great customer to support the business in the most experience and for efficient management efficient and fail-safe manner and growth of the business ORGANIZATION OPERATIONS Right skills, right people, doing the right Processes that add value and are efficient; things at the right time – and working and are not substitutes for sub-optimal together with shared objectives and organization, functionality, technology accountability under clear leadership BUDGET / P&L Investment thinking so funds and resources go to the right places and there is room for experimentation© FitForCommerce 14
  • 15. BENCHMARKING Knowing how you stack up© FitForCommerce
  • 16. ( Sample ) Market Comp 16© FitForCommerce
  • 17. ( Sample ) IR Top 500 • Comparison of sites for conversion rate and average ticket 17© FitForCommerce
  • 18. Gathering Intel • Consult with an Expert • Other competitive data sources: – Quantcast • Mystery Shopping – Hitwise – Google Trends • Hoovers, D&B & other financial – Google Insight sources – Google Adwords • IR Top 500 Guide – Way Back Machine – The Search Monitor • Vendors – Comscore – Alexa • Industry news, Blogs, Newsletters – BuzzNumbers – Compete.com • Attending & Networking at Events – ZoomInfo • Recruiting – Statsaholic – nielsen-online.com • Usability Studies, Eye Tracking, – Netcraft Focus Groups – Ranking.com – Highbeam 18© FitForCommerce
  • 19. MERCHANDISE The appropriate assortment for the target audience in line with the brand and showcasing products to sell the most© FitForCommerce
  • 20. eMerchandising • What are you selling? – Brand alignment – Merchandise assortment – Merchandise depth – COGS, Pricing, Margin – Multichannel dynamics • How are you selling? – Robust information on webstore – Emotional connection – Leading her to a sale, making it easy – Guided selling – Cross-channel drivers© FitForCommerce
  • 21. Merchandising Analysis© FitForCommerce
  • 22. Romancing the Product© FitForCommerce
  • 23. Others: Hero image Lifestyle Swatching Zoom 360© FitForCommerce
  • 24. MARKETING Being found when someone is searching and driving qualified traffic that will buy and return to buy from the webstore© FitForCommerce
  • 25. Marketing Investment • Creating Marketing Budgets is both an art and a science with more emphasis on individual success of marketing programs. Industry benchmarks are guides rather than rules. Source: The Econsultancy / ExactTarget Marketing Budgets 2010 Report is based on a survey of more than 1,000 client-side marketers and agency respondents.© FitForCommerce
  • 26. Balancing the eMarketing Investment CUSTOMER ACQUISITION CUSTOMER RETENTION • Branding, Advertising • Consistently great experience • Outreach: Email, Social, • Outreach: Email, direct mail Mobile • Loyalty programs • Get found (80% rule!): SEO, • Community, social PPC/SEM, Affiliate, • Content Marketplaces (CSE) • Cross-channel: PIP • Offline: print ads, catalog, direct mail • Cross-channel: store-to-web, web-to-store, catalog-to-web, package inserts programs (PIP), in-store kiosks/endless aisle, POS programs (POP)© FitForCommerce
  • 27. Attribution of Marketing Spend • Track sources for traffic, quality, conversions • Use matchbacks for catalog or print • Analyze house file for size, age, activity© FitForCommerce
  • 28. Detailed Analysis • Abandonment by Channel - Email-driven traffic is is showing significant signs of weakness, particularly in View Bag and Order Complete stages of checkout Abandonment Rate© FitForCommerce
  • 29. Email Marketing • Performance – Bounce rate: 11% (first campaigns) 2.5-3.5% (established) – Open Rate: 25-30% – Click Through Rate (CTR): 10-15% • Key to Execution – Segmentation & Targeting – Messaging (Relevancy) & Frequency – Trigger – Reporting – Think in context of contact strategy – Beware of attrition • Measuring Success – ROAS = Return on Advertising Spend (a.k.a. ROI) – CPA = Cost Per Acquisition – Are you overpaying for any of your sales? – Cannibalization vs. Lift • Lift is the net amount of traffic that is added to the mix • Cannibalization is the portion of traffic that comes at the expense of another driver© FitForCommerce
  • 30. Source: emarsys eMarketing Systems 2010 Email Report The data for this report was collected between January 1 and December 31, 2009. Results based on analysis of response data from more than 30,000 regular B2B and B2C email campaigns (newsletters, promotional emails) sent by more than 500 companies.© FitForCommerce
  • 31. Marketing Spend • Paid Search – Average conversion rate for Paid Search is 3.15% (Source: eConsultancy) – Percentage of site visits via paid search 19.8% (Source: eConsultancy ) – Retailers on average spend 40% of their budget on Search (Source: Internet Retailer) • Marketplaces/Feeds/Comparison Shopping Engines – Average conversion rate for Comparison Shopping Engines is 3.7% (Source: Marketing Sherpa) – Shopping Feed demand is mostly driven by consumer looking to comparison shop for prices – Apparel Retailers are less likely to be successful with shopping feeds • Banner Ads – CPM = $10 (a typical rate for general, not-very-targeted websites) (Source: eConsultancy) – CTR = 0.5% (Source: Marketing Sherpa) – Conversion Rate = 2% (Source: Marketing Sherpa)© FitForCommerce
  • 32. Distribution of Spend (example) Example of Spend/Revenue Scenario • Budget - 61% increase • Revenue - 23% increase • Email - Need aggressive growth in email capture/housefile. Numbers based on more targeted email strategy and trigger program. • Paid Search - ROAS comes down and revenue increases 30% • Banner - Optimize program on no additional spend • Social - Optimal area to grow • Feeds - no growth planned • Other/Testing - No revenue $’s attached to Program/Bucket© FitForCommerce 32
  • 33. © FitForCommerce 33
  • 34. © FitForCommerce 34
  • 35. eMarketing KPIs • These KPIs should be compiled and reviewed to help drive the business: – Weekly Site Metrics Report – Channel Report – KPI’s Channel Report Website Metrics • Revenue by Media LY • Buying Sessions • Orders by Media LY • Orders per Session • AOV by Media LY • New Vs. Returning Visitors • Items per Order TY & LY • Shopping Cart Abandonment Rate • Conversion Rate LY • Days and Visit to Purchase • Visits LY • NTF • CPA • ROAS • Cost© FitForCommerce 35
  • 36. FUNCTIONALITY Appropriate features, functions, capabilities for a great customer experience and for efficient management and growth of the business© FitForCommerce
  • 37. ( Sample ) Funnel Analysis Percent Lost Between Sessions: Each Stage 21,022 15% Multi Page Sessions: 17,806 33% Browsers 11,975 73% Add To Bag 3,256 4.45% Checkout 14% convert Shopping Bag 2,801 44% Bill & Ship 1,572 12% Ship Meth 1,378 Could have Optional Offer abandoned Ship Code Page Meth or Offer 5% Omitted Pymt/ Code Page Review 1,310 29% Receipt 37 937*Monthly averages since 3/07 37© FitForCommerce
  • 38. ( Sample ) Competitive Feature Comparison Shopping Bag Features of an Site vs Competitors Retailer 38© FitForCommerce
  • 39. Seek out ‘market Feature: Ratings & Reviews data’ • Ask your peers • Read key reports, blogs – Forrester – Gartner – Getelastic blog • Benchmarking studies – e-tailing group EG100 Gauge (“egeg”) • Knowledge bases This is real data on the feature: Ratings Source: & Reviews© FitForCommerce 39
  • 40. ( Sample ) Eye Tracking / Usability Study Heatmaps Gaze Plots Cluster Maps Fixation Count, Observation Time, Participant % Charts 40© FitForCommerce
  • 41. ( Sample ) Top Recommendations: This Year Benefit/Impact  vs Tech Effort 1. Save Bag Longer: tie bags to user cookie, and save longer link B:XL T: L 2. Offer Code in Bag: offer code entry in bag and edit payment pg link B:XL T: XL 3. Edit Items in Bag: edit color, size, qty in bag, remove items in 1-click link B: L T: L 4. Shipping Method Selection: select method/see rates in bag, Mini-bag link B: L T: XL 5. Gift Card Balance: show GC and eGC amounts used, balance, check link B: L T: M 6. Add-to-Bag Confirm Page: add ATB overlay w/cross sells & offers link B: L T: M 7. Full Mini-Bag Overlay: show full bag in drop-down from mini bag icon link B: L T: M 8. Mini-Bag Icon: show item count in mini bag icon link B: S T: S 9. Gift Boxing in Bag: select gift boxing options in bag link B: M T: XL 10. Calculate Tax in Bag: calculate/show tax in bag link B: L T: XL 11. Cross Sells: show cross sells in ATB overlay, Mini-bag and bag link B: L T: M 12. Move Items to Wishlist: move items to/from wishlist, save for later link B: L T: L 13. Error Messaging: improve HazMat, Trademark, etc errors link B: L T: L 14. Address Error Messaging: improve address validation error msgs link B: L T: L 15. Promotion Communication: show promotions differently, deal pricing link B:XL T: L 16. Shopping Bag Item Detail: show delivery date, ‘was’ price, color name link B: M T: M 41 17. Log-in/Registration: login/registration at top of Bill/Ship pg only link B: M T: M 18. Email/Print Bag: email or print bag link B: M T: M 41© FitForCommerce 41
  • 42. Site Workflow Document© FitForCommerce 42
  • 43. TECHNOLOGY Appropriate tools, technology, integrations to support the business in the most efficient and fail- safe manner© FitForCommerce
  • 44. eCommerce Galaxy Multichannel eMarketing Affiliate Email Mobile SEO/SEM FacebookClick-Recording Comparison Marketplaces Social Engines Twitter MySpace Web Analytics Payment Ratings & Reviews CMS MCP Logistics Hosting ECP OMS Site SearchFulfillment Returns CDN WMS ERP Inventory Performance Searchandising Chat Security PCI Fraud Call Center eMerchandising Zoom Customer Care CR 360° Rich Internet Loyalty eCatalog M Apps (RIA) Customer Satisfaction Gifting Quick View Measurement Personalization International© FitForCommerce
  • 45. Key Indicators it’s Time for a Change • Falling Behind the Competition • Missed Benchmarks vs. Best Practices • Cannot Overcome Current Deficiencies • Internal Costs are Too High • Strategic or Future Growth is Dependent 45© FitForCommerce
  • 46. ( Over-simplified! ) Key Components & Integrations Mobile store Catalog (MCP) Traffic Marketing Webstore Customer Catalog (ECP) Service Pricing Content Images Merchandising Inventory Sales Tracking Price/Stock Qty. info Shipping info Order Mgmt Fulfillment (OMS) Tracking info WMS Retail Inventory Customers/orders (POS) ERP 46© FitForCommerce
  • 47. Mobile adoption • 58% of companies do NOT have mobile marketing OR mCommerce. • Of the 42% that have mobile: – 39% are using mobile marketing – 81% have a fully optimized mobile site – 42% have a mobile app Does your company have a: Mobile 42% • 34% of companies have mCommerce, not just mobile marketing© FitForCommerce Source: FitForCommerce M-Commerce Survey Sept 2010 47
  • 48. Plans for mCommerce • mCommerce website • mCommerce application • Only 17% have no plans • 37% have no plans • 46% have plans in next 12 • 46% in next 12 months months • 17% more than a year from now • 35% more than a year from now© FitForCommerce Source: FitForCommerce M-Commerce Survey Sept 2010 48
  • 49. Technical Component Diagram© FitForCommerce 49
  • 50. OPERATIONS Processes that add value and are efficient; and are not substitutes for sub- optimal organization, functionality, technology© FitForCommerce
  • 51. Functional Component Diagram© FitForCommerce 51
  • 52. Fulfillment Decision Tree + Leverage real estate + Leverage pooled inventory Modify DC - Not enough space (Bldg 4) - Too costly - Inefficient configuration Build new + Lower cost than 3PL long-term Fulfill warehouse in-house - Higher startup cost than 3PL - Slower time-to-market - New competency risk Inventory Size - All stores Fill from Store - Stores cannot handle volume - Regional stores SKU count Fill from Store Sources - Regional stores + Increase fill rate (as needed) + Leverage outside expertise + Lower investment cost + Speed-to-market + Variable cost base Fulfill from 3PL - Increased inventory - More expense over time + Leverage top vendors + Lower MSG inventory Vendor drop-ship (as supplement) - Dependence on others - Lower margin© FitForCommerce 52
  • 53. Cross-Channel • Check item availability in stores In-Store • Purchase Item online, pick-up in store • Drives store traffic Pickup • Inventory accuracy is crucial • Self service webstore access • Locate inventory in other markets Kiosk • Find products not offered in stores (vendor drop ship items) • Associate driven order entry for items not in stock Endless • “Ship anywhere” service in stores • Items shipped to guest from Aisle warehouse (no shipping charge) • Supplement inventory with items not in warehouse Store • Regional high volume stores • Pick/pack/ship in back stock area Fulfillment • Inventory accuracy crucial • Select store as a delivery destination in webstore & Ship To endless aisle • Use store inventory when in-store pickup is rolled out Store • Store to store shipping supported by store fulfillment© FitForCommerce 53
  • 54. ORGANIZATION Right skills, right people, doing the right things at the right time – and working together with shared objectives and accountability under clear leadership© FitForCommerce
  • 55. ( Sample ) eCommerce Org Structure Business Units Direct-to-Consumer eCommerce eCommerce Creative/Art eCommerce eCommerce Merchandising Marketing Direction Technology Operations “A” Merchandising/ Front-end Search Marketing Web Design Fulfillment Business Unit Development “B” Merchandising/ Email/Retention Back-end Graphics Design Customer Service Business Unit Marketing Development “C” Merchandising/ Photography Affiliate Marketing QA Business Unit Mobile Catalog Social Media Mktg Site Support M-Commerce Management Strategic Partner Content / Asset Strategic Tech Project/ Mobile Marketing Analytics / Reporting Management Partnership Mgmt Program Mgmt Merchants Marketing IT Operations Corporate Functions (Finance, HR, Legal) 55© FitForCommerce
  • 56. ( Over-simplified! ) Organizational Growth (Oversimplified) Growth Patterns LEVEL 7 LEVEL 6 LEVEL 5 Full Team Covering All Full Team Disciplines Full Team Covering All with Covering Disciplines Deep LEVEL 4 All with in-house Disciplines Deeper expertise, with Scale expertise, Scale, LEVEL 3 Full Team & Scale Heavy Mktg Covering Balanced Heavy Mktg Cross- Full Team All Outsourc’g Multi-channel channel LEVEL 2 Covering Disciplines & In-house Bringing it Some 3rd LEVEL 1 All with Scale 3rd Party back in-house Party/OS Handful of Disciplines & Vendors & Some 3rd 1-2 People Poised for Some Integration Party/OS Person Team Growth Outsourc’g s Shop (<5 FTE) (~15 FTE) (~20 FTE) (~30 FTE) (~40 FTE) (~60 FTE) < $1mm <$10mm $10-20mm $20-50 $50-150 $150m+ $250m+ 56 Note: includes tech, but not fulfillment/customer service 5© FitForCommerce 6
  • 57. Why not mobile? • Technical obstacles, resource constraints and skills, but not that they should not be. • Many need to focus on eCommerce before mCommerce - “One thing at a time” • Need to support the upside potential with hard data to make mobile commitment. Why are you not yet Mobile?© FitForCommerce Source: FitForCommerce M-Commerce Survey Sept 2010 57
  • 58. BUDGET / P&L Investment thinking so funds and resources go to the right places and there is room for experimentation© FitForCommerce
  • 59. $15M Revenue P&L Option 1 Option 2 Option 3 Option 4 FF in-house FF in-house FF outsrc (3PL) FF outsrc (3PL) Status Rate Best Pr CS in-house CS outsourced CS in-house CS outsourced Notes Gross Sales 15,000,000 15,000,000 15,000,000 15,000,000 Orders (Demand) $85.00 176,471 176,471 176,471 176,471 Based on GSI 2010 AOV Cancelled 3.5% (525,000) (525,000) (525,000) (525,000) Shipped Sales $ 14,475,000 $ 14,475,000 $ 14,475,000 $ 14,475,000 Orders (Shipped) 170,294 170,294 170,294 170,294 Returns 11.0% (1,592,250) (1,592,250) (1,592,250) (1,592,250) Adjustments 1.0% (144,750) (144,750) (144,750) (144,750) Cost of MVP Points Net Sales $ 12,738,000 $ 12,738,000 $ 12,738,000 $ 12,738,000 Cost of Goods Sold Initial COGS 45.0% 5,732,100 5,732,100 5,732,100 5,732,100 Freight In 1.0% 127,380 127,380 127,380 127,380 Markdowns 8.0% 1,019,040 1,019,040 1,019,040 1,019,040 Other/Shrink/Damages 1.0% 127,380 127,380 127,380 127,380 Total Cost of Goods Sold $ 7,005,900 $ 7,005,900 $ 7,005,900 $ 7,005,900 % of Net Sales 55% 55% 55% 55% Gross Revenue $ 5,732,100 $ 5,732,100 $ 5,732,100 $ 5,732,100 Operating Expenses Credit Card Fees 3.0% 434,250 434,250 434,250 434,250 Estimated fees based on industry average Bad Debt/Chargebacks 0.5% 72,375 72,375 72,375 72,375 Estimated fees based on industry average Shipping 15.0% 2,171,250 2,171,250 - - Estimated actual cost of shipping Shipping Revenue 17.0% (2,460,750) (2,460,750) - - Shipping & Handling charge to online customer Total Operating Expenses $ 217,125 $ 217,125 $ 506,625 $ 506,625 % of Net Sales 2% 2% 4% 4% Marketing Expenses 10.0% 1,273,800 1,273,800 1,273,800 1,273,800 Agency Fee 15.0% 161,070 161,070 161,069 161,070 Ongoing catalog maintenance(item copy; attributes/tagging; Content (copy & images) 30,000 30,000 30,001 30,000 images) SEM/PPC 25.0% 270,683 270,683 270,683 270,683 Pay for performance (search engines, network buys) Affiliates 15.0% 162,410 162,410 162,410 162,410 Third party costs & support email Marketing 5.0% 54,137 54,137 54,137 54,137 Cross Channel (DM, store adv.) 20.0% 216,546 216,546 216,546 216,546 Compare Shop Sites 5.0% 54,137 54,137 54,137 54,137 Promotions 10.0% 108,273 108,273 108,273 108,273 Free ship, Free gift w/ purchase, Channel Partner exclusive SEO 5.0% 54,137 54,137 54,137 54,137 Total Marketing Expenses $ 1,111,391 $ 1,111,391 $ 1,111,391 $ 1,111,391 % of Net Sales 9% 9% 9% 9%© FitForCommerce 59
  • 60. Summary of Options SUMMARY Current Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 5-Year 2010 Year 1 Year 2 Year 3 Year 4 Year 5 Cumulative %incr %inc %incr %inc r r Gross Sales $ 9,000,000 $10,000,000 $15,000,000 33 $20,000,000 25% $25,000,000 20% $30,000,000 17% $ $10m is baseline "min" and basically equals % 100,000,000 current site .$15m is "par" and should be achievable with additions and improved site. $20m is "max" or stretch goal for 2 yrs, but achievable in 3 yrs. Growth to $30m in 5 yrs is aggressive but achievable. Net Sales $ 8,492,000 $12,738,000 $17,174,729 Gross Revenue $ 3,821,400 $ 5,732,100 $ 7,728,628 $ 9,650,000 $11,580,000 $ 38,512,128 Expenses Option 1 FF & CS in-house $ 4,711,841 $ 4,822,816 2% $ 4,871,347 1% $ 5,358,481 10% $ 5,805,021 8% $ 25,569,505 Includes investment in new/multichannel capabilities Option 2 FF in-house / CS outsourced $ 4,794,341 $ 5,074,191 6% $ 5,243,347 3% $ 5,767,681 10% $ 6,248,321 8% $ 27,127,880 " Option 3 FF outsourced / CS in-house $ 4,533,141 $ 5,063,891 10 $ 5,483,947 8% $ 6,032,341 10% $ 6,535,036 8% $ 27,648,355 " % Option 4 FF & CS outsourced $ 4,615,641 $ 5,315,266 13 $ 5,855,947 9% $ 6,441,541 10% $ 6,978,336 8% $ 29,206,730 " % Gross Rev minus Expenses Option 1 FF & CS in-house $ (890,441) $ 909,285 $ 2,857,282 68% $ 4,291,519 33% $ 5,774,979 26% $ 12,942,624 See details for Expenses in yrs1-3 Option 2 FF in-house / CS outsourced $ (972,941) $ 657,910 $ 2,485,282 74% $ 3,882,319 36% $ 5,331,679 27% $ 11,384,249 " Option 3 FF outsourced / CS in-house $ (711,741) $ 668,210 $ 2,244,682 70% $ 3,617,659 38% $ 5,044,964 28% $ 10,863,774 " Option 4 FF & CS outsourced $ (794,241) $ 416,835 $ 1,872,682 78% $ 3,208,459 42% $ 4,601,664 30% $ 9,305,399 " 9% 15% % of Gross Rev. FYI, $10m store: 10- 15% profit CapEx (36 mth depr) Option 1 FF & CS in-house $ 1,874,667 $ 1,874,667 $ 1,874,667 $ 100,000 $ 100,000 $ 5,824,000 See details for CapEx; $100k in yr4&5 is nominal Option 2 FF in-house / CS outsourced $ 1,874,667 $ 1,874,667 $ 1,874,667 $ 100,000 $ 100,000 $ 5,824,000 " Option 3 FF outsourced / CS in-house $ 708,000 $ 708,000 $ 708,000 $ 100,000 $ 100,000 $ 2,324,000 " Option 4 FF & CS outsourced $ 708,000 $ 708,000 $ 708,000 $ 100,000 $ 100,000 $ 2,324,000 " Gross Rev minus Expenses minus % of rev % of rev % of % of rev % of CapEx (36 mth depr) rev rev Option 1 FF & CS in-house $ (2,765,107) - $ (965,382) - $ 982,615 5% $ 4,191,519 17% $ 5,674,979 19% $ 7,118,623 7% 28% 6% Option 2 FF in-house / CS outsourced $ (2,847,607) - $ (1,216,757) - $ 610,615 3% $ 3,782,319 15% $ 5,231,679 17% $ 5,560,248 6% 28% 8% Option 3 FF outsourced / CS in-house $ (1,419,741) - $ (39,791) 0% $ 1,536,682 8% $ 3,517,659 14% $ 4,944,964 16% $ 8,539,773 9% 14% Option 4 FF & CS outsourced $ (1,502,241) - $ (291,166) - $ 1,164,682 6% $ 3,108,459 12% $ 4,501,664 15% $ 6,981,398 7% 15% 2% Retail Store Revenue $ 568,000,000 $ 600,000,000 $ 618,000,000 3% $ 636,540,000 3% $ 655,636,200 3% $ 675,305,286 3% $ 3,185,481,486 Assumes 3% growth across 5 years Online as % of Retail Store Revenue 1.58% 1.67% 2.43% 3.14% 3.81% 4.44% 3.10% Average over 5 yrs Profit - Same growth as MSG $ 700,000 $ 1,050,000 33 $ 1,400,000 25% $ 1,750,000 20% $ 2,100,000 17% $ 7,000,000 However, this assumes can grow MSG % significantly even though they havent been able to in past years Profit - Same growth as past perf $ 630,000 $ 700,000 $ 791,000 6% $ 893,830 6% $ 1,010,028 6% $ 1,141,332 6% $ 4,536,190 More moderate growth© FitForCommerce 60
  • 61. People / Overhead Outsourced In-house FF/CS FF/CS© FitForCommerce 61
  • 62. Capital Investments Outsourced FF/CS In-house FF/CS© FitForCommerce 62
  • 63. Can you leapfrog the competition? eCommerce Evolution 4th Generation Functionality / Customer Value BEST-IN-CLASS • Personalized experience • Continuity/Subscription • MicroSites 3rd Generation • Integrated OMS ADDED FEATURES • Integrated call center • Search • Integrated POS • Promotions • Dynamic content mgmt 2nd Generation • Micro-targeted • Merchandising FEATURES • Order Status content/offers • Catalog • Cross Sells • Guided navigation • Shopping cart • Bolt-on approach • Rich media 1st Generation • Web analytics • Payments (3rd party systems) • Customer intelligence Marketing Homegrown Product-centric Customer-centric Only Manual updating Single-channel Merchandiser control Scaling issues Limited features Multi-channel © FitForCommerce© FitForCommerce 63
  • 64. Resources • There are many great resources out there for you – some are literally at your fingertips; others require more time and effort! • To name a few: – Tradeshows: IRCE, Shop.org, eTail – User Conferences Omniture & many others – Associations: MGA/DGA, NRF/Shop.org, DMA – Consultancies: FitForCommerce ☺ – Informational websites: eCommerceKnowHow.com, InternetRetailer.com, GetElastic.com – Industry papers/magazines: Internet Retailer, Stores, Multichannel Merchant – Networking Groups: Women in Ecommerce 64© FitForCommerce
  • 65. eCommerceKnowHow.com • Knowledge base and Community expertise • Searching and sorting for eCommerce Solutions • Do-It-Yourself requirements posting on Opportunity Corner 65© FitForCommerce
  • 66. Best Practices Checklists Affiliate Marketing Loyalty / Promotions Management Comparison Shopping / Marketplaces Mobile Commerce Consultancy / Professional Services Online Catalog / Catalog Management Content Delivery Networks Online Customer Support / Demos / Chat Content Management Systems Order Management Systems CRM Systems Payments / Fraud Services Customer Care Personalization Customer Satisfaction Measurement Rich Media Data  Mining / Warehousing Search Engine Marketing / PPC eCommerce Platforms Search Engine Optimization Email Marketing Shipping Gift Card / Certificates Site Search International eCommerce Social Media Internet Security Web Analytics ISP / Hosting Web Design / User Experience Logistics Website Performance / Monitoring • Best Practices Checklists • Key Questions to Ask Providers • 32 different topics • www.eCommerceKnowHow.com/bestpractices 66© FitForCommerce
  • 67. Q&A Bernardine Wu CEO, FitForCommerce bwu@fitforcommerce.com +1 973.379.7399 www.FitForCommerce.com www.eCommerceKnowHow.com Thank You 67© FitForCommerce