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Borderless Digital Commerce - Walter Devenuto, President EMOTA

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Opening Presentation at the International E-Commerce Forum in Barcelona on 14th March 2013, with up-to-date stastistics on the European e-commerce market, most important trends and best practices in international online retail, and an overview of EMOTA lobbying activities for e-commerce with the European Union institutions

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Borderless Digital Commerce - Walter Devenuto, President EMOTA

  1. 1. EMOTA represents 3,500 multi-channel/online retailers in 15 countries • 15 European countries • 16 member associations • 3,500 companies • € 250 billion turnover • 83% of European e-commerce
  2. 2. E-Commerce Statistics
  3. 3. E-Commerce contributes significantly to growth and job creation Contribution to GDP growth Average: 21% • 2.6 jobs created for each lost • internet-intensive companies createSweden 33% 2x jobsGermany 24% UK 23% France 18% USA 15% Italy 12% 0% 10% 20% 30% 40% Source: McKinsey, 2011 Note: Internet % contribution to GDP growth 2004-2009 – mature countries -1-
  4. 4. In addition, E-Commerce enables consumers to save money and time Reasons for shopping online lower prices 66% save time 50% price comparison 33% open anytime 33% wide selection 22% Consumer gains from e-commerce home delivery 11% (wider choice + lower prices): currently € 12 Bn. more product information 10% potentially € 200 Bn. 0% 20% 40% 60% 80% Source: Civic Consulting/TNS, 2011 Note: consumer survey – 3 most important reasons for shopping online (sample of 13,872 online shoppers) -2-
  5. 5. E-Commerce in Europe reached a €300 Bn. turnover, with 20% growth E-commerce turnover by region Growth€ Billion 300 Europe +20% 300 250 250 270 N. America +14% 215 237 200 185 210 215 Asia Pacific +36% 171 170 150 154 158 100 122 84 48 ROW +44% 50 66 33 19 26 13 - 2008 2009 2010 2011 2012 Source: EMOTA/IMRG, 2012 -3-
  6. 6. UK, France and Germany account for 60% of European E-Commerce European E-commerce turnover by country 2012 (€ billion) Other Eastern Europe Italy 12 15 Russia 10 UK Spain 10 11 90 Benelux 15 Austria/ 17 Switzerland 29 46 Scandinavia 45 France Source: EMOTA, 2012 Germany Note: B2C E-commerce turnover includes online travel, digital downloads and event tickets; excludes online gaming and financial services -4-
  7. 7. E-Commerce is growing very fast throughout Europe E-commerce growth by country in 2012+30% +27% +27%+25% +19% +18% +20% average +19%+20% European growth +14% +14%+15% +12%+10%+5%+0% Source: EMOTA, 2012 -5-
  8. 8. Online share of retail high in UK/Scandinavia, low in South/East Europe Online share of retail by country 201225%20%15% European10% average 5% 0% Source: EMOTA, 2012 Note: % of e-commerce turnover on total retail trade -6-
  9. 9. There are significant differences in E-Commerce penetration and spend 80% 70% UK Germany Scandinavia 60% Benelux Digital Agenda France target 2015 50%E-Commerce 43% EU average 40%penetration Austria/Switzerl. 2011 30% Spain 20% Eastern Italy 10% Europe 0% - 500 1.000 1.500 2.000 2.500 3.000 3.500 Source: EMOTA, Eurostat, 2011 Average annual expenditure (€) Note: E-commerce penetration: % of population aged 14-74 years buying online -7-
  10. 10. Very few consumers shop online across borders Proportion of consumers buying online from another country25% Digital Agenda20% target 2015 GAP15% EU average10% 20115%0% Source: Eurostat, 2011 -8-
  11. 11. In fact, consumers are more worried about international delivery Concerns about cross-border vs. domestic online purchases Long delivery times Returns Guarantee No delivery Payment security Data privacyUncertainty on rights 0% 5% 10% 15% 20% 25% 30% 35% % domestic % increase cross-border Source: Civic Consulting/TNS, 2011 Note: % of consumers reporting concerns about buying products online in their own country vs. in another EU country (sample: 29.010 individuals) -9-
  12. 12. In addition, only 27% of retailers sell across borders Proportion of retailers selling in at least one other EU country50%40%30% EU 27% average20%10%0% Source: TNS, Flash Eurobarometer 331, 2012 -10-
  13. 13. Many retailers are deterred by legal/tax and payment issues Barriers to cross-border sales for retailers Different consumer lawsRisk of fraud/non-payments Different tax regulations Delivery costs Complaints resolution Own restrictions Customer service Language differences 0% 5% 10% 15% 20% 25% 30% 35%Source: TNS, Flash Eurobarometer 331, 2012Note: % of retailers reporting obstacles to cross-border sales to other EU countries -11-
  14. 14. Trends & Best Practices
  15. 15. Several e-retailers are expanding globally, offering worldwide shipping ASOS.com worldwide delivery 7 country-specific websites 15 currency options Free worldwide shipping Shipping to 190+ countries 5M customers 160 countries 62% international sales -12-
  16. 16. Excellent service is ensured trough local logistics/customer care centers Yoox.com global presence Revenues by geography Brands Other Italy Japan 16%N.America 22% 5 logistics centers Europe (excl. Italy) 7 local offices 8 customer care centers -13-
  17. 17. Best-practice online retailers provide several delivery options … Express delivery Track & trace Subscription service Click & collect Parcel lockers Easy returns -14-
  18. 18. … increase consumer confidence with an excellent customer service … Zappos customer service policy • “WOW” customer service • Family culture • Outstanding service model – Overnight shipping – Free shipping both ways – 365-day return policy – 24/7 availability with toll-free number • Real inventory in warehouse -15-
  19. 19. … and tailor payment methods to specific national preferences Online payment methods by country100% Other80% Invoice COD60% Online payment40% Bank transfer Debit card20% Credit card 0% Source: Civic Consulting/TNS, 2011 -16-
  20. 20. Most retailers are adopting a multi-channel strategy Amount spent by channel Internet / mobileSource: McKinsey, 2009Note: Average annual dollars spent per customer by channel (apparel example) -17-
  21. 21. Multi-channel integration requires enterprise-wide changes Multi-channel integration Organization • Integrate online/offline teams • Marketing and product management Systems • Integrate front-end and back-office • Inventory levels and pricing • Customer database • CRM systems Operations • Picking and fulfillment • Return handlingSource: Accenture, Booz & Company, 2012 -18-
  22. 22. Mobile commerce is expanding rapidly in Europe€ Billion European mobile commerce market estimate 19 20 17 16 11 12 7 8 5 3 4 - 2012 2013 2014 2015 2016 2017 Source: Forrester, 2012 Note: purchases via smartphone - excludes tablets and mobile payments at retail points of sales -19-
  23. 23. Shoppers use their mobiles to research products and find deals In-store activities of mobile shoppersprice comparison 54% mobile coupon 54% product review 51% QR code scan 45% retailer website 33% retailer app 28% 0% 10% 20% 30% 40% 50% 60% Source: Vibes Media, 2012 -20-
  24. 24. Many retailers developed mobile apps to facilitate product research John Lewis mobile app • Optimized navigation • Free Wi-Fi in stores – Search product information – Check ratings and reviews – Compare competitors’ prices • Sales staff available to help customers -21-
  25. 25. Other retailers are testing virtual stores with smartphones Tesco virtual stores • Grocery shopping “on the go”, in subways, train stations or bus stops • Scan QR code with smartphone app • Orders delivered at home on the same day -22-
  26. 26. Social commerce is also expected to boom in the next few years$ Billion Social commerce market estimate 30 30 25 U.S.A. 20 14 20 9 14 15 9 5 Rest 10 5 3 16 of the 12 World 5 1 8 6 4 0 2011 2012 2013 2014 2015 Source: Booz & Company, 2011 -23-
  27. 27. Social networks are already a fundamental enabler of E-Commerce Share-to-purchase funnel 62% read 75% click 53%All online friends’ 25% of all through to purchaseshoppers comments shoppers retailer’s site product on products Conversion Product driver discovery mechanism Source: Sociable Labs, 2012 -24-
  28. 28. Pioneer e-retailers generate substantial sales from social networks Fab.com social shopping features Social feed Facebook log-in Credits for sharing -25-
  29. 29. EU Lobbying for E-Commerce
  30. 30. Upcoming EU legislation will harmonize consumer laws across Europe Regulation on Consumer Data Protection Rights Directive E-Commerce Action Plan Directive on Green Paper on Payments ADR/ Common Regulation European on ODR Green Paper on Sales Law Parcel delivery (CESL) Online Trustmarks -26-
  31. 31. EMOTA is working to balance business and consumer interests • Harmonize consumer legislation across Europe • Improve consumer trust in cross-border shopping • Ensure competitive international parcel delivery services • Ensure security and efficiency of online payment platforms • Accelerate broadband networks development Avoid Balance unnecessary consumer/ extra business costs/burden interests for businesses -27-
  32. 32. Distance sales rules will be standardized in all EU countries Consumer Rights Directive Standard withdrawal right: • Withdrawal period: 14 days • Reimbursement within further 14 days Price transparency: • No pre-ticked boxes for extra services • No payment / telephone surcharges Information requirements: • Order button with “obligation to pay” • Delivery/payment restrictions indicated before order -28-
  33. 33. We are working to limit data protection burdens for businesses Data Protection Regulation Benefits: Issues:• Rules valid throughout Europe • Explicit consent• Elimination of notifications • Right to data portability• Single supervisory authority • Constraints in profiling for companies -29-
  34. 34. EMOTA is developing a European trustmark for cross-border shopping European harmonization of national trustmarks • Harmonize codes of conduct • Accredit national trustmarks • Promote European trustmark -30-
  35. 35. EMOTA commits to drive international e-commerce growth in Europe EMOTA Borderless Digital Commerce Commitment Merchants Consumers • Govern and guide international e-commerce development • Inform e-commerce industry with standard reporting • Proactively listen and respond to needs of key stakeholders Providers Governments -31-

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