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E-Commerce 2016 Trends and Innovations

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Direct to consumer is a major growth platform for any brand and retailer today. With the rise in e-commerce, companies are offering innovative solutions to help shoppers enjoy a less costly, more convenient, and most of all more satisfying shopping experience.

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E-Commerce 2016 Trends and Innovations

  1. 1. E-Commerce Trends & Innovations Hamutal Schieber | July 2016
  2. 2. Introduction: The New Marketplace • In 2014, we published a research on e-commerce trends and innovations, focusing on key needs and solutions pertaining to: Personal Touch, Better Decisions, Hyper Convenience, Delivery & Shipment and Call to Action. • We had also highlighted an upcoming trend, which we dubbed as “buy/sell economy”. • Over the last 2 years, a lot of money went through the e-commerce funnel ($ 700 billion, to be specific, to almost $2.5 trillion). • This caused competitors to really up their game in regards to supporting decisions, providing convenience, personalizing and offering easy shipment / collection and return options. • Today, e-commerce is not merely a channel. It is a whole new world, changing industries in every possible aspect: from product variety (“1-brand retail”), through positioning (“1-niche retail”), to selling.
  3. 3. The Global E-Commerce Market
  4. 4. Online Retail: Global Market Size • According to eMarketer, global retail ecommerce sales, including online and mobile commerce, reached nearly $1.671 trillion in 2015, accounting for 7.4% of total retail spending. • By 2019, eMarketer expects worldwide online sales to more than double to $3.578 trillion, making up to 12.8% of total retail spending. eMarketer, Worldwide retail ecommerce sales: emarketer’s updated estimates and forecast through 2019, 2016
  5. 5. E-Commerce Growth Leads US Retail CAGR American Bakers Association, “What’s in store 2016 & beyond”, March 2016
  6. 6. Online Retail: Global Sales By Region • According to eMarketer, Asia-Pacific has been the leader in e-commerce in both value and growth rate terms, and is expected to continue and drive the market. The biggest markets in value terms are China, US, UK and Japan. • Schieber Research believes that the opportunities in new model creation in W. Europe and N. America will drive growth faster than forecasted. eMarketer, Worldwide retail ecommerce sales: emarketer’s updated estimates and forecast through 2019, 2016
  7. 7. Online Retail: Global Sales By Industry A.T Kearney, connected consumer study, April 2015 • The things we buy online today extend to any possible category: Products – food, beverage, non- food, beauty, household goods, appliance, etc.; services – health insurance premiums, telecommunications, financial services, consultancy, diet plans, fitness lessons; and content – subscriptions, information, video. • Overall, electronics, fashion, services, books, and tickets are the top categories for e-commerce; groceries and household items are the least commonly purchased, according to A.T. Kearney. Kantar Worldpanel, Accelerating the growth of Ecommerce in FMCG, 2015
  8. 8. Fastest-Growing Categories in US E-Commerce • According to comScore, in the U.S, Computer Hardware has long been the #1 category in digital commerce, but the Apparel & Accessories category is now the leader. comScore, 2016 U.S. Cross-Platform Future in Focus • Automotive is an emerging online commerce industry. Accenture surveyed 10,000 people in the U.S. and a handful of other countries about buying cars. Three-quarters of respondents said that “if given the opportunity, they would consider making their entire car-buying process online, including financing, price negotiation, back office paperwork and home delivery.” This is especially the case in China (90% of consumers) and Brazil (75% of consumers). Carvana, the digital used car retailer, is enabling consumers to complete the purchase process online, and then collect the car from a vending machine.
  9. 9. Largest Ecommerce Sites Globally • 10 Largest Ecommerce Sites Globally Rank Brand Name Monthly (Cookie) Unique Visitor Location 1 Taobao 601,450,542 Hangzhou 2 Amazon 524,470,572 Seattle 3 eBay 267,904,800 Bay Area 4 Alipay 104,530,651 Hangzhou 5 Alibaba 106,760,063 Hangzhou 6 Rakuten 65,012,387 Tokyo 7 Flipkart 64,870,673 Bangalore 8 Etsy 44,289,271 New York 9 Fiverr 53,670,235 New York 10 Snapdeal 30,232,183 New Delhi ecommerce-platforms, 2015 • Top Shopping Sites by Alexa Rank Brand Name Global Rank 1 Amazon 6 2 eBay 26 3 Netflix 36 4 amazon.co.uk 90 5 Walmart 142 6 Etsy 154 7 Steampowered 190 8 ikea 233 9 Homedepot 215 10 Target 218
  10. 10. From E-Commerce to M-Commerce • Probably the most important implication of the expectation for immediacy is the rise in mobile commerce. PayPal and Ipsos’ research expect mobile commerce revenue to reach $ 291 billion in 2016, in line with the rise in smartphone penetration. • Overall, a third of online shoppers surveyed said they’ve used their smartphone for making an online purchase in the past 12 months. For 18 – 34 year olds, the figure reaches as much as 59% of shoppers. 64% of smartphone users report using an app for purchases as opposed to the 52% who used mobile browsers, due to convenience and speed. • Mobile payments have become a part of the business landscape, and new technologies such as “pay with selfie” (Mastercard, Alibaba) have emerged. Source: Pymnts, Global M-Commerce Set To Leave E-Commerce In The Dust, Feb 2015 Starbucks is a leading mobile retailer, with 20% of sales coming from mobile. The coffee chain’s mobile app integrates content, payments, pre ordering and delivery.
  11. 11. From E-Commerce to M-Commerce Mobile shopping and desktop shopping caters to different occasions and behaviors, and therefore, multi-channel strategy is key. • According to Think With Google, AliExpress found that shoppers like to use multiple devices to complete a transaction (search from the mobile phone, purchase on their computers). Think with google, “AliExpress: E-commerce on the go”, May 2015 • Mobile shopping peaks during private time; Desktop transactions peak on weekdays, but mobile transactions peak on evenings and weekends when people are away from work. • Mobile sites need to keep it simple (for quick transactions; we assume that this also encourages impulse purchasing), yet mobile apps are usually used by returning, loyal customers.
  12. 12. Omni-Channel • According to a Google, Ipsos MediaCT and Sterling Brands study (2014), digital is transforming the in- store experience for customers. • 42% of in-store shoppers search for information online while in-store. For the most part, they're using search engines (64%). However, almost half of shoppers head to the retailer's own site or app. Only 30% will look up details from a different retailer's web site or app. • In the last few years, many online companies in the US have launched a physical presence in addition to their digital one. • According to senior VP at Razorfish, the big benefit of the flagship stores is that they’re terrific marketing vehicles to generate a lift in incremental shopping to the online store.
  13. 13. Omni-Channel • Eyewear online commerce company, Warby Parker, has been opening brand stores as a generator of awareness for the brand, as well as to drive traffic to the website and accelerate its e-commerce sales. In 2016 Amazon launched “Amazon Books”, a physical bookstore in Seattle. The store sells a limited selection of Amazon's best-reviewed books and doubles as a showroom for the brand's hardware lineup (Kindle, Fire TV, Fire tablets and Echo). • In 2015, menswear online retailer Bonobos launched its new "guideshop” – a showroom offering consumers to place an order and have it shipped for free.
  14. 14. Growing Platforms: Social Media • Social media growth in both pure social-driven retail sales and referral traffic is outpacing all other online channels. • Facebook is the leader among platforms, in line with its general position in the social media market. YouTube is an interesting source for online shoppers with 25% of a PwC survey respondents using this platform as part of their shopping experience. PwC, Total Retail Survey, 2016 Which social media do you regularly use as part of your shopping experience?
  15. 15. Growing Platforms: Social Media • In 2015 Instagram, Pinterest and YouTube launched a buy/shop now option on their platforms. However, these buttons are rarely used by consumers according to various surveys. In 2016, Twitter discontinued its buy button product. Instead, Twitter is shifting its resources to dynamic product ads. Marketingcharts, 2016
  16. 16. Growing Platforms: Content • Content and online commerce are now interlaced more than ever, with videos, ads, and editorials, enabling immediate purchase – either from the same website or through an affiliate.
  17. 17. Growing Platforms: Messaging Apps • Messaging Apps, like Whatsapp or Wechat, are also becoming an important service tool for online purchase. Best in class hotels and airlines have already begun implementing social media tools throughout the traveler’s path to purchase. Stayful is offering a #tweetstay feature – to reserve a stay through social media Chinese e-tailer JD.com, allows WeChat users to shop on JD.com through the chat app. Payments are supported by WeChat Payment feature, launched in 2013.
  18. 18. Growing Platforms: Subscriptions • Subscriptions provide a convenient way for shoppers to easily manage repeat purchase for regular essentials. • For retailers, this gives the benefit of planning ahead, as well as a regular revenue stream and less competition once the decision was made. • Therefore, retailers should reward shoppers for subscribing, not only through better prices but also through measures such as content, customization, VIP offers and other loyalty enhancing tactics. Starbucks has joined the coffee subscription trend Amazon is offering better discounts when enrolling in a subscription plan Harry’s is offering shaving products subscription
  19. 19. Growing Platforms: Peer to Peer • In 2014, we reported witnessing a significant trend towards providing the shopper with a platform through which he/she is able to sell goods. • Since then, we have witnessed numerous apps that enable people to buy, sell or swap goods, thus creating a new marketplace, in line with the overall Collaboration Economy trend. Others, such as Move Loot, shut down. • We expect Marketplaces to drive a shift in the ecommerce market, blurring the boundaries between individuals and businesses. www.trendtrunk.com eBay’s Valet: sellers take pictures of their items, and the app gives them an estimated price. Valets then list items for sale on eBay, and ship them to buyers. The seller gets 70% of the sale price. (discontinue of app announced in 2015 – but the platform still seems to be operating).StubHub www.offerupnow.com
  20. 20. Growth Strategies: Affiliate Marketing • According to BI Intelligence (Dec. 2015), affiliate programs have moved to the mainstream, with major retailers and publishers now using them to drive sales of all sorts of products, from electronics to apparel. • Affiliate marketing now drives as many e- commerce orders in the US as email – 16% of US e-commerce orders, according to marketing firm Custora. This makes affiliate marketing one of the four largest sources of e-commerce orders, outperforming social commerce and display advertising. • BI Intelligence
  21. 21. Shopper Motivations and Category Barriers
  22. 22. Shopper Motivations Drive E-Commerce Trends • According to Nielsen’s research (“Global connected Commerce”, Apr 2016), these are the main motivations for online shopping: Convenience • 53%: reducing time and effort spent shopping Informed Decision Making • 50%: reviews to help make better choices online & offline Deal Seeking • 49%: finding the best price possible Product Assortment • 49%: gaining access to more choices than available locally Boxed.com: buy in bulk for bigger savings
  23. 23. Shopper Motivations: choosing a retailer • A global 2016 PwC survey found that online shoppers choose a favorite retailer mainly because the prices are good. Another interesting finding is that 20% of shoppers choose a specific retailer due to the retailer’s reward program; we believe that this figure will rise as retailers develop better loyalty programs. • For Millennials (ages 18- 34) just 56% chose "good prices”, compared to 63% of the rest. PwC, Total Retail Survey, 2016
  24. 24. Barriers to Online Purchase • The main barrier in online purchasing is the ability to see, touch and try merchandise. Another barrier is immediacy – shoppers want their products now. • The way the product fits is a smaller barrier, probably because it is relevant to specific industries only. Source: Global PwC 2015 Total Retail Survey
  25. 25. Omni-Channel Retail: See, Touch, Try • Samsung 837 leverages “showrooming” by using the entire showroom for experimentation and workshops, while the purchase can only be completed digitally. • Blue Nile, online jewelry retailer, is dealing with the barrier for online jewelry purchase through the opening of physical stores.
  26. 26. Will it Fit • The “will it fit” barrier is mostly relevant to the apparel industry. Online retailers are using a variety of methods, including a flexible return policy; “order in several sizes” (and return the one which doesn’t fit); and try and decide. • When a shopper is dissatisfied with the purchase due to lack of fit, this may affect the shopper’s willingness for repeat purchase not only from that retailer, but also for the category in general. For that reason, a flexible and convenient return policy is a must-have for e-tailers. • Technology based strategies include body photo analysis or augmented reality. • Our “best in class” example is True Fit (see case studies). Sephora offers “Color IQ” – find it in store with a special device, then use your number to buy online; or find it online.
  27. 27. Will it Fit Hudson Bay (owner of Saks Fifth Avenue) acquired Gilt, the flash sales platform, in 2016, to enhance its position in digital commerce. The site boasts a current membership base of more than 9 million and delivers 50+ new sales each day. The company leveraged its multi- channel presence by offering returns to Saks Off Fifth stores. Lamoda, Russia’s leading fashion retailers, launched in 2011, offers free shipping, 365 days for return, and a try-on service, which includes 15 minutes wait by the delivery service for the customers to approve / return the merchandise.
  28. 28. The 2016 – 2017 E-Commerce Trend Map
  29. 29. Market Trends Map BestBetterGoodTrend / Strategy Real-time customer service, chats, bots Loyalty schemes, e-mailing, personalized couponing, social log in Recommendations based on previous searches/ orders, Wish Lists Personal Touch advisory services, AR / photo analysis for fitting, social integration, try before you buy Price comparison, Price Guarantees, demonstrations by real people, creating communities Ratings and reviews, videos, guides Better Decisions S-Commerce, better delivery & return options, VR, IoT / Wearables M-Commerce, product comparison tools, omni- channel, Mobile Commerce Bundling & item pairingHyper Convenience Same-day delivery, 1-hour time frame, “pre dawn” arrival, free delivery Click & collect, lockers, track shipment 2 – 5 days delivery, free shipping over a specific sum, package tracking Delivery & Shipment New business models (e.g., rent it, sell it, swap it), limited- time offers Multi channel service, chats, couponing, free trial / sampling Convenient cancellation & return policies Call to Action Source: Schieber Research, 2016
  30. 30. Personal Touch • Website-generated personal recommendations, based on the shopper’s wish list and/or previous purchase, is a basic personalization tactic today. • Couponing or special offers that are in line with the shoppers’ interests are becoming an essential component for loyalty. • To really drive personalization in the future, we believe that an actual interaction will have to take place. This does not have to be led by a human being; “bots”, as well as other automated, big data and personal data based systems, can also be utilized. Taco Bell’s newly announced digital ordering bot, integrated into Slack (source: Mobile Commerce Daily)
  31. 31. Personal Touch  Customization • The online platform enables shoppers to create their own, unique version of any product. Many brands have used this advantage, to turn everyday items into festive and differentiated products. Mondelez used personalization in digital commerce, to grow its Oreo brand as the company plans to grow its online sales 10 times – to $ 1 billion in 2020
  32. 32. Personal Touch  Loyalty • One of the main developments of the last 2 years, is the rise in loyalty management. • Using re-targeting / re-marketing (specifically, in social media), inbound marketing, and e-mail marketing, companies continue to pursue existing clients as well as leads or former clients, with special offers that are tailored to them according to previous interest expressed by them. Graze, an online subscription-based healthy snack service uses emailing as call to action. It seems that these offers are based on events such as hosting and sports games.
  33. 33. Better Decisions  Trial • Retailers are increasingly using the “try before you buy” strategy. • To tackle the trial barrier in categories that are harder to cross without trial, retailers offer to buy several items and return the ones they dislike. Warby Parker: building a successful online retailing model for glasses through free trialThirdLove: one of the bra-shopping start ups that supports decisions through trial, as well as product reviews.
  34. 34. Better Decisions  Trial • In 2016, eBay and leading Australian retailer Myer have launched the first-ever virtual reality department store. • The innovation allows customers to immerse themselves in a new experience of shopping inside a Myer store, with product information updated in real time. More than 12,500 Myer products can be browsed, selected and added to a shopper’s cart using eBay’s Sight Search function. • It works by using ‘shoptical,’ a specially designed virtual reality viewer. shoppers view a product, and by holding their gaze on it select an item which then ‘floats’ towards them. • Users can hold their eyes on the ‘Add to Basket’ icon to complete their purchases via the eBay app. (Watch the video).
  35. 35. Hyper Convenience  Mobile Commerce India’s online marketplace Flipkart has started rolling out image search on its mobile app to improve the shopping experience. Instead of typing keywords, users can upload photos of fashion items and find similar products in terms of color, pattern or style inside the Flipkart merchandise database.
  36. 36. Delivery & Shipment • According to Oracle study, globally, 44% of consumers preferred to shop in-store and take items home in 2015. • However, 34% listed buying online and having items delivered home as their favorite way to shop. • The rate of buying goods online and collecting them in- store has doubled from 4%, in 2014, to 8% in 2015. Oracle, “Retail Without Limits”, 2015 Walmart: 2-day shipping
  37. 37. Delivery & Shipment  Home Delivery • Retailers such as Amazon and Walmart are using the same day delivery as a competitive advantage. • Yet, according to A.T. Kearney, most consumers are happy with two-day shipping for “non urgent purchase” (we do wonder, however, what constitutes a “non urgent” purchase). A.T. Kearney 2016 Assessment of Excellence in Retail Operations study • Amazon Prime members in 27 metro areas receive FREE Same- Day Delivery on qualifying orders over $35. Amazon Fresh offers unattended, overnight delivery of groceries.
  38. 38. Delivery & Shipment  Click & Collect • In the UK, almost 20% of shoppers used Click & Collect in 2015. In the US this option is just beginning, with retailers such as Home Depot, Kohl’s, Target and Walmart reporting early success for this platform. According to Home Depot, ‘buy online, pick up in store' and 'buy online, ship to store' are some of the fastest-growing parts of the company’s operation. UK retailer John Lewis offers a variety of delivery options, and utilizes the sister company Waitrose for click & collect. The company reported that click-and- collect overtook home deliveries over the 2014 Christmas sales period, and accounted for more than half (56%) of all their online orders • According to Slice Intelligence (May 2016), Click and Carry still makes up a relatively low percentage of orders, making up 8.5 percent of Target orders and 14 percent of Walmart’s orders. However, Click and Carry orders grew 64 percent Y-O-Y for Target.
  39. 39. Delivery & Shipment  Peer to Peer • Shopify merchants can deliver their products to local customers via Uber Rush for same day delivery. Practical Ecommerce, “Ecommerce Shipping Innovations Just Over Horizon?”, May 2015 • In 2016, Walmart announced it will pilot a delivery service utilizing drivers at Uber, Lyft and Deliv to transport groceries ordered online from its stores direct to customers’ doors. • The customers will pay Walmart its normal $7-10 delivery charge online, and make no payment to the driver. Walmart blog
  40. 40. Best in Class Companies
  41. 41. Best in Class: True Fit • The True Fit Corporation is a promising e-commerce company. Initially a footwear and apparel discovery platform, the tool is now available through thousands retailer brands and growing rapidly. The company had already reached an impressive number of 20 million profiles, and the untapped potential is still huge. • First and foremost, True Fit helps to solve the number 1 problem for apparel and footwear shoppers – “will it fit” – while increasing conversion and lowering return rate, thus increasing satisfaction. • The Kate Spade New York brand has entered into a partnership with True Fit, and experienced an 18% reduction in returns according to George M. Carrara, COO, Kate Spade (Nov 2015). • Guess publicly shared with Business of Fashion that they saw a 250% conversion rate increase for True Fit users.
  42. 42. Best in Class: True Fit • The second reason for our growth prediction for the company, is that it has cleverly managed to leverage the huge amount of data it had accumulated, to support personalization, marketing, merchandising and product development (the Genome tool). • House of Fraser, one of the best-in- class omni-channel retailers today, reported that “True Fit helps drive 6%-8% in net revenue. The data insight is really powerful, and helps us spot gaps and know where to expand the range” (Madeleine Melson, Director of Customer Insights, House of Fraser).
  43. 43. Best in Class: Amazon • Amazon.com strives to be “Earth's most customer-centric company where people can find and discover virtually anything they want to buy online”, growing through acquisitions as well as through digital commerce initiatives. • In 2014, Amazon launched Prime Now in the U.S, later expanding to the UK, offering customers thousands of products like paper towels, shampoo, books, toys, televisions and batteries delivered in an hour or less. • After launching its Amazon Dash reminder / scanner products in 2014, in 2015, Amazon launched its new Dash Button, a pre-set physical Button for product-reordering that Amazon Prime members can place anywhere in their homes. Amazon enhanced the service in 2016 by introducing the Amazon Dash Replenishment Service to automatically reorder everyday essential items and send user notifications.
  44. 44. Best in Class: Amazon • In 2015, Amazon announced “Amazon Home Services”, a marketplace where customers can request repair work and personal lessons from service providers in their area. • The company also launched “Handmade at Amazon”, a new store featuring genuinely handmade items crafted and sold directly from artisans. • To enhance its content marketing, in 2016 Amazon launched its first daily, live show, ”Style Code Live”. The show is dedicated to fashion and beauty, featuring tips from style experts and viewers, looks the audience can shop, and an interactive viewing experience that includes live chat.
  45. 45. Best in Class: Amazon • The Amazon Prime Day 2016 was “biggest day in the history of Amazon.” Customer orders were up by more than 60 percent worldwide, compared with last year’s Prime Day, and up by more than 50 percent in the U.S. Discount included the Dash buttons, offered for $ 0.99 with a $ 4.95 coupon for the first order – a tactic aimed at gaining a foothold in the consumers’ homes.
  46. 46. Best in Class: Jet.com • Jet.com is an online marketplace launched in 2015 in the USA. In 2016, the website reported having 3.6 million users and more than 1,600 sellers, with expected customer spend of almost $1 billion this year. • Jet is based on the promise of better prices. The website relies on best price guarantee, even dropping the $50 membership fee it once proposed would be its sole source of profit. • The strategy is combining “everyday low prices” with a real-time savings engine that makes prices drop as you shop, by adding items with a tag on them (gamification element), opting out of free returns, or paying through debit, not credit.
  47. 47. Best in Class: eBay • eBay launched in 2015 the eBay+ loyalty scheme, offering fast shipping and free deliveries, for €15 – €20 a year. • In 2016, eBay announced at the Goldman Sachs Technology and Media Conference that it is changing into a highly structured marketplace. Changes include improving the site’s search capabilities, new search categories such as “best value,” “brand new” and others, more product reviews and more tools and data for sellers to help improve their businesses. • On the content front, eBay announced a new platform streaming Sotheby's New York auctions live – ebay Sothebys. The platform includes photographs, commentary and audio/ video components.
  48. 48. Best in Class: eBay • In 2016, eBay announced users will have the ability to opt-in to automated Facebook Messenger notifications thanks to a new integration between Facebook and eBay. eBay buyers will receive a Messenger reminder 15 minutes before a listing ends, as well as a Messenger notification if they are outbid in the final 15 minutes of an auction. • The company launched eBay Wine, a new destination to browse collectible, rare and everyday wines based on varietal, region, price point and more
  49. 49. Best in Class: Alibaba • Alibaba Group's, founded in 1999, is the largest online and mobile commerce company in the world in terms of gross merchandise volume. Alibaba Group's major businesses include: – Taobao Marketplace, China's largest online shopping destination – Tmall.com, China's largest third-party platform for brands and retailers – Juhuasuan, China's most popular online group buying marketplace – Alitrip, a leading online travel booking platform – AliExpress, a global online marketplace for consumers to buy directly from China – Alibaba.com, China's largest global online wholesale platform for small businesses – 1688.com, a leading online wholesale marketplace in China – AliCloud, a provider of cloud computing services to businesses and entrepreneurs Selected mobile apps by the Alibaba Group Tmall.com Taobao Alitrip Juhuasuan Alipay 1688
  50. 50. Best in Class: Alibaba • Alibaba Group also announced that its online travel business, Taobao Travel will become an independent business brand named "Alitrip". • Later during the year, Alitrip announced its "Hotel of the Future" strategy, including its "Post Post Pay" service – allowing customers with a high credit rating to reserve hotel rooms through Alitrip without paying a deposit and to enjoy express check-out service. • In 2014, Alibaba Group officially launched Tmall Global as an extension of Tmall.com to enable international brands to offer products directly to consumers in China.
  51. 51. Best in Class: Alibaba • In 2015, Alibaba Group launched "Tmall Vineyard Direct" program, where Tmall works directly with wineries globally, to bring their selection of wines from around the world to the Chinese consumer market. • To kick off the program, the group announced the opening of the Robert Mondavi Wines exclusive flagship store on Tmall.com. • In 2015, Alibaba announced a new service named “Smile to Pay“, allowing consumers to pay for online purchases without entering their password, by simply taking a selfie picture using Alibaba's facial recognition technology Newsweek
  52. 52. Best in Class: Nuts.com • Nuts.com demonstrates how a local, family-owned shop can utilize digital commerce to for growth. The company started operating the domain Nuts.com in 2011, and reported $ 35 million in revenue in 2015, from $ 1.5 million in 2002. • The success of Nuts.com stems from the fact that it’s not just a storefront, or a channel, for the original brick and mortar store. • Instead of being channel-centric, the business is consumer-centric, and uses the digital capabilities to provide new possibilities to shoppers. It also changes its product variety (we assume this is based on data accumulated from previous sales). • Free shipping for orders over a certain sum • Addressing special dietary needs • Supporting shoppers with content Putting consumer reviews in the center, to support decisions; Personal recommendations Offering occasion-based variants – as well as special offers; Digital newsletter delivering offers and news Offering samples at a reduced price, as well as “samplers”; auto-delivery discounts Providing several menus – shopping occasion based (e.g.: gifts, office), product based (e.g.: chocolate, nuts, coffee) and consumer need based (e.g.: gluten-free, organic)
  53. 53. Best in Class: Levi’s • Levi.com has helped to drive growth in Levi’s 2015 sales. And for us, this is not surprising: the iconic brand had been experimenting with different tactics over the last few years, and has finally integrated the most successful tactics into a smooth, rich online shopping experience. The company utilizes personalization, recommendation and online reviews, as well as a loyalty program and newsletter to drive repeat purchasing. The shopper can filter choices by a wide variety of parameters, to personalize the variety Call to action achieved via email, coupons
  54. 54. Best in Class: Levi’s • One of the biggest changes in Levi’s approach, in our opinion, is that it has made content shoppable. This is evident both in its YouTube videos, as well as on the LiveWithLevis website.
  55. 55. Best in Class: Walmart.com • In 2015, Walmart’s investment in e-commerce created an online sales increase of 12%, to $ 13.7 billiona. Still, this represents a slower growth rate compared to previous years – and compared to Amazon’s 20% growth to $ 107 billion. • The company recognizes that e-commerce is an important growth engine, and invested heavily in this field, upgrading its mobile app and investing in the fulfillment of online grocery orders, creating click & collect options. • In December, Walmart announced its own Walmart Pay mobile payment system, and introduced a rival to Amazon Prime called Shipping Pass, offering unlimited 2‫ש‬ -day delivery for $ 49 a year.
  56. 56. Opportunities, Barriers & Retailers Strategies Marketer StrategiesOpportunity / Barrier • Utilizing virtual wallets, mobile payments, bank transfers • new payment technologies are becoming more established • Consumers in many countries do not own a credit card • Reluctance to provide card details Payments • Communicating the security technology / level to the shopper • Utilizing social identities to tailor personal offers and enjoy word of mouth • Emphasizing trial, flexible return policies • Consumers do not trust information and payment data sharing • However, younger consumers do share vast amounts of information with friends and brands to enjoy personal offers Trust • Price comparison aggregators – both by third parties and by retailers • Loyalty schemes – special offers and discounts • Best price guarantees aimed at building trust • Bids and “just for you” / “limited time” offers to drive impulse buying • Better prices are one of the most prominent reasons for shoppers to go online • The ability to compare prices makes it easier to support price-based decisions Prices Source: Schieber Research, 2016
  57. 57. Opportunities, Barriers & Retailers Strategies Marketer StrategiesOpportunity / Barrier • Mobile commerce and social commerce • QR-Codes and Virtual Stores enable shoppers to shop on the go • Pure-play online retailers have been opening physical stores • Leveraging showrooming – retailers trim stores for in store digital purchase • While online retailing assures hyper convenience, consumers seek anytime/anywhere experiences where online-only may not suffice. Pure-Play / Omnichannel • Consumer reviews and recommendations provide assurance, as well as “real life” people demonstrations and influencer reviews • New tactics such as trials and rentals are taking advantage of the digital platform, surpassing physical retailers • Consumers prefer to touch the products and try them before they buy them. This is a main barrier to online-only retailing. Product Experience • Chats and multi-channel assistance (via phone as well as web and video) • To replace store representatives, advisors and stylists are made available, as well as bundling completing products • Using VR and AR for demonstration • A flesh and blood person may answer shoppers’ questions more easily, thus eliminating frustration and leading to a bigger sale. Live Assistance Source: Schieber Research, 2016
  58. 58. Thank You! The research was conducted by: Hamutal Schieber Schieber Research | Market Research & Competitive Intelligence www.researchci.com | hamutal@researchci.com Executive Summary. For the full research - please contact Carmelon Digital Marketing http://www.carmelon-digital.com

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