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Organizational Development and eCommerce - Dave Yakar - IDC Herzliya

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Guest Lecture for the OBD English class
Arison School OF Business, IDC Herzliya
Guest Lecturer: Dave Yakar
eCommerce and Online Global Marketing consultant

Published in: Retail
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Organizational Development and eCommerce - Dave Yakar - IDC Herzliya

  1. 1. Organizational Development and eCommerce Guest Lecture for the OBD English class Arison School OF Business, IDC Herzliya Guest Lecturer: Dave Yakar eCommerce and Online Global Marketing consultant Contact Information on the last slide
  2. 2. Today‟s Subjects 1. The Rise Of eCommerce 2. The opportunities in eCommerce for Israeli organizations 3. eCommerce Consultation for Organizations
  3. 3. 1. The Rise Of eCommerce 1. Israeli Entrepreneurship in eCommerce Channel 2. Trends In The World Of eCommerce 3. The Israeli Consumer and Online Shopping
  4. 4. (Israeli) Diamonds are a girl‟s best friend Israeli Entrepreneurship in eCommerce Channel
  5. 5. (Israeli) Diamonds are a girl‟s best friend Flourishing trade in The Diamonds Exchange Center Israeli Entrepreneurship in eCommerce Channel
  6. 6. Jewish Jewelry and Judaica Israeli Entrepreneurship in eCommerce Channel
  7. 7. From Bnei Brak With Love Prescription Glasses Online Israeli Entrepreneurship in eCommerce Channel
  8. 8. Namefully - Name Jewelry It started as a small business, today there is an arrangement with the Israeli Post, a truck comes specially every day to pick up the packages Israeli Entrepreneurship in eCommerce Channel
  9. 9. Tactical Gear Israeli Entrepreneurship in eCommerce Channel
  10. 10. Gas Masks On ebay Family Deals Available Israeli Entrepreneurship in eCommerce Channel
  11. 11. Rising demand for workers in the field Today: 20 Ads in the context of eCommerce Israeli Entrepreneurship in eCommerce Channel
  12. 12. Small businesses eCommerce in Israel Thrives Israeli Entrepreneurship in eCommerce Channel
  13. 13. But What About Retail Chains? "Any company, old or new, that does not see this technology as important as breathing could be on its last breath.“ Jack Welch (US former CEO and chairman of General Electric 1981-2001 about eCommerce) Israeli Entrepreneurship in eCommerce Channel
  14. 14. 1. The Rise Of eCommerce 1. Israeli Entrepreneurship in eCommerce Channel 2. Trends In The World Of eCommerce 3. The Israeli Consumer and Online Shopping
  15. 15. Creativity In Product Illustration How many cards are in your wallet? wallet-your-bellroy.com/slimhttp:// Trends In The World Of eCommerce
  16. 16. Creativity In Product Illustration 360 degrees product photography /0088508540002011-sandal-heel-high-up-lace-http://www.dunelondon.com/morgan Trends In The World Of eCommerce
  17. 17. Mobile vs. In-Store Mobile phone becomes an integral part of In-Store shopping Trends In The World Of eCommerce
  18. 18. Mobile vs. In-Store Threat for retailers: a quarter of mall shoppers in the US on Christmas 2014 say they made purchases with mobile phones while waiting in lines Trends In The World Of eCommerce
  19. 19. It‟s all about the customer "We believe that customer service shouldn't be just a department; it should be the entire company.“ Tony Hsieh (CEO Zappos.com) Trends In The World Of eCommerce
  20. 20. Alibaba Group (AliExpress) „Singles Day‟ sales top $9.3 billion in 24 hours, bigger than Black Friday Trends In The World Of eCommerce
  21. 21. 1. The Rise Of eCommerce 1. Israeli Entrepreneurship in eCommerce Channel 2. Trends In The World Of eCommerce 3. The Israeli Consumer and Online Shopping
  22. 22. Israelis shop online, and a lot Estimated market of ILS 5 Billion per year The Israeli Consumer and Online Shopping
  23. 23. The threat to Israeli Brick And Mortar retailers “By 2022, brick and mortar retail spaces will be little more than showrooms.” Eddie Machaalani & Mitchell Harper (Co-CEOs of Bigcommerce) The Israeli Consumer and Online Shopping
  24. 24. Threat: Or maybe brick and mortar retail spaces are a little more than showrooms today -An article explaining how Israeli shoppers use retail store for size measurement and than buy the product online from abroad The Israeli Consumer and Online Shopping
  25. 25. Would prefer to buy from online from local businesses, but wouldn‟t compromise on poor User Experience The Israeli Consumer and Online Shopping
  26. 26. Threat for local retailers: 60% of the Israelis‟ online shopping are Cross Border. A large share of the online retail market The Israeli Consumer and Online Shopping
  27. 27. Top sites in Israel Right after Facebook and News – ebay, AliExpress and Amazon The Israeli Consumer and Online Shopping
  28. 28. Lets go back to Singles Day Sale on AliExpress The Israeli Consumer and Online Shopping
  29. 29. The company published the list top 11 buyer countries ranked by GMV Israel was third, right after Russia and Brazil The Israeli Consumer and Online Shopping
  30. 30. The Israeli Consumer and Online Shopping
  31. 31. First in GMV: Russia Population: 146 Million The Israeli Consumer and Online Shopping
  32. 32. Second in GMV: Brazil Population: 200 Million The Israeli Consumer and Online Shopping
  33. 33. Third in GMV: Israel Million???8Population: The Israeli Consumer and Online Shopping
  34. 34. A threat to Israeli retailers The Chinese are coming!! The Israeli Consumer and Online Shopping
  35. 35. And it looks like they have secret weapon The Israeli Consumer and Online Shopping
  36. 36. Wait one moment! There is high Demand: The Israeli consumer shops online and would prefer buying from local retailers There is enough Supply: Local retailers offer more than enough goods tailored to the Israeli taste There‟s an Economic Vacuum, the local consumer‟s choice to shop Cross Border when all the goods are available in the local market is an Economic Distortion The Israeli Consumer and Online Shopping
  37. 37. Why are the Israeli retailers sleeping while on duty? The Israeli Consumer and Online Shopping
  38. 38. Summary - The Rise Of eCommerce:  Small Israeli businesses are thriving in eCommerce sales channel to the global market  The Israeli consumer shops online... and a lot!  With the rise of eCommerce comes a critical threat on a significant share of the online (and offline) market
  39. 39. 2. The opportunities in eCommerce for Israeli organizations 1. The Opportunities in the local market 2. The Opportunities in the global market
  40. 40. Bricks and Clicks Synergy: Integration between the store chain to the online shop Opportunities in the local market
  41. 41. A completing channel for the store chain channel For customers in areas where there is no store Opportunities in the local market
  42. 42. Online catalog, new arrivals updates Anything that would bring the customers to the stores Opportunities in the local market
  43. 43. “Innovation distinguishes between a leader and a follower” Steve Jobs (1955-2011)
  44. 44. Rare opportunity to lead the market and differentiate the brand Opportunities in the local market
  45. 45. Opportunity to take a bite of the Cross Border competitor‟s market share, 60% of total online spending Opportunities in the local market
  46. 46. 2. The opportunities in eCommerce for Israeli organizations 1. The Opportunities in the local market 2. The Opportunities in the global market
  47. 47. A new Marketing Channel Endless markets in the global arena Opportunities in the global market
  48. 48. Global traders benefit of 18% Sales Tax exemptions for export shipments Opportunities in the global market
  49. 49. Taxes benefit for exporters of Israeli goods significantly lower dividend tax Opportunities in the global market
  50. 50. Taking advantage of free trade agreements such as Mercosur Agreement Opportunities in the global market
  51. 51. Argentina USA Usage of different brand name in other markets for many reasons Opportunities in the global market
  52. 52. Dumping – discriminatory pricing Opportunities in the global market
  53. 53. Bargaining power as a buyer Opportunities in the global market
  54. 54. Forward integration – expand activities to include control of the direct distribution of the market Becoming a retailer instead of wholesaler Opportunities in the global market
  55. 55. The perfect solution for seasonal product categories Australia and New Zealand: Coats in the summer, swimwear in the winter Opportunities in the global market
  56. 56. So why retailers are not doing anything about it?? Opportunities in the global market
  57. 57. 3. eCommerce Consultation for organizations 1. The organizational challenge 2. Awakening demand for consultation 3. Business models
  58. 58. “It is not the strongest or the most intelligent who will survive but those who can best manage change.” Charles Robert Darwin (1809-1882)
  59. 59. Considering the initiative as branch # 155, another store eCommerce activity has completely different set of needs and requires focus as a separate independent channel The organizational challenge
  60. 60. Today‟s Status: many companies in recent years been burnt in an attempt to set up eCommerce activity by suppliers without sufficient knowledge I will build you a website... For only $100,000 The organizational challenge
  61. 61. A website is not a solution, without formulating clear vision and strategy funds will be invested on an online venture and the project will fail The organizational challenge
  62. 62. Many retailers are afraid of losing the current physical advantage in a new channel (and beginning) The organizational challenge
  63. 63. Inflexibility of organizations in containing new ventures Formal organization built many complex processes and may act as a barrier to effective entrepreneurial activity The organizational challenge
  64. 64. eCommerce venture - a new realm of high technology marketing and is not a part of the core activity of the firm The organizational challenge
  65. 65. Technology Implementation of knowledge and many processes along with a shortage of qualified suppliers in the domestic market The organizational challenge
  66. 66. Lack of knowledge in product management in international markets Conversion of thousands of products to different languages The organizational challenge
  67. 67. Lack of Go To Market Strategy Lack of global marketing experience Loss of brand value in a foreign environment The organizational challenge
  68. 68. A fear of cannibalization Damage to traditional retail activities The organizational challenge
  69. 69. Low customer service awareness in Israel comparing to the world The heart of eCommerce activity is customer experience The organizational challenge
  70. 70. eCommerce project is a cross-organizational The challenge is cooperation of senior management in favor of changing the perception of the organization from top to bottom The organizational challenge
  71. 71. At first no manager in the organization would want to adopt the new kid The organizational challenge
  72. 72. After the first 100K all managers will seize the opportunity The organizational challenge
  73. 73. This will be the CIO‟s reaction after understanding the necessary integration with the ERP system The organizational challenge
  74. 74. And this is the CMO after hearing the extreme change in the marketing strategy The organizational challenge
  75. 75. And the CFO when he found out about the need for bank accounts in Japan and the US The organizational challenge
  76. 76. And the COO‟s response to the need of a dedicated warehouse and shipping within 24 hours The organizational challenge
  77. 77. And the this is how the consultant will feel The organizational challenge
  78. 78. And all this with the difficulty of proving the ROI When the venture didn‟t show a first shekel in sales The organizational challenge
  79. 79. 3. eCommerce Consultation for organizations 1. The organizational challenge 2. Awakening demand for consultation 3. Business models
  80. 80. Today‟s status: re-awakaning of demand for consultation Many companies assigned budgets for eCommerce and it looks like organizations are willing to invest on „Round Two‟ Awakening demand for consultation
  81. 81. Many companies are turning to recruitment in the field but there is a shortage of experienced managers Awakening demand for consultation
  82. 82. Organizations understand and feel the threat from cross border competitors and the need to align to today‟s market requirements Awakening demand for consultation
  83. 83. There is an understanding that the nature of eCommerce is not a site, it is a vision and strategy and these activities require professional consultancy in setting up the project Awakening demand for consultation
  84. 84. 3. eCommerce Consultation for organizations 1. The organizational challenge 2. Awakening demand for consultation 3. Business models
  85. 85. In-House model Establishment of eCommerce SBU within the organization Business models
  86. 86. In-House model Starting points of the organizations who choose this model:  Refresh the existing online presence strategy of the organization  An organization that wants the ability to manage the brand presence across all channels  Improving and refreshing an existing eCommerce business unit  An organization with a vision and strategy for the online channel  An organization with a centralized nature Business models
  87. 87. In-House model Abilities and functions involved in this model:  Cross organizational project  Needs to be sponsored by one of the senior ranks or by the CEO  Support most or all of the functions in the organization (as noted in previous chapters)  Online marketing vision and strategy development  Implementation of technological knowledge in the organization  Rewriting of many processes  Recruitment and building the eCommerce unit in the organization Business models
  88. 88. “An important re-engineering principle is that companies should focus on their core competence and outsource everything else.” Bill Gates Outsource model Cooperation with a company that specializes in eCommerce Business models
  89. 89. Outsource model Reasons for choosing this model:  Professionalism  Quick launch and GTM  Each party is measurable and maximizes its capabilities  Different needs in moving the project away of the organization  Minimum investment  Strategy: First step is outsource and the next step will be implementation of capabilities within the organization Business models
  90. 90.  In this model there is a minimal dependence on the organization‟s capabilities  IT level: There is a need for integration to the corporate‟s ERP  Product and service level: SLA development for the online channel, inventory availability, quality control, deliveries within 24 hours of orders and implementation of many other processes Outsource model Abilities and functions involved in this model: Business models
  91. 91. Back to Back Wholesaler model Selling to online retailers The organization as a wholesaler Online retailerOnline retailerOnline retailer Consumers Business models
  92. 92. Wholesaler model Reasons for choosing this model: The lack of eCommerce strategy Minimal investment and risk A decision to stay as a retailer in the local market and operate on a B2B model in other markets Strategy: Learning the market at the expense of other retailers Business models
  93. 93.  IT level: Integration to the corporate‟s ERP  Product and service level: SLA development for the online channel, inventory availability, quality control, deliveries within 24 hours of orders and implementation of many other processes  Sales and marketing level: development of a sales unit specializing in acquisition of retailers as clients  On development level: Website, lead generation system and other technological solutions Wholesaler model Abilities and functions involved in this model: Business models
  94. 94. Thank you
  95. 95. Open Door Policy Dave Yakar Linkedin: linkedin.com/in/daveyakar Facebook: facebook.com/dave.yakar email :Dave.Yakar@Gmail.com Skype: dave.yakar.ecommerce Phone: 052-5744444

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