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- 1. Beyond the Click: Debunking the Myth of Drones Presented By Jeff Ritacco
- 3. Old paradigm: multichannel commerce Stores Call Center Direct Mobile
- 4. New paradigm: connected commerce Stores Call Center Direct Mobile Ship from Store Intelligent Commerce Care In-Store Pickup Personalization Regional Fulfillment Cross Border Trade Systems Integration Returns
- 5. HOW DOES EBAY ENTERPRISE FIT INTO THE PUZZLE?
- 6. eBay Enterprise enables connected consumer experiences Global market reach Demand generation with high ROI Fast delivery Compelling experiences on any device Relevant, personalized content and offers Brick and mortar selling and fulfillment
- 7. A comprehensive and modular SOLUTION SUITE
- 8. Our scale brings significant value to our clients Connected marketing solutions driving 13:1 higher marketing ROI Most competitive cut-offs times during 2013 holiday season, beating Amazon and other leading retailers & brands 90% of orders shipped same day Tight integration with stores driving 2-5% incremental chain-wide sales growth 85% of orders delivered in 3 days Integrated commerce technologies with lower cost of ownership
- 9. eBay Enterprise Clients – A Growing Network of Leading Brands and Retailers
- 10. FULFILLMENT
- 11. FULFILLMENT & TRANSPORTATION CUSTOMER SERVICE eBay Enterprise Omnichannel Operations
- 12. Fulfillment center locations SF = effective facility square footage UK SWITZ. SPAIN NETH. LUX. FRANCE BEL. AUSTRIA PORTUGAL ONTARIO VA KY NV CHINA Mississauga, Ontario 150,000 SF Louisville, KY (Three Facilities) 1,477,000 SF Shepherdsville, KY 784,000 SF Martinsville, VA (Four Facilities) 1,118,000 SF (15K SF Freezer) McCarran, NV 500,000 SF Shenzhen, China (Fireswirl – Partner) 16,000 SF Erfurt, Germany (FIEGE – Partner) 900,000 SF Ibbenbüren, Germany (FIEGE – Partner) 900,000 SF Manchester, UK 220,000 SF Milan, Italy (FIEGE – Partner) 250,000 SF Paris, France (FIEGE – Partner) 65,000 SF Richwood, KY (Three Facilities) 2,075,000 SF ITALY GERMANY
- 13. • Inbound receiving and logistics • Order processing and inventory control • Warehouse management system • Freight management solutions • ShipQuik and Boost programs to optimize shipping • Value added service – Personalization – Custom, branded packaging – Gifting – Custom assembly • Reverse logistics • International shipping Fulfillment capabilities receiving SLA 24hr Market Leading Speed and Quality order accuracy 99.7% same day shipping 90%
- 14. Providing scale and flexibility shipped units in 2013 161M shipped units Q4 2013 58M shipped packages in 2013 37M peak day shipped units 2013 1.4M
- 15. 0 100000 200000 300000 400000 500000 600000 700000 Average Semi-annual Sale Peak 2013 0 20000 40000 60000 80000 100000 120000 140000 160000 Average Peak Fulfillment Scalability Beauty products retailer Units/day Gifting retailer Units/week
- 17. Value-added services provide a “made for me” customer experience that enhances client brands • Branded custom packaging • Fragile packaging • Custom Insertions • Samples • Scores of options available Packaging • Laser engraving • Monogramming • Embroidery • Embossing • Heat transfer Personalization • Special finishing (shrink wrapping) • Kitting/bundling • Steaming and pressing • Refurbishment, Re- carton, re-label • Custom blend foundation • Wedding favors Custom Assembly • Custom presentations • Gift wrapping • Gift boxes • Gift cards/receipts • Unique messaging • Special materials • Custom ribbons Gifting
- 18. TRANSPORTATION
- 19. Shipquik drives speed of delivery • Freight program to direct line haul packages to local UPS Hubs • Improved transit time • Lower rates to clients and consumers • Faster delivery to the consumer • Improved consumer tracking
- 20. Customer Selects 2 Day Customer Zip Code 2 Day GRD 2 Day Air Customer Selects GRD Customer Zip Code 3 Days Std GRD 3 Day Air Ground Logic 2 Day Logic Boost Optimizes Shipping Options
- 21. Iship for international shipping & expansion • Capture international market share with low cost express international shipping service • 60 countries included spanning Europe, Asia and South America • iShip DDP – Landed and freight costs collected at checkout on web store – Customer pays zero at delivery enhancing the consumer experience • iShip DDU: landed and freight costs collected by carrier on delivery
- 22. Returns, Speed and Flexibility • Prepaid return label included on packslip • Consumer choice of dropping off at USPS or UPS • Immediate tracking visibility on UPS.com • Reduced freight cost • Retailer defined business rules for return labels and consumer costs Customer to UPS / USPS UPS pickup from USPS UPS ships to eBay Enterprise eBay Enterprise processes return UPS Total transit time is 2-6 days
- 24. Store-Based fulfillment IN-STORE PICKUP Increase sales, store traffic and enable consumer convenience with same day pickup SHIP FROM STORE Increase revenue, margin and inventory turns by exposing store inventory to the web and captures lost sales SHIP TO STORE Enable consumer convenience and drive store traffic
- 25. Store based fulfillment results 20-40% Average increase in incremental ecommerce revenue 33% Average percent of items shipped are inactive 30%+ Margin increase on items nearing markdown 80%+ 1 day transit time, 96% 2 day
- 26. Ship from store saves sales • Consumer Benefits – Expanded product assortment – Few “out of stock” / “back order” scenarios – Fast delivery • Retailer Value – 10-40% incremental ecommerce revenue – Increase inventory sell through – Decrease markdowns – Optimize store assets and labor shop competitors when only 1 item is out of stock *43% limit future shopping * 40% would purchase other items if retailer secured out of stock item* 59% *Source: Cross-Channel Brand Interaction: 2012 Consumer Preferences; Demandware and Sterling We want to offer our customers universal inventory availability which is central to our omnichannel mantra ‘any shoe, anywhere, anytime.’ Deploying ship from store will be a major milestone in making this mantra a reality. Roger Rawlins, SVP of Ecommerce, DSW eBay Enterprise Press Release “ “
- 27. DRONES
- 28. So what about drones? • Not reality in the near future – A media GIMMICK to get Amazon’s names out there prior to Christmas Peak 2013 – Put Amazon in the news • What is the future? – eBay Enterprise’s comprehensive & modular solution suite – Omnichannel Fulfillment – Same Day Delivery – 7 days a week delivery Delivery Drones Grounded by F.A.A.
- 29. QUESTIONS
- 30. THANK YOU!
Editor's Notes
- Let’s start with the old paradigm of the multichannel commerce model. Retailers use to rely on 4 separate channels to sell their products and services: Brick & Mortar Stores, the internet direct through a website and/or a mobile device and finally taking orders in a call center. These were effective for a time, but as technology and social expectations continued to evolve, the paradigm evolved.
- The line between traditional retail and ecommerce blurred and has now disappeared. It's no longer ecommerce, it's just commerce. Consumers are one step ahead of retailers. They have already assimilated the web, smartphones, tablets, 3rd party apps, location-based services and social technologies into their shopping journeys. How many of you do research on line before purchasing in a store? In fact, 84% prefer combination in-store and online experience. 71% want associate to check other stores and ship direct. 43% like to buy online and pick up in-store 63% prefer to buy online but return in-store The Era of Me Commerce - Demand personalized, localized and engaging experiences. They want to shop when they want, where they want, how they want, and delivered wherever they want as quickly as possible. Multichannel customers generate 21% more value than single-channel customers
- Retailers and Brands need help to compete. We deliver these connected consumer experiences across all touch points of the purchase lifecycle by engaging potential customers, converting browsers into buyers and delivering products with speed and quality. This cycle is the way we view the modern “funnel” and it’s how we’ve structured our company to service it.
- So we’ve established 4 pillars to support strategy: Marketing Solutions – The result of integrating nine marketing product and agency services companies in to one group offering a wide range of services and tools. Commerce Technologies – Web design and dynamic maintenance Retail Order Mgmt – Intelligent order routing, omnichannel inventory management (Visibility), payments processing, fraud management, and reporting. Operations - Customer Service, Fulfillment and Transportation Comprehensive end-to-end provider, with the ability to offer modular solutions. A client can take advantage of our expertise in one or all of these areas.
- On top of the suite of solutions, our scale brings significant value to our clients. Shared technology offers lower cost of ownership Store inventory visibility and fulfillment offers incremental sales growth Innovated and data driven Marketing solutions produce greater results Extended cut-off times and shipping speed enhance the customer’s experience
- Over 500 clients are using any number of solutions. From a fulfillment perspective we are servicing almost 60 clients.
- Let me now focus on the fulfillment and transportation components of our modular suite.
- It starts with a strong presence across the world. Partners in China and most of Europe provide overseas support and six eBay Enterprise sites support North America. The North American sites encompass over 6.5m effective square feet. Call out Reno, NV operation…. This is a regional fulfillment, specifically servicing the west coast. Clients have split their inventories between this site and an east coast site. They do this to take advantage of the next day service to 6 western states, reduced freight costs and operational redundancy for out-of-stock and disaster recovery situations.
- State of the art operational capabilities provide market leading speed and quality. - Advance ship notice technology allows for 24 hour receiving SLA - Tight controls utilizing RF scanning and soon to be implemented voice technology ensures consistent order accuracy and inventory controls - Flexible WMS and material handling technology supports various types of processing: batch and order picking sorter and put-to-light technology, auto-bagging auto dunnage disbursement print and apply shipping label systems All of these and solid operational coordination provides 90% same day shipping for our clients.
- The result is scale and flexibility, shipping over 161m units last year, of which 58m were done in the 4th quarter, and 1.4m in one day during Peak.
- Some of our clients have dramatic variability in volume due to promotions and during peak…. and……
- ….. And Peak requires a significant ramp up of seasonal employees to handle the volumes.
- Value added services are extremely important to our clients, emphasizing their brand and providing a unique customer experience: Packaging can be as simple as a bag or a box with some brown paper or air pillows for fill to branded corrugate, carton lined tissue, sticker and pack slip. Gift wrap, including unique gift messaging and specialized wraps and bows ties, has become a promotional add-on like free shipping. Personalization is growing. Our French Toast client requires 29 monogramming machines to support their thriving school uniform business.
- Getting it out the door is important, but you still have to get it there, so time in transit is also a focal area. While we have a great partnership with UPS, their network has opportunities. So we actually run direct line hauls by-passing some of the UPS hubs to reduce transit times. Examples are Louisville to Chicago, Newark, Dallas, LA and SF. Results = 2.4 days average transit time
- A unique transportation option is our Boost program. The program automatically upgrades orders based on zip codes and transit times to ensure delivery prior to holiday. The program minimizes freight costs by upgrading only those orders that need it and drives incremental sales for the client.
- Clients are expanding their markets by taking advantage of our international shipping program. The Iship DDP option offers an enhanced customer experience by collecting the landed and freight cost at the time of checkout.
- We are finding that returns are an often overlooked opportunity with the customer. Customers are looking for a hassle free process and quick re-imbursement of their money. It starts with a prepaid return label, a choice of how to return it, and a 24 hours processing SLA once it is received. This includes a lower freight cost for the clients that offer free returns.
- To round out the fulfillment process, we want to look at store-based fulfillment.
- The foundation for this approach is the availability of the retailers’ complete inventory (stores and fulfillment sites) to the web and then utilizing intelligent order routing to optimize the fulfillment source based on an array of criteria. Let me give you a couple of examples: A customer comes into a store looking for a unique shoe size, but it is out-of-stock. Rather than loosing the customer, the sales associate can view all store and fulfillment inventories and then offer the customer the option to pick the shoes up at a nearby store or have them shipped to their home or the store they are in. The retailer has some pockets of excess inventory of a seasonal blouse in their store network. The blouse will eventually need to be marked down. But with store-based fulfillment, the retailer can direct web orders to those stores with the excess inventory, minimizing the markdown exposure for the item. One caution with store-based fulfillment is that it doesn’t replace centralized fulfillment. That is because stores are not setup to handle significant volume. Processing space in a retail store is limited and expensive and staffing can be inefficient and costly to maintain.
- Retailers utilizing store based fulfillment are seeing excellent results, driving incremental sales and avoiding or minimizing markdowns. Customers are getting what they want and enjoying fast delivery times.
- Customers are definitely responding to ship from store functionality, helping retailers save sales. Customers are telling us that they will shop competitors when only 1 item is out of stock and limit future shopping. So this fulfillment option is definitely making a difference for our clients.
- Ok, I’ve worked through almost my whole presentation and haven’t mentioned a thing about drones. To come clean, I did use it to beef up the title of my session to spark some interest. So what about drones…… The logistical and legal challenges make them little more than a pipe dream for the moment. Truly out-of-the box thinking and visionary by Jeff Bezos. It was definitely an effective marketing ploy. Let’s talk about the future….. First, connected commerce is here to stay and it is going to continue to grow. We see eBay Enterprise’s comprehensive and modular solution suites providing all the tools and services to keep up with it and help our client compete and flourish. Secondly, once that click of the mouse occurs to purchase an item, Fulfillment and Transportation become the last link in offering a seamless experience for the customer. Consistent quality execution and speed become an important selling point for the customer to return. Our Omnichannel Fulfillment Services provide that. Finally, Same day delivery and 7 days a week delivery are on their way. Our Transportation group is already looking at options to ensure we stay competitive and offer options are clients and their customers will want.