JDA Innovation Forum: Seamless Omnichannel Campaigns Revenue Model

1. Profit Distribution in Omni-Channel Retail. Milan, 30 May 2013

3. Copyright © 2013 Accenture All rights reserved. 3 An end-to-end service unique offering Strategy Consulting Process Consulting Technology Consulting Process & System Implementation Infrastructure Operations Application Operations Business Process Operations Accenture As Business Innovation Partner Strategy Consulting Management Consulting IT-Consulting Strategy Process Information Technology Management of Business Processes Comprehensive Know-how through experts and projects across the e2e value chain High implementation complexity through IT and project management Know-How Change Management

4. Copyright © 2013 Accenture All rights reserved. 4 Introducing Accenture Interactive the e-commerce CoE India Delivery Centers Consumer Goods (Hyderabad) Technology Labs Bangalore, India Operations (Madrid ISC) CRM, S&M, BI, Planning (Milan ISC) ACIN Chicago ACIN Sao Paulo Accenture Interactive e-Commerce Centre of Excellence Milan Philippine Delivery Center (Manila) Supply Chain (Barcelona ISC) Technology Labs San Josè, California Technology Labs Chicago, Illinois High Performance Business Showcase Murray Hill, New Jersey London, UK Technology Labs Sophia Antipolis SAP Retail (Bilbao) Delivery Center (Napoli) Value Led ERP (Bangalore) Oracle Retail (Lodz) Accenture Customer Innovation Network Accenture’s global network of CG&S Industry Solution Centers Global Delivery Network Accenture Tecnology Labs Technology Labs Beijing, China BI, ERP, Agri (Chicago, ISC)

6. Copyright © 2013 Accenture All rights reserved. 6 Online On the go In stores In touch with social media networks • Customer journey became dynamic, accessible and continuous. Now it is Non-Stop. • Customers are no longer enter a channel. Instead, they are continuously in the channel. • Thus customer’s focal point is not anymore purchase but evaluation and interaction. New customer is now always connected

7. Copyright © 2013 Accenture All rights reserved. 7 SEARCH Natural Search, SEO Paid Search, SEM Search Capability Landing Page Optimisation iMEDIA Standard Display Ads Rich Media Ads Broadband Video Web TV WEB SITE Branded Sites Affiliate Site Promotional Site Usability & Accessibility Analytics, Web Site Optimisation PARTNERSHIPS Content Syndication Comparison Sites, Shopping Directories Sponsorships, Co-branding Philanthropic Cause Marketing E-COMMERCE Direct to Consumer Where to Buy Functionality Branded Storefront Sell Direct on Third-Party Site Technical Platform MOBILE Mobile Browser Mobile Aps QR Codes, GPS RFID POS Text Messaging CRM Loyalty Platform Behavioral Targeting & Acquisition Cross-sell Engine Retention & WinBack Campaigns, Email, Reporting SOCIAL Online Video Communities, Answer Forums Word-of-mouth, Buzz, Referrals Wikis, blogs, Crowd Sourcing Product Innovation Multichannel Customer Journey DIGITAL CAPABILITIES TO LEVERAGE OFFLINE FOUNDATION AWARENESS ADVOCACY PURCHASE CONSIDERATION LOYALTY ONLINE Identification of Need Search for Solution Evaluate Alternatives Product Details Visit to the store Purchase Decision Visit to the brand website Compare Offers Online Purchase Social Interaction Online Registration Mobile App Offline Purchase 19% 81%Time Spent Customer is exploring multi-channel experience

8. Copyright © 2013 Accenture All rights reserved. 8 • Digital customer is using the SOcial LOcal MObile interaction on daily base • In-store price comparison, rating- &-review and gamification influence purchase decision and drive additional customer • There are new features to map the malls (even floors) to drive the customer to theirs preferred store. Driving traffic to store with digital and SO.LO.MO.

12. Copyright © 2013 Accenture All rights reserved. 12 ONLINE Single shopping mission across channels • The retailing experience is evolving from Multi-channel to Omni-channel • Distinct sales channels are giving way to a single, all- encompassing business model • The customer experience could begin and end everywhere • Omni-channel approach builds seamless operations for a consistent experience

15. Copyright © 2013 Accenture All rights reserved. 15 Store format is evolving in shopping environment • Stores role is changing since the customer is being connected 24/7 • Enhancing the experience from self-service to assisted service • Various channels in store to purchase from handing a simple, written shopping list to sales assistants to shopping online within the store. • Reinforcing brand’s appeal exposing brand relevant added content Customer places order online Customer notified of order status Order is delivered to the store Customer collects order at store

18. Copyright © 2013 Accenture All rights reserved. 18 Shop assistant interact with Tablet Customer receive order at home Customer Collects the order in store Customer track the order with Smartphone • Empower store associates • Real-time order fulfillment and flexible returns • There is an increased collaboration with operations across channels • Rethink store processes, reconsider talent and manage labor differently. Store format is evolving in shopping environment

21. Copyright © 2013 Accenture All rights reserved. 21 The evolution of the elastic supply chain • Make visibility and dynamic fulfillment mandatory • Emphasize returns management providing non-stop customer’s path to return is just as fluid as the path to purchase • The management of inventory should be done forward, backward and sideways, in order to have the best flexibility in the supply chain

23. Copyright © 2013 Accenture All rights reserved. 23 Enhancement of customer experience on 360° Customer experience teams could be located within marketing and influence merchants from there Customer experience team could be fully embedded in merchandising with an equal voice at the table Separate customer experience function with individual team members matrixed into each merchant buying Team • Infuse Merchandising with customer advocacy • Customer insight group embedded with Merchandising to incorporate insights at the point and place of decision – eliminate “insight islands” • Trade product centricity offering the right price, assortment, promotion, AND customer experience

33. Copyright © 2013 Accenture All rights reserved. 33 Business strategy transformation in Omnichannel scenario How to sell more and more to our customers? Which processes do we have to implement to increase our customer spending? How we can verify the success of our online sales strategy?

35. Copyright © 2013 Accenture All rights reserved. 35 KPI Target Actions Business strategy transformation in Omnichannel scenario •Acquisition •Re-activation •Viralization Click-through rate? Visits volume

36. Copyright © 2013 Accenture All rights reserved. 36 KPI Target Actions The solution to E-commerce’s main issues •Offering •Promotions •Delivery •Customer-care Conversion rate? Conversion •Acquisition •Re-activation •Viralization Click-through rate? Visits volume

37. Copyright © 2013 Accenture All rights reserved. 37 The solution to E-commerce’s main issues Actions •Product mix •Category mix •threshold Ticket composition? Profitability •Offering •Promotions •Delivery •Customer-care Conversion rate? Conversion •Acquisition •Re-activation •Viralization Click-through rate? Visits volume

38. Copyright © 2013 Accenture All rights reserved. 38 The solution to E-commerce’s main issues Actions •Product mix •Category mix •threshold Ticket composition? Profitability •Info-commerce •R&C / P&P •In-store-comp. •SO.LO.MO R.O.P.O. rates? Channeling •Offering •Promotions •Delivery •Customer-care Conversion rate? Conversion •Acquisition •Re-activation •Viralization Click-through rate? Visits volume

40. Copyright © 2013 Accenture All rights reserved. 40 Integrating operations for a customer conversation The Enterprise Channel Operations Merchandising Marketing Supply Chain Stores Digital Customer Center Services BusinessFoundation TechnologyFoundation …eliminate channel boundaries • Assortment and Pricing are integrated across channels • Marketing presents a cohesive “brand” for the new non-stop customer experience • Ensure visibility and dynamic fulfillment where inventory is managed at enterprise level

41. Copyright © 2013 Accenture All rights reserved. 41 Omnichannel redefine functions role and platforms Customer Planning Planning Warehouse Warehouse Warehouse Marketing Marketing E-Commerce Store Planishment Till PSP Collect in store Home delivery Each channel is driving the technology and the process definition. E-CommerceHeadquarterStore

42. Copyright © 2013 Accenture All rights reserved. 42 Customer E-CommerceHeadquarterStore Omnichannel redefine functions role and platforms Shared stock WarehousesMarketing E-Commerce Store Planishment Till PSP Collect in store Home delivery Planning Mobile Drop shipment Each channel is driving the technology and the process definition. Omnichannel means integration of objectives, methods and platforms. Omnichannel Shared stock

43. Copyright © 2013 Accenture All rights reserved. 43 Salesvolume «Body» Product variety «Long Tail» Top seller Niche product with higer margin Cross Channel Commercial Model The commercial strategy for an Omnichannel journey • To reach the business objectvies we need to balance: • The top selling product that drive volumes • Niche products that preserve margins • To grant the success of an eCommerce project we need to design a cross-channel strategy to grant: • Turnover • Profitability

44. Copyright © 2013 Accenture All rights reserved. 44 The commercial strategy for an Omnichannel journey Historical Data Offline Benchmark Online Benchmark Market Research Sources Assortment Optimisation Price Optimisation Sales Forecasting Assortment Definition Profitability Analysis Revision of the Sets Price management Rules Base Price and Margins Flexibility Analysis Baseline Normalisation Forecast of the Volumes of the Sales Promotional Uplift Calculation Promo Optimisation Simulation Promotional ROI Definition of the Promotional Tactic Promotional Strength Capabilities Online Search Trend Cross Channel Commercial Model 1 2 3 4 • To reach the business objectvies we need to balance: • The top selling product that drive volumes • Niche products that preserve margins • To grant the success of an eCommerce project we need to design a cross-channel strategy to grant: • Turnover • Profitability

45. Copyright © 2013 Accenture All rights reserved. 45 Digital acquisition strategy • We can influence the visitor volume using different acquisition channels and performance strategies. • The conversion rate is influenced by a mix of commercial and UX elements. • The average ticket is influenced by assortment strategies. • Customer reactivation is strategic

46. Copyright © 2013 Accenture All rights reserved. 46 Digital acquisition strategy in an omnichannel environment • We can influence the visitor volume using different acquisition channels and performance strategies. • The conversion rate is influenced by a mix of commercial and UX elements. • The average ticket is influenced by assortment strategies. • Customer reactivation is strategic Click Through Channeling Traffic Turnover Commercial Levers Transactions Organic Lead Awareness Information Acquisition Customer Thrust User Experience Reactivation Conversion Phisical (store) Digital / Mobile

47. Copyright © 2013 Accenture All rights reserved. 47 A new measurable omnichannel ecosystem • The omnichannel approach, enabled by technological platforms, set with cross- functional process, permit to create more efficient commercial strategy. • The Omnichannel ecosystem will measure the relation between actions (operative cost) and the redemption (returns) singling-out the duly profitability. Channels Store R&C On-line CategoryX CategoryY CategoryZ Unsoldstock Mobile Quality & Service Assortment Price Product Deatil (newest & best) Service (eg: installation) Couponing Pure Player price

48. Copyright © 2013 Accenture All rights reserved. 48 A new measurable omnichannel ecosystem Channels Store R&C On-line CategoryX CategoryY CategoryZ Unsoldstock Mobile Quality & Service Assortment Price Product Deatil (newest & best) Service (eg: installation) Couponing Pure Player price Couponing to drive in stores I L L U S T R A T I V E • The omnichannel approach, enabled by technological platforms, set with cross- functional process, permit to create more efficient commercial strategy. • The Omnichannel ecosystem will measure the relation between actions (operative cost) and the redemption (returns) singling-out the duly profitability.

49. Copyright © 2013 Accenture All rights reserved. 49 A new measurable omnichannel ecosystem Channels Store R&C On-line CategoryX CategoryY CategoryZ Unsoldstock Mobile Quality & Service Assortment Price Product Deatil (newest & best) Service (eg: installation) Couponing Pure Player price Outlet on-line • The omnichannel approach, enabled by technological platforms, set with cross- functional process, permit to create more efficient commercial strategy. • The Omnichannel ecosystem will measure the relation between actions (operative cost) and the redemption (returns) singling-out the duly profitability. I L L U S T R A T I V E

50. Copyright © 2013 Accenture All rights reserved. 50 Leverage on commercial communication synergy 2 weeks 2 weeks 2 weeks Communication effectiveness through flyer Communicationd efffectiveness in tegrating flyer and one-to-one push (DEM+SMS)    • In an Omnichannel environment retailer could use a different approach to improve the declining performance of the traditional strategies. • Digital marketing mix will influence all the target: customer traffic, conversion, and profitability driving customer through the different channels in a measurable way. Flyer Flyer Flyer I L L U S T R A T I V E

51. Copyright © 2013 Accenture All rights reserved. 51 Leverage on commercial communication synergy 2 weeks 2 weeks 2 weeks Communication effectiveness through flyer Communicationd efffectiveness in tegrating flyer and one-to-one push (DEM+SMS) PUSH ACTIVITIES Mobile Digital PUSH ACTIVITIES Mobile Digital PUSH ACTIVITIES Mobile Digital    Flyer Flyer Flyer I L L U S T R A T I V E • In an Omnichannel environment retailer could use a different approach to improve the declining performance of the traditional strategies. • Digital marketing mix will influence all the target: customer traffic, conversion, and profitability driving customer through the different channels in a measurable way.

53. Copyright © 2013 Accenture All rights reserved. 53 The next five action to became seamless 1. Omnichannel is not rocket science 2. Acknowledge the burning platform 3. Define customer experiences strategy 4. Identify digital and physical relations 5. Create a new measurable ecosystem

54. Copyright © 2013 Accenture All rights reserved. 54 Thank you ! Federico Gasparotto Digital Marketing Offering Lead Accenture Interactive Tel: +39-331-7550490 @: federico.gasparotto@accenute.com Blog: www.gasparotto.biz IM: federico.gasparotto

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