Paulina Sazon - International Market Expansion, What Every Executive Needs to Know


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Insight into where Canada\'s ecommerce/multi-channel industry is in relation to the rest of the world\'s most active consumers.

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  • Paulina Sazon - International Market Expansion, What Every Executive Needs to Know

    1. 1. Trend Report: International Market Expansion What Executives Need to Know CONFIDENTIAL
    2. 2. What We’ll Cover <ul><li>Global Retail: Explosion in E-Commerce Growth </li></ul><ul><li>How Organizations are set up for International Markets </li></ul><ul><li>A closer look at Canada – your first step </li></ul><ul><li>Trends </li></ul>
    3. 3. Setting the Stage for Global Ecommerce
    4. 4. Internet Penetration – Top 10 World Markets
    5. 5. Global Retailing Sales Growth is Highest for E-commerce % CAGR 2001-2006 US $ billions Source: Euromonitor Int’l 0 5 10 15 25 20 30 35 Growth Sales
    6. 6. Global E-commerce Takes Off
    7. 7. Frequency of Online Purchasing
    8. 8. What the World is Buying
    9. 9. The Explosion of the Apparel & Footwear Categories
    10. 10. Popular Payment Methods for Global Ecommerce
    11. 11. <ul><li>A Closer look at Canada – </li></ul><ul><li>Your First Step Into International Markets </li></ul>
    12. 12. Why the Canadian Market vs. rest of word <ul><li>Perfect testing ground before going “across the pond.” </li></ul><ul><li>Canadians are a like market to the US: </li></ul><ul><ul><ul><li>We speak the same language </li></ul></ul></ul><ul><ul><ul><li>Canadians consumer the same media </li></ul></ul></ul><ul><ul><ul><li>The majority of Canadians, 80%, live within 60 miles of the US border making logistics easier to manage </li></ul></ul></ul>
    13. 13. Strong Canadian Dollar Spurs “Spending Spree”
    14. 14. The Dollar’s Rise Has Dramatically Changed Purchase Patterns <ul><li>Growing Strength of the Canadian dollar … </li></ul>
    15. 15. The Dollar’s Rise Has Dramatically Changed Purchase Patterns <ul><li>Sampling of 10 US merchants operating in Canada </li></ul><ul><li>Growing Strength of the Canadian dollar AND </li></ul><ul><li>The resulting impact on Canadian Sales … </li></ul>
    16. 16. The Dollar’s Rise Has Dramatically Changed Purchase Patterns
    17. 17. Online spending will grow at a 28% CAGR from 2006-2011 Good deals at US Web sites
    18. 18. Canadians are buying a broader variety of products online <ul><li>More Canadians are buying online </li></ul><ul><li>6% CAGR in the number of online buyers from 2006-2011 </li></ul><ul><li>9% increase in the number of online buyers in 2007 </li></ul><ul><li>Source: eMarketer, November 2007 </li></ul>
    19. 19. Canadians’ Average Order Value to Increase
    20. 20. Profile of the Canadian Cross Border Shopper <ul><li>High income earners drive the majority of online cross-border purchases, where 52% were made by those with household income greater than $70,000. </li></ul><ul><li>The 25 to 44 age segment is the most active group of cross-border buyers via online or catalogue. </li></ul><ul><li>The regions that have the highest reported incidence in online cross-border shopping include Ontario (35%), Prairies (22%), and B.C. (19%). </li></ul>
    21. 21. <ul><li>Percentage of Cross Border Purchases Reported by Category </li></ul><ul><li>Shoes/footwear – 50% driven by women’s dress shoes </li></ul><ul><li>Health and beauty – 45% driven by health-care aids (diet, vitamins) </li></ul><ul><li>Clothes – 44% driven by women’s apparel </li></ul><ul><li>Home furnishings – 31% driven by small home electronics </li></ul>Cross Border Spend Analysis
    22. 22. <ul><li>Trends in the Canadian Direct Retail Marketplace </li></ul>
    23. 23. Trend #1 – Social Shopping
    24. 24. What is Second Life <ul><li>Second life is a 3-D virtual world entirely built and owned by its residents. Since opening to the public in 2003, it has grown explosively and today is inhabited by more than 8-million registered users from around the globe </li></ul><ul><li>There are more than 300,000 known Canadians that also reside in Second Life </li></ul><ul><li>Second Life residents </li></ul><ul><ul><li>Have spent $1,064,579.00USD in the last 24 hours </li></ul></ul>
    25. 25. Case Study: Second Life <ul><li>Average Age: 32 </li></ul><ul><li>Average Individual income: $41,480 </li></ul><ul><li>SL reports that Second Life residents are, in large proportion, women </li></ul><ul><li>Average Age: 24 - 35 </li></ul><ul><li>Average Individual income: $70,000+ </li></ul><ul><li>55% of online shoppers are women </li></ul><ul><li>Strong correlation between social networking and e-commerce </li></ul><ul><li>Average annual spend online will increase from $891.00 to $1,295 </li></ul><ul><li>Net Gen – consumers between the ages of 25 – 44 are key direct buyers, with 28% of heavy online buyers between the 24 – 34 group </li></ul>
    26. 26. Retailers in Maple Grove <ul><li>Maple Grove features North America’s premier multi-channel retailers: </li></ul><ul><ul><li>Sears Canada </li></ul></ul><ul><ul><li>The Shopping Channel </li></ul></ul><ul><ul><li>Toys R Us </li></ul></ul><ul><ul><li>Brookstone </li></ul></ul><ul><ul><li>Red Canoe </li></ul></ul><ul><ul><li>Everything Olive </li></ul></ul><ul><ul><li>SkyMall </li></ul></ul><ul><ul><li>Canada Post </li></ul></ul>
    27. 27. Maple Grove – driving purchase conversion for retailers
    28. 28. The Results Visits to Lookbook & merchants Visitors to Maple Grove PR Value # of Impressions Objectives: 5,673 unique visitors to 290 unique visitors 15,000 unique visitors to Maple Grove 9,600 $341,220 (not including blogsphere) $225,000 9,186,617 impressions /54 articles including National Post, Marketing Magazine, CTV, City TV 2 million Actual Target
    29. 29. Trend #2 – Green Movement: Importance of Environmental Conservation and Preservation Would you say that environmental conservation and preservation is something that is becoming more important to you personally, less important, or no more or less important than it was a few years ago? Canada Post : Impact of Direct Mail on the Environment, 2008
    30. 30. Harmful Effects on the Environment Canada Post : Impact of Direct Mail on the Environment, 2008 For each of the following, please indicate how harmful you think the effects are on the environment: extremely harmful, very harmful, somewhat harmful, not very harmful.
    31. 31. Situating Direct Mail as an Environmental Issue <ul><li>Mail and Catalogs are often thought about in environmental context </li></ul><ul><ul><li>63% think about the environmental impact of mail and catalogs always or often when they receive it </li></ul></ul><ul><li>Relative to other environmental drivers, mail and catalogs are seen as less harmful </li></ul><ul><ul><li>Canadians less likely to believe it goes to landfill than Americans </li></ul></ul><ul><ul><li>But 50% say it is extremely or very harmful </li></ul></ul><ul><ul><li>Garbage is seen as the most harmful negative environmental driver </li></ul></ul>
    32. 32. Trend #3 – Not Just Multi-Channel but Cross Channel <ul><li>Reasons for cross-channel shopping </li></ul><ul><li>Immediate gratification </li></ul><ul><li>See product in person </li></ul><ul><li>Avoid paying shipping costs </li></ul><ul><li>Need to talk to a salesperson </li></ul><ul><li>Product not available for sale online </li></ul>For every $1 in online sales, the Internet influenced $3.45 of store sales
    33. 33. Cross-channel shoppers are a desirable customer segment
    34. 34. <ul><li>Thank-You! </li></ul>
    35. 35. <ul><li>How Organizations are set up </li></ul><ul><li>for International Markets </li></ul>
    36. 36. <ul><li>Global enterprises with single or multiple brands have </li></ul><ul><li>global e-commerce teams that leverage the existing </li></ul><ul><li>international team design: </li></ul><ul><ul><li>This is done to develop strong “Web centers” and take advantage of local/regional marketing and merchandising expertise </li></ul></ul><ul><ul><li>A common model for what is centralized and what is regionalized (international teams) does not exist </li></ul></ul><ul><li>“ Web centers” are typically focused on: </li></ul><ul><ul><li>E-commerce strategy, planning, and best practices </li></ul></ul><ul><ul><li>Specialized Web resources and unifying e-commerce operations (e.g., common platform, supply chain, and user experience) </li></ul></ul>
    37. 37. Web Strategy and Stages of Organization Design Stage 1 1996–2001 Stage 2 2002–Present Stage 3 Future Org. Hypotheses Cross Channel Effectiveness LOW HIGH Independent Independent Independent Fully Integrated Semi- Integrated International