1. The U.S. e-commerce market is large at over $200 billion annually, growing at 9% each year, and still has room to expand as only 9% of retail is online.
2. New e-commerce business models focusing on areas like group buying and flash sales have emerged and gained traction in recent years.
3. While innovation in e-commerce was lagging for over 10 years, the past 1-2 years have seen more disruption from companies adopting new models and targeting different customer segments with innovations in areas like mobile and social commerce.
Presentation - Case Study: RedBus.in – Automating the Bus Travel Industry (In...joyousjoylyn
Case PDF (uploaded seperately) with the detailed study and the presentation wit Redbus.in as an example to study Automation in the Bus Travel Industry.
This case study report is detail analysis of Amazon.com. The report describes the List of areas that
it has been working, the business models it has adopted and the various strategies that it has
implemented to make it one of the most successful E-commerce platform. This case study reflects
that using the strategies and model adopted by Amazon's can leads any other E-commerce site to get
successful. This case study also shows that how the different models and strategies must be
implemented with respect to the dynamic environment of the E-commerce.
Presentation - Case Study: RedBus.in – Automating the Bus Travel Industry (In...joyousjoylyn
Case PDF (uploaded seperately) with the detailed study and the presentation wit Redbus.in as an example to study Automation in the Bus Travel Industry.
This case study report is detail analysis of Amazon.com. The report describes the List of areas that
it has been working, the business models it has adopted and the various strategies that it has
implemented to make it one of the most successful E-commerce platform. This case study reflects
that using the strategies and model adopted by Amazon's can leads any other E-commerce site to get
successful. This case study also shows that how the different models and strategies must be
implemented with respect to the dynamic environment of the E-commerce.
According to the ecommerce Association of Bangladesh (e-cab) currently there are 1000 e-commerce entrepreneurs in the country who are running their business though websites & 8,000 entrepreneurs of f-commerce who run their business with Facebook pages.[1] Registered e-cab company almost 500 .
Online shopping or e-shopping is a form of electronic
Commerce which allows consumers to directly buy goods or
services from a seller over the Internet using a web browser.
Case study analysis of Alibaba.com including General Environment, Industry envi., competitive analysis, financial analysis, SWOT analysis, business strategies used and future scenario for alibaba.com
The increasing complexity of digital landscape on one side and huge business expectations on the other side are the driving force of change in e-commerce. Fueled by tons of data machine learning and artificial intelligence are slowly becoming the norm. But algorithms themselves won't be able to change the companies and deliver success. Entire companies need to change as well. How to embrace this change? Where to start and what to expect? How to organize yourselves? We'll deep-dive into data-driven digital marketing framework, followed by insights and case studies from clients and finish up with a stack of tools and takeaways you can use to produce some quick wins.
According to the ecommerce Association of Bangladesh (e-cab) currently there are 1000 e-commerce entrepreneurs in the country who are running their business though websites & 8,000 entrepreneurs of f-commerce who run their business with Facebook pages.[1] Registered e-cab company almost 500 .
Online shopping or e-shopping is a form of electronic
Commerce which allows consumers to directly buy goods or
services from a seller over the Internet using a web browser.
Case study analysis of Alibaba.com including General Environment, Industry envi., competitive analysis, financial analysis, SWOT analysis, business strategies used and future scenario for alibaba.com
The increasing complexity of digital landscape on one side and huge business expectations on the other side are the driving force of change in e-commerce. Fueled by tons of data machine learning and artificial intelligence are slowly becoming the norm. But algorithms themselves won't be able to change the companies and deliver success. Entire companies need to change as well. How to embrace this change? Where to start and what to expect? How to organize yourselves? We'll deep-dive into data-driven digital marketing framework, followed by insights and case studies from clients and finish up with a stack of tools and takeaways you can use to produce some quick wins.
e-Commerce Trends from 2014 to 2015 by Divante.coDivante
The new and actual version of this Report is here
https://www.slideshare.net/divanteltd/ecommerce-trends-from-2017-to-2018-by-divante
e-Commerce sales worldwide will reach $1.7 trillion in 2015. The World's Leading E-Commerce Companies, Capital Market, E-Commerce startups to watch, Omnichannel, B2C e-commerce sales worldwide and more!
E-commerce Trends from 2015 to 2016 by DivanteDivante
Every year our specialists gather the most significant trends in the e-commerce world.
Here we present you the compedium of knowledge that will help you to choose the best possible direction for your e-business and prevent you from missing out on a great opportunities for the future development!
Class Activity done with data accumulation from various internet websites and database sources for better understanding of e-commerce models functioning at present and their uses in Indian scenario.
The Finance Perspective: The Business Model for the Subscription EconomyZuora, Inc.
Learn best practices for subscription financial management, with a focus on the ‘Three Metrics That Matter’, the new income statement for the Subscription Economy and how to apply it to your business. Learn best practices for subscription financial management, with a focus on the ‘Three Metrics That Matter’, the new income statement for the Subscription Economy and how to apply it to your business.
SparkLabs Global Asia E-Commerce Report 2015Bernard Moon
Report focused on e-commerce in Asia. Overviews of China, Japan, Korea, India and Southeast Asia markets (Indonesia, Malaysia, Thailand, Vietnam). Describes the major startups and companies for each market and the investor landscape.
2013 Future state E-commerce Trends WebinarMichael Healey
This deck is from an InformationWeek 2013 Internet Trends webinar. Summary: There's no such thing as a standalone ecommerce site – today, this function cannot be a bolt-on. Companies must go broad and think holistically, looping in ERP, suppliers, security, marketing automation packages and more. There are multiple ecommerce instances geared for specific partners. But it's a big, ongoing development challenge, and customers demand a seamless experience, whether interacting on PCs, tablets or smartphones. Yet, there are no standards to lean on.
In this webcast we'll discuss state-of-the-art back-end infrastructure and automation, ways to overcome gaps in transaction processes, and services-based options.
You'll learn:
Technical hurdles and design considerations
Major challenges and opportunities to improve
Examples of companies using best practices to get this right
Clipperton Finance, a leading European corporate finance boutique serving the technology and media industries, has released a Newsletter concentrating on European e-commerce. Clipperton Finance has provided transaction services to European Technology and Media companies since its inception in 2003.
Following the short-term fall-out of the financial crisis in mid-2008, we have observed a significant increase in investment activity in the European e-commerce space which shows no sign of abating. Investors are attracted to a segment with favorable macro-drivers, capital efficiency through early revenue generation and a thorough understanding of key performance metrics.
The purpose of this report is to evaluate the trends that make this market so attractive, to understand the challenges for European e-commerce companies, and to explore some future developments.
Companies featured in the newsletter include: Aramis, Avail Intelligence, MonShowRoom, Criteo, Tailor Store, Graze, Spartoo, Euroffice, Fizzback
This article presents and discusses the different business models adopted by e-commerce firms. It addresses the
issue of the business model, concerning the revenue-generating model, marketing-related costs, logistical
problems, risk of fraud and the demand for investment in technology. Some of the models are profitable and most
are not. The world is experiencing a sharp increase in this sale channel, but many operations are still losing a lot
of money
Salmon and Stibo commissioned Coleman Parkes Research to conduct a detailed research programme in February 2013, exploring current B2B trends and developing eCommerce trends in the UK. 100 senior UK business decision makers were questioned about the current stage of their adoption of eCommerce, what they had planned over the next two to three years and the challenges they faced in implementing successful eCommerce strategies.
Strategic Initiative Paper Team ENathan Marr, Melody R.docxdessiechisomjj4
Strategic Initiative Paper Team E
Nathan Marr, Melody Rosado, John Scott, Samuel Sikapizye
FIN/370
June 15, 2015
Joe Brennan
Running head: STRATEGIC INITIATIVE PAPER TEAM E
1
STRATEGIC INITIATIVE PAPER TEAM E
6
Strategic Initiative Paper Team E
Walmart Stores, Inc. reflects many years of precedence with a positive return for speculators in its yearly report and presents a five-layered key arrangement. The Walmart Store, Inc. 2012 Annual Report records these activities as "1) Developing our kin; 2) Driving the profitability circle; 3) Winning in global e-commerce; 4) Reinvigorating our client centered society; and 5) Leading on social and natural issues (p. 3).
Even to this day Walmart strives to constantly expand its e-commerce. As reported in the 2014 annual report on page 20, “Wal-Mart will keep on expanding their speculation into e-trade as new open doors present themselves.” Walmart expects on making a transformative development by including abilities in e-business and portable trade. They have a tendency to view their business through the eyes of the customers; they tend not to consider the stores, clubs and sites autonomously.
Corporate Financial Planning
Effects on the Supply Chain
According the to 2015 annual report to the general public Walmart stated approximately 8 million items are for sale on Walmart.com. About 75% of those items do not see the inside of the stores (Walmart, 2015). Walmart intends to expand their e-commerce abilities throughout the world. Walmart’s British operations, known as ASDA Ltd. now has Click and Collect. It is a process where customers can order their items online and simply go to the store only to pick up their items. Click and Collect is really taking off in Great Britain. This highbred of online shopping and in-person shopping saves the danger of having the items dropped off, when you are not home, from being stolen; and yet, you do not need to spend an hour or so in the store. Think of calling ahead before you get a pizza from Domino’s (Wallop, 2013)
Expansion of the e-commerce means the costs of running servers will go up. As more people use the internet web site larger servers will be required to handle the higher traffic. A failure to keep up with the demand will result in a catastrophic crash of the system. The United States government learned this the hard way when the government health insurance market place was overloaded by a huge amount of users trying to use it at the same time.
As far as supply is concerned, Walmart has mastered the art of supplying items to customers. Walmart’s supply ordering system automatically reorders supply as the cash registers record sales of items. Walmart has even given certain suppliers unrestricted access to automatically resupply the system without the need of an actual Walmart employee doing the ordering. In essence, the new replacement items can be on their way to the stores before the shelves are out. Consider what would happen if Walmart ran o.
Get Free in-depth analysis on key eCommerce trends 2021 & top platforms. The paper contains 2020 market report, first time reveals LitExtension inhouse data Type a message
Builder.ai Founder Sachin Dev Duggal's Strategic Approach to Create an Innova...Ramesh Iyer
In today's fast-changing business world, Companies that adapt and embrace new ideas often need help to keep up with the competition. However, fostering a culture of innovation takes much work. It takes vision, leadership and willingness to take risks in the right proportion. Sachin Dev Duggal, co-founder of Builder.ai, has perfected the art of this balance, creating a company culture where creativity and growth are nurtured at each stage.
LF Energy Webinar: Electrical Grid Modelling and Simulation Through PowSyBl -...DanBrown980551
Do you want to learn how to model and simulate an electrical network from scratch in under an hour?
Then welcome to this PowSyBl workshop, hosted by Rte, the French Transmission System Operator (TSO)!
During the webinar, you will discover the PowSyBl ecosystem as well as handle and study an electrical network through an interactive Python notebook.
PowSyBl is an open source project hosted by LF Energy, which offers a comprehensive set of features for electrical grid modelling and simulation. Among other advanced features, PowSyBl provides:
- A fully editable and extendable library for grid component modelling;
- Visualization tools to display your network;
- Grid simulation tools, such as power flows, security analyses (with or without remedial actions) and sensitivity analyses;
The framework is mostly written in Java, with a Python binding so that Python developers can access PowSyBl functionalities as well.
What you will learn during the webinar:
- For beginners: discover PowSyBl's functionalities through a quick general presentation and the notebook, without needing any expert coding skills;
- For advanced developers: master the skills to efficiently apply PowSyBl functionalities to your real-world scenarios.
Epistemic Interaction - tuning interfaces to provide information for AI supportAlan Dix
Paper presented at SYNERGY workshop at AVI 2024, Genoa, Italy. 3rd June 2024
https://alandix.com/academic/papers/synergy2024-epistemic/
As machine learning integrates deeper into human-computer interactions, the concept of epistemic interaction emerges, aiming to refine these interactions to enhance system adaptability. This approach encourages minor, intentional adjustments in user behaviour to enrich the data available for system learning. This paper introduces epistemic interaction within the context of human-system communication, illustrating how deliberate interaction design can improve system understanding and adaptation. Through concrete examples, we demonstrate the potential of epistemic interaction to significantly advance human-computer interaction by leveraging intuitive human communication strategies to inform system design and functionality, offering a novel pathway for enriching user-system engagements.
GDG Cloud Southlake #33: Boule & Rebala: Effective AppSec in SDLC using Deplo...James Anderson
Effective Application Security in Software Delivery lifecycle using Deployment Firewall and DBOM
The modern software delivery process (or the CI/CD process) includes many tools, distributed teams, open-source code, and cloud platforms. Constant focus on speed to release software to market, along with the traditional slow and manual security checks has caused gaps in continuous security as an important piece in the software supply chain. Today organizations feel more susceptible to external and internal cyber threats due to the vast attack surface in their applications supply chain and the lack of end-to-end governance and risk management.
The software team must secure its software delivery process to avoid vulnerability and security breaches. This needs to be achieved with existing tool chains and without extensive rework of the delivery processes. This talk will present strategies and techniques for providing visibility into the true risk of the existing vulnerabilities, preventing the introduction of security issues in the software, resolving vulnerabilities in production environments quickly, and capturing the deployment bill of materials (DBOM).
Speakers:
Bob Boule
Robert Boule is a technology enthusiast with PASSION for technology and making things work along with a knack for helping others understand how things work. He comes with around 20 years of solution engineering experience in application security, software continuous delivery, and SaaS platforms. He is known for his dynamic presentations in CI/CD and application security integrated in software delivery lifecycle.
Gopinath Rebala
Gopinath Rebala is the CTO of OpsMx, where he has overall responsibility for the machine learning and data processing architectures for Secure Software Delivery. Gopi also has a strong connection with our customers, leading design and architecture for strategic implementations. Gopi is a frequent speaker and well-known leader in continuous delivery and integrating security into software delivery.
Essentials of Automations: Optimizing FME Workflows with ParametersSafe Software
Are you looking to streamline your workflows and boost your projects’ efficiency? Do you find yourself searching for ways to add flexibility and control over your FME workflows? If so, you’re in the right place.
Join us for an insightful dive into the world of FME parameters, a critical element in optimizing workflow efficiency. This webinar marks the beginning of our three-part “Essentials of Automation” series. This first webinar is designed to equip you with the knowledge and skills to utilize parameters effectively: enhancing the flexibility, maintainability, and user control of your FME projects.
Here’s what you’ll gain:
- Essentials of FME Parameters: Understand the pivotal role of parameters, including Reader/Writer, Transformer, User, and FME Flow categories. Discover how they are the key to unlocking automation and optimization within your workflows.
- Practical Applications in FME Form: Delve into key user parameter types including choice, connections, and file URLs. Allow users to control how a workflow runs, making your workflows more reusable. Learn to import values and deliver the best user experience for your workflows while enhancing accuracy.
- Optimization Strategies in FME Flow: Explore the creation and strategic deployment of parameters in FME Flow, including the use of deployment and geometry parameters, to maximize workflow efficiency.
- Pro Tips for Success: Gain insights on parameterizing connections and leveraging new features like Conditional Visibility for clarity and simplicity.
We’ll wrap up with a glimpse into future webinars, followed by a Q&A session to address your specific questions surrounding this topic.
Don’t miss this opportunity to elevate your FME expertise and drive your projects to new heights of efficiency.
Let's dive deeper into the world of ODC! Ricardo Alves (OutSystems) will join us to tell all about the new Data Fabric. After that, Sezen de Bruijn (OutSystems) will get into the details on how to best design a sturdy architecture within ODC.
JMeter webinar - integration with InfluxDB and GrafanaRTTS
Watch this recorded webinar about real-time monitoring of application performance. See how to integrate Apache JMeter, the open-source leader in performance testing, with InfluxDB, the open-source time-series database, and Grafana, the open-source analytics and visualization application.
In this webinar, we will review the benefits of leveraging InfluxDB and Grafana when executing load tests and demonstrate how these tools are used to visualize performance metrics.
Length: 30 minutes
Session Overview
-------------------------------------------
During this webinar, we will cover the following topics while demonstrating the integrations of JMeter, InfluxDB and Grafana:
- What out-of-the-box solutions are available for real-time monitoring JMeter tests?
- What are the benefits of integrating InfluxDB and Grafana into the load testing stack?
- Which features are provided by Grafana?
- Demonstration of InfluxDB and Grafana using a practice web application
To view the webinar recording, go to:
https://www.rttsweb.com/jmeter-integration-webinar
Key Trends Shaping the Future of Infrastructure.pdfCheryl Hung
Keynote at DIGIT West Expo, Glasgow on 29 May 2024.
Cheryl Hung, ochery.com
Sr Director, Infrastructure Ecosystem, Arm.
The key trends across hardware, cloud and open-source; exploring how these areas are likely to mature and develop over the short and long-term, and then considering how organisations can position themselves to adapt and thrive.
Connector Corner: Automate dynamic content and events by pushing a buttonDianaGray10
Here is something new! In our next Connector Corner webinar, we will demonstrate how you can use a single workflow to:
Create a campaign using Mailchimp with merge tags/fields
Send an interactive Slack channel message (using buttons)
Have the message received by managers and peers along with a test email for review
But there’s more:
In a second workflow supporting the same use case, you’ll see:
Your campaign sent to target colleagues for approval
If the “Approve” button is clicked, a Jira/Zendesk ticket is created for the marketing design team
But—if the “Reject” button is pushed, colleagues will be alerted via Slack message
Join us to learn more about this new, human-in-the-loop capability, brought to you by Integration Service connectors.
And...
Speakers:
Akshay Agnihotri, Product Manager
Charlie Greenberg, Host
PHP Frameworks: I want to break free (IPC Berlin 2024)Ralf Eggert
In this presentation, we examine the challenges and limitations of relying too heavily on PHP frameworks in web development. We discuss the history of PHP and its frameworks to understand how this dependence has evolved. The focus will be on providing concrete tips and strategies to reduce reliance on these frameworks, based on real-world examples and practical considerations. The goal is to equip developers with the skills and knowledge to create more flexible and future-proof web applications. We'll explore the importance of maintaining autonomy in a rapidly changing tech landscape and how to make informed decisions in PHP development.
This talk is aimed at encouraging a more independent approach to using PHP frameworks, moving towards a more flexible and future-proof approach to PHP development.
UiPath Test Automation using UiPath Test Suite series, part 4DianaGray10
Welcome to UiPath Test Automation using UiPath Test Suite series part 4. In this session, we will cover Test Manager overview along with SAP heatmap.
The UiPath Test Manager overview with SAP heatmap webinar offers a concise yet comprehensive exploration of the role of a Test Manager within SAP environments, coupled with the utilization of heatmaps for effective testing strategies.
Participants will gain insights into the responsibilities, challenges, and best practices associated with test management in SAP projects. Additionally, the webinar delves into the significance of heatmaps as a visual aid for identifying testing priorities, areas of risk, and resource allocation within SAP landscapes. Through this session, attendees can expect to enhance their understanding of test management principles while learning practical approaches to optimize testing processes in SAP environments using heatmap visualization techniques
What will you get from this session?
1. Insights into SAP testing best practices
2. Heatmap utilization for testing
3. Optimization of testing processes
4. Demo
Topics covered:
Execution from the test manager
Orchestrator execution result
Defect reporting
SAP heatmap example with demo
Speaker:
Deepak Rai, Automation Practice Lead, Boundaryless Group and UiPath MVP
UiPath Test Automation using UiPath Test Suite series, part 4
E-commerce Landscape 2012
1. U.S. E-commerce Landscape & Trends
February 2012
Josh Yang
jyang@mba2012.hbs.edu Harvard Business School
twitter.com/joshhyang Independent Student Research
Confidential
2. Executive Summary (1 of 3)
• The U.S. e-commerce market is big ($200B+), getting bigger (9% CAGR through 2015), and still early (only
9% of total retail)
‒ Market growth has been driven by consumers becoming increasingly Internet-connected and credit
card holding, and these consumers being increasingly open to purchasing online
• As the overall e-commerce market has expanded in dollar value, e-commerce start-ups (e.g., niche
retailers, service providers) have started to command large enough addressable markets to become
sustainable businesses
‒ In the last two years, several new business models have garnered VC attention and begun to scale
(e.g., group buying, flash sales, subscription, online brands)
‒ Consumers have shown a newfound willingness to test new e-commerce business models (see
ShoeDazzle, RenttheRunway, Gilt Groupe), but these are primarily wealthier consumers
‒ The only new e-commerce business model that has gained significant traction with the mass
consumer is group buying
• There is are still several avenues to creating new opportunities for in e-commerce business
‒ New business models are still being born – personalization companies like Trunk Club and online
brands like Warby Parker continue to bring offline models into existence online
‒ There is also room for companies to clone or apply existing business models to new product
categories, and/or target to different customer segments (e.g., low-end vs. high-end, male vs.
female)
‒ Start-ups often take existing business models and apply a marketing pivot or alternate strategy
2
3. Executive Summary (2 of 3)
• However, e-commerce business models that don’t provide real long-term value to consumers will likely
meet consumer disenchantment, churn, and end up as just a passing trend
• In general, the newer business models that have emerged (e.g., subscription, C2C marketplaces, flash
sales) tend to be focused on impulse purchases
‒ Although planned purchases make up the majority of retail spend historically, older companies like
Amazon and Wayfair seem to have locked up planned purchasing on the web, as this revolves more
around search and catalog layouts than email digests
‒ Impulse buying has taken off targeted at those with more to spend, but the problem here is that
these purchases generally have higher rates of regret after purchase (i.e., more returns and/or churn)
• Two newer business models that are less reliant on impulse purchases are online brands and crowdsourced
demand
‒ Online brands are simply new brands that have chosen online as the marketing channel of choice
over offline – barriers to entry in online brands includes the expertise required to build a vertically
integrated supply chain
‒ Crowdsourced demand start-ups (e.g., Modcloth) also rely less on impulse purchases, as do social
bookmarking start-ups like Pinterest, where users create product wishlists for “buy later”
3
4. Executive Summary (3 of 3)
• As more eyeballs move from PC to mobile, mobile e-commerce will become very important, and the
experience today is still in early stages
‒ Currently, few e-commerce companies are focused on mobile, leaving consumers to browse e-
commerce sites on browsers or download one app per retailer that actually has one
‒ There is critical distribution problem for mobile e-commerce, too, as consumers must download
one new app for each retailer
‒ Start-ups tackling the space include Coffee Table, TheFind Catalogue, and Google Catalog, but they
are very basic preliminary products
• Finally, the proliferation of social networks in recent years could potentially open up opportunities to
create inherently social shopping experiences online; however, this opportunity has yet to be cracked
‒ Most of the social commerce activity occurring today are Facebook pop-up stores and
Twitter/Facebook buttons embedded on e-commerce product pages
‒ Some companies also use the social graph to make referral programs easier
‒ However, no clear class of scalable, defensible start-ups has come out of social commerce yet
4
6. The U.S. e-commerce market is big ($200B+), getting bigger (9%
CAGR through 2015), and still early (only 9% of total retail)
U.S. E-Commerce Market (2009-15)
$B
300 279 CAGR
259 (11-15)
250 240
218
197
200 176
157
150
9.1%
100
50
0
2009A 2010A 2011F 2012F 2013F 2014F 2015F
Total U.S. Retail
(Trillion Dollars)
$1.9T $2.2T $2.2T $2.2T $2.4T $2.4T $2.5T 3.8%
E-Commerce as % of
8% 8% 9% 10% 10% 11% 11%
Total Retail
E-Commerce as % of
Total Retail 11% 11% 12% 13% 14% 15% 15%
(excluding grocery)
Source: Forrester, US Online Retail Forecast (Feb 2011)
(http://www.forrester.com/rb/Research/us_online_retail_forecast%2C_2010_to_2015/q/id/58596/t/2)
6
7. More Internet users are using the web for shopping, and
frequency per user is expected to increase
U.S. E-Commerce Shopper Data (2004-13E)
E-commerce Shopper Data Units 2004 2005 2006 2007 2008 2009 2010E 2011E 2012E 2013E
E-commerce Penetration
Internet Population [M] 186 195 203 211 217 222 227 231 235 239
Online Shoppers [M] 104 117 130 143 153 160 170 176 184 189
E-commerce Penetration of Internet Population [%] 55.9% 60.0% 64.0% 67.8% 70.5% 72.1% 74.9% 76.2% 78.3% 79.1%
E-commerce Shopper Stats
Shopping Sessions / shopper / month [M] 1.90 1.75 1.88 1.91 1.87 1.99 2.13 2.25 2.38 2.45
Average price / session [M] 39.50 41.25 43.00 45.50 45.00 41.00 41.50 43.00 44.00 46.00
Product return rate [%] 10.0% 9.0% 9.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0% 8.0%
Source: Department of Commerce, Internet World Stats, Company reports, JP Morgan 2011 Internet Sector Outlook
(http://www.slideshare.net/victori98pt/2011-internet-sector-outlook-by-j-p-morgan)
7
8. Consumers are continuing to shift retail buying online, at the
expense of the likes of Best Buy, Macy’s, and Westfield …
Consumers are spending more
via e-commerce …
… at the expense of shopping
malls, department stores, and
electronics stores
Source: Forrester, US Online Retail Forecast (Feb 2011)
(http://www.forrester.com/rb/Research/us_online_retail_forecast%2C_2010_to_2015/q/id/58596/t/2)
8
9. … with the most active online buyers being the most affluent
Source: J.P. Morgan Internet User Survey 2010 (http://www.slideshare.net/victori98pt/2011-internet-sector-outlook-by-j-p-morgan)
9
10. Although innovation in e-commerce had been lagging for 10+
years, the last 1-2 years has seen an uptick
Top Overall Sites Top E-commerce Top E-Commerce • Overall, innovation has been rampant on
(Sept 2011) Sites (Mar 2010) Sites (Sept 2011) the web
1 Google Amazon Amazon
– 11 of the top 15 overall sites did not exist
2 Facebook eBay eBay ten years ago
3 Youtube Netflix Netflix – Several fast risers cater to the China
market (Baidu, QQ, Taobao, Sina)
4 Yahoo Wal-mart Wal-mart
5 Baidu Best Buy IKEA • However, through March 2010, e-
6 Wikipedia Ikea Target commerce had not changed much
7 Blogger Target Best Buy – By March 2010, all 15 top e-commerce
sites existed 10 years ago (NewEgg was
8 Windows Live NewEgg Groupon founded in 2001)
9 Twitter Overstock Multiply.com
• In the last two years, several new
10 QQ Macy’s NewEgg business models have begun to materially
11 MSN Barnes and Noble LivingSocial disrupt the e-commerce space
12 Linkedin Ticket Master Barnes and Noble – Groupon and LivingSocial have begun top
Amazon Home Depot Overstock trafficked sites
13
14 Taobao Gap Gap – Multiply is a primitive but highly trafficked
marketplace serving Southeast Asia
15 Sina JC Penney Sears
Source: Alexa Top 500 Global Sites (note: subsidiaries listed on Alexa were removed, e.g., Amazon UK)
First Round Capital (http://redeye.firstround.com/2010/03/some-more-thoughts-on-innovation-in-ecommerce.html)
10
11. Over time, the e-commerce landscape has gravitated toward
wealthy customers and high-margin products (up and to the right)
High Margin SKU’s
Low Income
Wealthy Shoppers
Shoppers
Low Margin SKU’s
11
12. E-commerce companies typically have lower operating expenses
than offline retailers (Zappos is an exception)
• Typically, e-commerce retailing is
Representative P&L for Several Retailers (Offline and Online)1 cheaper than offline retailing
Target Amazon Blue Nile Zappos – Primarily driven by online storefronts
Net Sales $M 63,435 8,490 333 635 being cheaper than offline
Cost of Sales % 69.5% 76.0% 78.4% 64.8% • However, this is not always the case
Gross Profit % 30.5% 24.0% 21.6% 35.2%
– E-commerce start-ups often buy at
Operating Expenses
smaller scale, slightly hurting COGS
Fulfillment % 8.6%
24.1% – E-commerce companies often offer
Marketing % 2.3%
free shipping and return shipping to
Technology and content % 4.8% 4.0% encourage e-commerce adoption,
G&A % 1.7% 3.6% driving up fulfillment costs
Other expenses % 0.6% 0.0%
Total Opex 20.5% 17.9% 15.2% 31.7% • The hottest e-commerce start-ups
EBITDA % 10.1% 6.1% 6.4% 3.4%
tend to focus on high-margin
categories, but financially speaking
low-margin goods can be profitable
online as well
Note: 1Target data based on FY2009 10-K (excluding its non-retail businesses)
Amazon data based on FY2005 10-K (prior to Kindle and AWS businesses). However, this includes its marketplace business
Blue Nile data based on FY2010 10-K
Zappos data based on FY2008 financials (from HBS case)
Source: Company 10-K’s, HBS case on Zappos, Interview with HBS Retailing Expert
12
13. The big players in e-commerce appear to be moving slowly (and
tritely), leaving much room for upstarts to play
1 • Amazon continues to add incremental features to its site, while continuously
driving traffic to other destination sites (MyHabit, Soap, Endless, etc.)
• Amazon appears to be investing in mobile e-commerce via voice-activated
shopping, as it recently acquired a voice recognition technology Yap
• As growth is slowing in eBay’s core marketplace business, it appears to be
focusing on Paypal, particularly in the offline mobile payments space
2
• A series of acquisitions have bolstered Paypal’s reach and technology (Where,
Zong, Figcard, RedLaser, etc.)
• Walmart has created @Walmart Labs to explore social and mobile innovation
3 in e-commerce
• However, its rumored ideas aren’t innovative, and it will likely execute slower
than start-ups in the space
• Google threatened to make a foray into e-commerce with Boutiques, but
4 recently shuttered that effort and appears to be content driving e-commerce
traffic via product search
13
14. 1 Amazon continues to add incremental features to its site, while
continuously driving traffic to other destination sites
• Amazon’s core business continues to grow, as media and general merchandise e-commerce continue to
make up the bulk of revenue
– By selling its own electronic platforms well (Kindle and Fire), Amazon’s razor-blade strategy has continued to grow its
media business (~13% CAGR 2008-10)
– Services such as AWS still only make up only ~4% of net revenues (FY2010)
• On the pure e-commerce side, Amazon has recently re-designed the site’s aesthetics and added features
– Potentially tackling mobile e-commerce problems by building a voice-activated personal shopping assistant, similar to
Siri (acquired Yap in November 2011 for its voice-recognition technology); has also recently updated its mobile apps
– Amazon has decided not to include Facebook Connect nor Like buttons, opting for its in-house system
• Moreover, Amazon is focusing on growing e-commerce product categories with a distributed destination
site strategy (rather than hoarding all traffic to Amazon.com for all categories)
– Launched MyHabit (Gilt competitor) for women’s apparel in May 2011 and Endless for shoes
– Acquired Quidsi in Nov 2010, then launched Yoyo.com for toys and Wag.com for pet products
– Soap.com is expanding into grocery as of Oct 2011, despite Amazon’s own foray in early 2011
Source: (1) http://techcrunch.com/2011/11/09/amazon-snaps-up-yap-and-its-voice-recognition-technology/
(2) http://online.wsj.com/article/SB10001424053111904716604576549413463996484.html
(3) http://techcrunch.com/2011/10/31/amazons-shoes-and-accessories-e-commerce-site-endless-launches-iphone-app/
(4) http://techcrunch.com/2011/10/24/amazons-online-drugstore-soap-com-adds-groceries-to-the-list/
(5) http://www.techflash.com/seattle/2011/01/amazon-plans-to-expand-grocery.html
(6) http://techcrunch.com/2011/09/20/after-pets-diapers-and-soap-amazons-quidsi-tackles-toys-with-retail-site-yoyo/
(7) http://techcrunch.com/2011/08/01/amazon-takes-gilt-groupe-competitor-myhabit-mobile-with-new-iphone-app/
(8) Amazon 2010 Annual Report (page 27)
14
15. 2 As marketplace growth slows, eBay is exploring mobile payments
• Growth in the e-commerce auction marketplace business has slowed, as Paypal now represents
Growth Slowing in 39% of eBay’s overall revenue
Marketplace • Consumer purchasers are gradually shifting away from auction e-commerce as other e-
commerce supply has opened up new buying channels (e.g., flash sales, offline retailers creating
online presences)
• eBay users can now scan product barcodes in-store and access eBay marketplace listings on
Focus on Online to their phones (result of June 2010 acquisition of RedLaser)
Offline ‒ Users can also post problems for sale with a quick scan of an offline bar code
• eBay users can also scan product barcodes to find local retailers’ inventory of that same SKU.
Online searches can also access local retailer inventory (result of Milo acquisition)
• eBay ultimately wants local retailers to accept Paypal as a form of payment, but this growth has
Driving Mobile been slow. Its acquisition of Where in Spring 2011 gives eBay a network of local SMB’s
Payments with
• Its acquisition of FigCard is also an attempt to increase Paypal penetration in offline payments
Paypal
(FigCard is a USB allowing users to pay at local SMB’s from their mobile phones via Paypal). It
also acquired Zong, enabling users to potentially pay via their mobile phone bills
• eBay has had the Group Gifts feature since 2010, streamlining the group gifting process. They
Building Social acquired The Gifts Project in Sept 2011, which was previously powering Group Gifts
Commerce Features • eBay is also working on product recommendations based on Facebook data (just acquired
Hunch) and a feature allowing users to solicit feedback from Facebook friends prior to purchase
Source: (1) http://techcrunch.com/2011/05/15/connecting-the-dots-on-ebays-local-shopping-strategy/
(2) http://techcrunch.com/2011/06/15/milo-fetch-allows-local-retailers-to-upload-their-inventory-to-ebay/
(3) http://allthingsd.com/20110908/ebay-bets-on-social-commerce-with-acquisition-of-the-gifts-project/
15
16. 3 Walmart, meanwhile, is also focused on similar social and mobile
initiatives, although with less urgency
• Walmart has leveraged its gigantic offline brand into e-commerce, garnering 1.5 billion visits
to Walmart.com each year (fourth highest-traffic e-commerce site behind Amazon, eBay and
Netflix, according to Alexa)
– Even so, e-commerce is still a small part of its overall business, which generated $419B in
annual sales and 10.5 billion customer visits per year (7x the online traffic)
– This focus on the core business may limit Wal-Mart’s urgency to innovate quickly and
invest heavily in e-commerce
• Like eBay, they believe that the next frontier for e-commerce will be social and mobile, and
acquired Kosmix for $300M+ to form Silicon Valley-based @WalmartLabs
– On the social front, they are focused on gifting and “virtual end-caps” (personalized SKU
recommendations based on Facebook data, in the form of curated emails)
– On the mobile front, they just revamped their iPad and iPhone apps allowing users to
browse inventory at local stores (like Milo), scan products (like RedLaser), and create
voice-activated shopping lists
Source: (1) http://allthingsd.com/20110615/what-wal-mart-has-in-store-for-making-commerce-social/
(2) http://www.washingtonpost.com/business/technology/walmart-introduces-new-iphone-ipad-apps/2011/11/09/gIQADBAC5M_story.html
16
17. 4 Google has pulled back on a foray into an e-commerce
destination site, but is innovating on e-commerce search
• Google launched Boutiques.com in November
2010, but has decided to shut it down in October
2011
– Boutiques was an e-commerce site allowing
anyone to curate a “boutique” of favorite
products
– Shoppers could follow their favorite
curators and click-through to transact on
other retailers’ site
• However, they recently updated their Product
Search site, with a heavy emphasis on computer
vision and machine learning algorithms
– The aim is to show users similar products or
to allow users to search by product
characteristic (e.g., red dress)
Source: http://googlecommerce.blogspot.com/2011/09/enhancing-shopping-experience-on-google.html
17
19. Typically, e-commerce business models follow a cycle
Description Examples (Flash Sales)
• One or several companies develop a new • Gilt Groupe, Vente Privee
business model
Nascent
New Business Model
• Often originates from offline analog or tweak
on other online model
• Several companies will clone good business • Rue La La, Ideeli, Hautelook,
Copycats models MyHabit (Amazon), FashionVault
(Ebay)
• Slight variations may include geography,
branding, strategy
• Several companies begin replicating the • One Kings Lane, Totsy, Zulily,
Apply to Different
business model in different product categories Lot18, Gilt Taste, Jetsetter, Little
Categories Rue
• Several companies will pull different marketing • Fab, Ahalife, OpenSky, Net-a-
Apply Innovative
levers to differentiate, including theme, Porter
Marketing Strategy pricing, content, influencer-marketing, etc
Saturated
• In some industries, aggregators can be • MyNines, RowNine
Aggregator successful
• Criteria include highly fragmented,
commoditized products, low emphasis on
membership, etc
19
20. Several business models’ cycles are shown below
Traditional C2C Flash Sales Group Buying Subscription
E-retailing Marketplace / Coupons
• Amazon • Ebay • Gilt Groupe, • Woot • ShoeDazzle
New Business Vente Privee
Model
• Buy, NewEgg • Half.com, Amazon • Rue La La, Ideeli, • Groupon, • Justfab,
Copycats Marketplace Hautelook, My LivingSocial, Buy JewelMint
Habit (AMZ), With Me,
Fashion Vault Facebook Deals,
(Ebay) Google Offers
• Wayfair, B&N, • AirBnB, SkillShare, • One Kings Lane, • Plum District, • Beachmint,
Apply to Different ShoeBuy, Expedia, Qraft Totsy, Zulily,, Bevvy, Poggld Babbaco,
Categories Lot18, Gilt Taste, Manpacks,
Jetsetter, Little Guyhaus
Rue, Gilt Home
Apply Innovative • Zappos, Bonobos • Etsy • Fab, Ahalife, • Gilt City • Birchbox, Not
Marketing OpenSky, Net-a- Another Bill
Strategy Porter, Hotel
Tonight
• Shopzilla, • n/a • MyNines, • Yipit, DailyD, • n/a
Aggregator PriceGrabber, RowNine 8Coupons,
Shopping.com, TheDealMap
Google Product
20
21. One approach to brainstorming new business models is porting
offline retail models online
Offline Model Offline Example(s) Online Analog(s)
Single-brand retail stores Gap, American Apparel Everlane, Betabrand
Multi-brand retail stores Walmart, Macy’s Amazon, Walmart
Traditional Retail
Wholesale retail Costco None
Venue gift shops Disneyland stores, stadium stores Facebook pop-up shops (to a small extent)
Import goods shops n/a Ahalife
Boutiques / mom-and-pops n/a Shoptiques
Outlet retail stores Gap, BR Gilt, Rue La La (to some extent)
Garage sales n/a C2C marketplaces (Copious, Poshmark, Craigslist)
Auctions n/a eBay, Swoopo
Fukubukuru Baseball cards LBB
Alternative Models
Mail-order Mail-order catalogs TheFind Catalogues, Coffee Table
“Of the month” clubs BMG CD Clubs, Book clubs ShoeDazzle,
Direct-Response TV As Seen on TV, HSN Joyus
In-flight duty free Skymall Not possible
Swap meets / conventions n/a C2C marketplaces (Copious, Poshmark, Craigslist)
Black markets / knock-offs n/a None
21
22. E-commerce category analysis shows that apparel and home
goods are fragmented and competitive
(Raw Data)
Top 500 E-commerce Retailers: Total Average
# of Retailers vs. Revenue
# of Retailers Category Revenue per
100% in Top 500 Revenue ($B) Retailer ($B)
3%
2% 2% Automotive parts
4% 2% 7 $0.6 $0.08
90% 2%
6% 3% Jewelry 14 $1.0 $0.07
3%
80% 9% 5% Flowers & gifts 11 $1.2 $0.11
4% 12% Toys & hobbies 18 $1.4 $0.08
70% 5% Sporting goods 29 $1.9 $0.07
60% 10% 14% Specialty (non-apparel) 45 $2.7 $0.06
5% Food & drug 21 $2.8 $0.13
50% 5% Hardware, home imp. 24 $2.9 $0.12
19%
40% Housewares, home 50 $3.6 $0.07
24% Health & beauty 26 $3.6 $0.14
30% Books, music, video 27 $5.7 $0.21
20% 3%
Apparel & accessories 122 $15.0 $0.12
34%
Office supplies 17 $17.7 $1.04
11%
10% Computers, electronics 57 $23.8 $0.42
6% Mass merchant 32 $43.6 $1.36
0%
Breakdown of Top 500 Revenue Breakdown Total 500 127.4 $0.25
E-commerce Retailers of Top 500 E-
commerce Retailers
Note: Internet Retailer Top 500 Guide, William Blair and Co, Expert analysis
22
23. Generally, building the right product and marketing it well are
the key factors for a successful retail business
Retail Success Factors
Building Great “Retail Product” Marketing This “Retail Product” Well
Description • What you sell. Sourcing the right products, • Outbound marketing (e.g., media buying,
based on customer demand marketing partnerships, affiliate prog)
• How you sell it. Choosing the appropriate • Inbound marketing (e.g., SEO)
business / pricing model
• Incentives for referrals
• Building strong brand
• Overall customer experience (including any • Incentives for loyalty (i.e., repeat purchase)
entertainment value)
Goals • Drive higher conversion rates on new traffic • Drive new organic and inorganic traffic
• Drive organic referrals and organic loyalty via • Drive inorganic referrals
excellent customer experience
• Drive inorganic loyalty
Key Steps
Involved
23
24. Different business models employ different strategies along each
step, some of which are generalizable
Branding / Sourcing / Store Layout and Customer Customer
Business Model Merchandising Presentation Acquisition Retention
Group • Heavily market • Large sales teams • Simplistic, focuses • Affiliate programs • Email programs
Buying discounts working with local on deal of the day • Pay heavily for
merchants customer
acquisition
Flash Sales • Exclusivity / • Source remnant • Layout not focused • Content marketing • Email programs
membership club inventory from top on category/search • Referral programs • Referral programs
• Heavily market brands • Affiliate programs (stored credit)
discounts • Use of celebrities (OS)
Subscription • Curation, • Curators source • User quizzes for • Use of celebrities • Heavy email
convenience, indie goods personalization (ShoeDazzle) program
and/or sampling • Free goods for • Naturally retains
trialing
Online • Charity-focused • Unsophistcated • Inspiration board • Affiliate programs • Email programs
Brands (Warby Parker) manufacturing (Betabrand) • Referral programs • Sales and offers
• Sales and offers
Social • Design-rich, next- • Mostly affiliate • Pinboard layout of • Sharing is easy and • Gamification
Bookmarking gen browsing (crowd-sourced) top-rated SKU’s natural (Lockerz)
experience • Standalone value of • High entertainment
creating wish lists value (browsing)
24
25. There are several shopping needs that e-commerce companies
have still had trouble filling to-date
Description E-commerce Progress
Instant • Consumers often want to receive (and • Amazon Prime two-day shipping
Gratification/ perhaps consume) purchased products
Immediacy immediately after transacting
• Consumers often need to “touch a • Birchbox and other sampling sites
Sensory Experience
fabric, smell a cologne, or sample food” (low-cost sampling)
/ Sampling
before buying
• Free, easy returns (e.g., Zappos,
TrunkClub)
• For some categories, product education • TrunkClub personal stylist
Education /
and/or personalized selling is the norm
Personalized Selling • Heavy editorial and/or video
(e.g., cars, TV sets, make-up)
(e.g., Lot18, Jetsetter)
Note: Harvard Business Knowledge: “Retailing Revolution,” Oct 2011 (http://hbswk.hbs.edu/item/6813.html?wknews=10122011)
25
27. The group buying / couponing space has lost a bit of its luster
• Groupon and LivingSocial were frontrunners into the daily deals space, spurring scores of copycats and niche
competitors
• However, in its third year now, the group buying industry is facing rising disenchantment, both from
customers and merchants
– Merchants complain that the long-term economics of doing group buying is not favorable, as Groupon
does little for customer retention
– Customers buying impulsively often don’t end up using the coupons, resulting in ~20% breakage upon
expiry
– Some customers buy and sell in second-hand markets, but 75% either breakeven or lose money on
these deals
• As a result of customer disenchantment, daily deals sites have struggled to organically retain customers, and
many have spent enormous amounts on customer acquisition and are now struggling with profitability
• According to Yipit, one-third of tracked daily-deal sites (170 of 530) have been shut down or sold so far in
2011 (including the #3 player, BuyWithMe, selling to Gilt); larger companies’ efforts have fared even worse
– Facebook launched a daily deals service in April, only to shut down in August
– Yelp slashed its daily deals product team by half in August, citing users being unhappy with Yelp Deals
– Foursquare has opted not to get into the daily deals business, but rather to partner with larger players
like Groupon and LivingSocial
Source: http://online.wsj.com/article/SB10001424053111904491704576575233025971542.html
27
28. Groupon and LivingSocial’s lead seems to be expanding, as the
rest of the pack can’t match customer acquisition spending
Source: http://www.readwriteweb.com/archives/over_1_billion_in_daily_deal_value_has_disappeared.php
28
29. Customers have become disenchanted with daily deals, buying
on impulse then often not using the coupons
• Based on a survey by CityDeals, 20% of
purchased deals go unused before
expiring
• Some customers attempt to sell unwanted
deals purchased on impulse, with only
25% making a profit
– 34% sell at a loss, which likely
shapes the customer to become
more disciplined about daily deal
purchases or quit altogether
Source: http://www.readwriteweb.com/archives/over_1_billion_in_daily_deal_value_has_disappeared.php
29
30. The cost of customer acquisition has skyrocketed (and ARPU
declined) as the daily deal has struggled to attract and retain
customers
Source: (1) http://online.wsj.com/article/SB10001424053111904491704576575233025971542.html;
(2) http://online.wsj.com/article/SB10001424053111904563904576589132713012682.html
30
31. JungleCents is an e-commerce coupon company, selling
vouchers and helping customers discover new retailers
Representative Partner Retailer Economics per • JungleCents is a Groupon for e-commerce gift
Transaction (e.g., Bonobos) certificates
$ – Bonobos has run a recurring promotion on
JungleCents (distributed on AskMen),
200
allowing users to pay $48 for a $100
Bonobos voucher
150 – Only e-commerce retailers expecting very
100 5 high uplift (90%+) will be profitable in
48*** these deals
100 190* – Note: sample economics for partner
retailers is shown to the left
133
50 90** • As of late Nov 2011, JungleCents had 2.2M
registered users
0 • Raised $1.5M in seed money from Mark Cuban
Total Voucher Retailer COGS**** Gross in October 2010
Transaction Value Net Margin
Value Revenue
Notes: * Assuming 90% uplift over voucher value (mirroring traditional high-end retailer gift card uplift); ** Out-of-pocket payment by
customer; *** Voucher price (assuming JungleCents takes no transaction fee currently); **** Assuming COGS = 70% of basket price
Source: (1) Josh’s analysis and assumptions; (2) http://techcrunch.com/2010/10/22/mark-cuban-junglecents/
(3) http://techcrunch.com/2011/11/30/startups-investing-and-daily-deals-five-questions-with-mark-cuban/
31
33. The flash sales model is under pressure on the supply side, as
remnant inventory levels are decreasing
• While today's flash sales leaders (e.g., Gilt, Hautelook, Vente Privee) have grown their businesses by selling
luxury retailers' remnant inventory, today they are looking to change business models as unsold inventory
supplies are lower
– Gilt and competitors rode the wave of obscenely high inventory levels during the recession (up to 10x normal levels,
according to a former executive of Nieman Marcus), but retailers have adjusted and inventory levels are going down
– Therefore, as flash sales supply is decreasing, supplies prices are increasing and flash sales discounts are decreasing (Gilt's
average discount has decreased from 70% to 40-50%, according to analyst reports)
• Despite the headwinds, flash sale sites continue to raise large amounts of venture money at high valuations
– Beyond the Rack raised $37M in Nov 2011, Gilt raised $138M in May, and Ideeli raised $41M
– Moreover, Vente Privee (European flash sales leader) just announced plans to enter the U.S. in a JV with American Express
(licensing the Vente Privee brand to the JV and using American Express’s large customer list as an acquisition channel)
• Gilt and others have been shifting vendor mix away from luxury brands towards indie brands
– Moreover, Gilt has begun to leverage its strong brand to sell full-priced products in the U.S., departing from sourcing
remnant inventory in its latest property, Park & Bond
– While the U.S. fashion flash sales supply might be saturated, Gilt is still expanding this model to 90+ countries
internationally, as well as to new categories (e.g., newly launched Gilt Home to compete with OKL)
Source: (1) http://www.businessinsider.com/vente-prive-is-going-after-the-50-billion-us-remnant-inventory-market-2011-9
(2) http://techcrunch.com/2011/11/08/gilt-goes-global-expands-flash-sales-site-to-over-90-countries/
(3) http://techcrunch.com/2011/11/09/flash-sales-site-and-gilt-competitor-beyond-the-rack-raises-37-million/
(4) http://www.reuters.com/article/2011/10/17/us-flashsales-idUSTRE79G41X20111017
(5) http://techcrunch.com/2011/10/18/gilt-groupe-debuts-new-home-focused-retail-and-curated-content-site-to-take-on-one-kings-lane/
33
34. However, the flash sales model is still popular on the demand-
side, and fairly consistently across income levels too …
Monthly Market Share of Flash Sale Sites Flash Sale Sites’ Visitor Share by
(over All Sites, as of August 9, 2011) Household Income*
100%
14% >$150k
90%
80% 16% $100-150k
70%
60%
27% $60-100k
50%
40%
30% 25% $30-60k
20%
10% 17% <$30k
0%
Notes: * Rolling 4 weeks ending August 6, 2011
Source: Experian Hitwise, August 2011 (http://weblogs.hitwise.com/heather-dougherty/2011/08/huge_growth_continues_for_flas_1.html)
34
35. … and there is still plenty of start-up activity around flash sales
and other discounted e-commerce models
• From a customer standpoint, flash sale and daily deal sites provide several key customer value propositions:
– Discounts. Buying, then marketing and selling remnant inventory is one way to offer customers
discounts, but flash sites are also helping brands (primarily indie brands) get discovered by offering
select products at discount
– Curation. The dearth of SKU's in many early-stage flash sale sites helped them brand themselves as
curators – every SKU seemed hand-picked to the customer. To this end, flash sale sites (more than
traditional e-commerce sites) have focused their marketing on expert curation
– Exclusivity. While most flash sale sites are no longer exclusive, the urgency and limited supply of deals
offered still contribute to the exclusivity nature of their brands
• As a result, several start-ups have emerged in non-fashion categories with a similar feel to flash sale sites, but
not necessarily sourcing remnant inventory
– Lot18, for example, sells discounted wine online (which isn't new), but tries to brand itself as an expert
curator with top-notch editorial content along with its deals
• Several others have taken other approaches to offer these value propositions
– Fab.com launched a flash sales site branding itself around the theme of design, selling any number of
product categories, mostly from small brands and designers. They focus heavily on curation, but also
bring the discount and exclusivity element
– OpenSky recently pivoted to become a flash sales site relying on celebrities as expert curators (and
marketers) of discounted products (but not necessarily remnant inventory)
35
36. Flash sales e-commerce has contributed several customer
acquisition best practices to the e-commerce ecosystem
• Traditionally, e-commerce e-mail programs were seen as spammy
Email Programs
• However, given the “daily” nature of flash deals, consumers began to accept well-
crafted daily emails from flash and daily deal sites
• Other e-commerce sites have begun using content-filled email programs (e.g., Etsy)
• Excellent editorial, photography, and videos are being used in blog forms to attract
“Content and
and retain customers, pointing them to products
Commerce”
• Flash sales sites like Net-a-Porter and Gilt are bringing “content and commerce” to
the forefront as a key customer acquisition tool
• One Kings Lane, Lot18, Birchbox, and Etsy are just a few other companies building
out heavy content programs
• Flash sales took off as social media sharing features were becoming mainstream, and
Referral Programs made inviting friends to an e-commerce membership easy
• Along with flash sales’ belief in high lifetime value (retaining customers with email
and content programs), many offer credit discounts to members who successfully
invite friends to join as members
Source: http://www.quora.com/Why-is-e-commerce-such-a-hot-area-in-venture-capital-now
36
37. Fab is a flash sales site that has grown quickly, selling several
categories of products along one theme: design
• Fab is a design-based flash sales site that has
grown quickly
– Pivoted from gay social network, Fabulis, which
had 350k users
– In 3-4 months, Fab has reached 650k registered
users and estimated ~$10M gross revenue (at
1.2M users by Dec ’11)
• Unlike other flash sales ventures, Fab doesn’t
just apply the business model to a few new
product categories (a la OKL, Lot18, Gilt Taste)
– Instead, Fab has chosen a trendy them, design
– Fab sells any category of product as long as the
product fits its design theme
– Customers with an interest in this trend / theme
can buy all of items here
• In August 2011, Fab raised a $8M Series A led by
Menlo Ventures
Source: (1) Josh’s analysis and assumptions
(2) Fab CEO blog (http://betashop.com/post/10657024333/115-days-650-000-members-100-000-orders-200-000)
(3) http://betashop.com/post/8993831254/fab-com-further-integrates-social-commerce-with
(4) http://venturebeat.com/2011/12/08/fab-com-40m-series-b/
37
38. Hotel Tonight is essentially a last-minute flash sale for hotel
remnant inventory, only available on mobile phone
• Hotel Tonight curates same-day hotel inventory sold to
consumers for discounts
– Focused on a simple mobile booking experience, booking
"basic," "elegant," or "hip" hotels on the go
– Claims that the average account set-up takes 80 taps (vs.
300 on PC's) and 4 taps for subsequent reservations (vs. 100
on PC's)
– Expedia estimates that 60% of mobile bookings are same-
day (80% for Hotwire)
• The company was operating in 23 markets as of late Sept
2011, and just added 14 new markets
– 750,000 downloads as of late Sept 2011
• Unlike hard goods retail (e.g., fashion, home goods),
hotel remnant inventory is very difficult to control and
limit (no variation in "production" as in hard goods)
• Raised $3.25M from Battery, Sequoia, and First Round
Source: (1) http://allthingsd.com/20110510/hoteltonight-raises-2-25-million-for-last-minute-hotel-booking-app/
(2) http://techcrunch.com/2010/12/20/hotel-tonight-fulfills-some-of-paul-carrs-fantasies-actually-safe-for-work/
(3) http://gigaom.com/2011/09/29/hotel-tonight-looks-beyond-biz-travelers-to-vacations/
(4) http://venturebeat.com/2011/11/16/hoteltonight-calls-room-service-orders-up-8-6-million-series-b/
38
39. oBaz is a crowdsourced haggling service, allowing users to
specify demand then offering a group buying model
• oBaz is a crowdsourced haggling service,
allowing users to vote on products they like
– oBaz then negotiates prices with
vendors once 25 votes have been cast
• oBaz also created a feature called Aisles,
which is similar to OpenSky
– Each aisle is a category (e.g., parents,
musicians, chefs, students) and expert
curators find flash deals (although not
celebrity)
• Raised a seed round from Lightbank in July
2011
Source: http://techcrunch.com/2011/11/09/lightbank-backed-haggling-platform-obaz-shifts-focus-to-product-discovery-and-curation/
39
40. Blippy pivoted earlier this year to Heartsy.me, a flash sales site
for artisanal goods
• Heartsy is a flash sales site for artisanal
goods, selling products similar to those
on Etsy
• Retailing artisanal goods is not an easy
business
– Etsy has thousands of SKU’s and
doesn’t have to take inventory risk by
predicting demand for any given SKU
– Most of Etsy products are sold in small
batch sizes
– Heartsy, on the other hand, has a
limited number of “longtail” SKU’s
• Traction appears to be slow, as
Heartsy’s Twitter and Facebook
followings are quite small
Source: http://techcrunch.com/2011/07/05/blippys-new-direction-daily-deals-for-artisanal-goods-at-heartsy-me
40
42. While subscription e-commerce has received hype, the jury’s
still out on whether these businesses are sustainable
• Subscription e-commerce has existed for years, often in the form of crude of-the-month clubs (e.g.,
beermonthclub.com, wineofthemonthclub.com), but many start-ups have built next-generation versions of
these businesses in the last few years
– ShoeDazzle, Justfab, and Beachmint have scaled the fastest, shipping fashion goods monthly to paid subscribers and
mobilizing through partnerships with celebrities
– Following ShoeDazzle's buzz, other start-ups have copied the model for other categories, with mixed success (Manpacks,
Guyhaus, Babbabox, Foodzie, etc)
– Companies like Birchbox have received a lot of buzz by offering curated samples on a subscription basis
• The model has some clear benefits on both the supply and demand sides …
– E-commerce companies are attracted to the subscription model, as ARPU is much stabler and generally larger than
selling one-off products. Customer retention efforts are minimized
– Subscription e-commerce also offers several benefits to customers, including curation, the convenience of less time-
spent shopping, and the ability to trial products (for some companies)
• … but how churn rates will trend after the initial hype wears off will depend on whether or not subscription
e-commerce provides enough value proposition to customers
– Past offline subscription commerce programs have often been labeled as marketing scams and ended over time as churn
increased (e.g., BMG Music 12 for one CD deals)
• Subscription-focused e-commerce start-ups will soon have to face the question: is the subscription model
engaging enough to build scalable businesses, or simply a feature and/or pricing scheme?
42
43. Subscription e-commerce offers consumers one or more of
several benefits
Benefits Description Analysis
• For consumers who want someone else • Price at premium – caters to wealthier customers
to tell them what they want willing to pay a premium for curation service
Curation
• Beer clubs have been doing this for • Often requires a well-respected / branded curation
years team (e.g., celebrities, topic influencers,
crowdsourced, in-house team)
• ShoeDazzle brought this model into the
limelight • Only sustainable for product categories that users
buy constantly (else churn will be high)
• Best suited for fragmented industries with indie
brands
• For consumers who want someone • Pricing across the board, curation not as important
else to shop for them out of
Convenience • Best suited for “need” products (vs. “want”)
convenience
• Only sustainable for “fast-moving” product
• Manpacks and Guy Haus promise to
categories that constantly need to be replaced
save customers time by mailing basic
(else churn will be high)
things
• For consumers who want to sample • Pricing across the board - can even go free
products cheaply before they buy
Trial / Sampling • Curation is not required but helpful
• Birchbox brought this model into the
• Only sustainable for product categories with
limelight
fragmented set of brands
Source: http://robgo.org/2011/08/27/what-will-the-big-winners-in-subscription-commerce-look-like/
43
44. The most popular subscription e-commerce sites can be
mapped by demo and size
Source: http://socialcommercetoday.com/subscription-commerce-the-infographic/
44
45. ShoeDazzle was a frontrunner in the subscription e-commerce
space, leveraging celebrity influence as a “curator”
• Shopper buys one pair of shoes, then
begins to pay $39.95 / mo
• ShoeDazzle’s monthly plan creates a
sense of customer loyalty / stickiness
– Each month, ShoeDazzle
recommends 5 pairs of shoes for the
buyer and the buyer picks one
– If the buyer rejects all 5, she can elect
not to pay for that month
– Shipping is free
• Co-founder is Kim Kardashian
– Has raised $60M from Andreessen
Horowitz, Lightspeed, and Polaris
Source: http://venturebeat.com/2010/04/27/shoedazzle-raises-13m-as-kim-kardashian-hawks-its-footwear/?obref=obnetwork
45
46. Justfab and Beachmint have also taken the celebrity-curation
subscription model, with more emphasis on new categories
• Justfab is a direct competitor to ShoeDazzle, featuring
TV star Kimora Lee Simmons (President and Creative
Director)
– As of Sept 2011, grossing monthly revenue of
$3M (vs. $500k from Sept 2010), with 3M
registered members
– Planning to expand into new categories with
celebrities
– Raised $62M from Matrix, TCV, others
• Beachmint is another competitor, which has launched
Jewelmint (Kate Bosworth), Stylemint (Olsen twins), and
BeautyMint (Jessica Simpson)
Justfab Membership – As of June 2011, grossing monthly revenue of
$500k. ShoeDazzle was grossing $5M
Gross Revenue (monthly) $ 3,000,000
– Beachmint launched a live video channel on
# of Members 3,000,000
Facebook for Cyber Monday 2011, with celebrities
Monthly Revenue / Customer $ 40.00
discussing products in a direct-response TV
# of Subscribing Customers 75,000 format. This garnered more than 50k viewers
Customers as % of Members 2.5% – Beautymint garnered 500k visitors on first day
Source: (1) http://techcrunch.com/2011/09/21/gilt-groupe-investor-matrix-partners-leads-33m-round-in-fashion-retail-and-styling-platform-
justfabulous/
(2) http://techcrunch.com/2011/11/29/beachmints-celeb-filled-cyber-monday-draws-over-50000-viewers-with-help-from-rtoz/
46
47. Babbaco is a subscription site for kids educational products
Description Investment Thesis
• Babbaco sends a monthly “Babbabox” with a “fun & • Offers curation and convenience benefits to
enriching” experience for 3-6 year olds customers
• They charge parents $30/mo for a box with 4 ‒ Curation: building trust as a curator with a
components (plus a surprise gift for parents): familial brand, products fitting for monthly
purchase, very fragmented industry
– Create: 3-4 projects
– Explore: “activities to engage with the world and ‒ Convenience: helps busy parents save time
nature” from buying “essential” products
– Story Tell: related books and stories
• Strong founder (Jessica Kim, Kellogg MBA, former
– Digital: related software BM at Kraft) who is branding the site with her name
to build a familial brand
• Each box contains a different theme (e.g., bugs)
• Raised $1.2M Series A round in August 2011 from
– Kiwicrate and Little Passports are competitors
Lightbank, SV Angel, and Nextview
Source: (1) http://thefamilyroom.marthastewart.com/2011/10/04/instant-entertainment-comes-in-a-box/
(2) http://robgo.org/2011/08/27/what-will-the-big-winners-in-subscription-commerce-look-like/
47
48. H.Bloom is a subscription site for kids educational products
• H.Bloom brands itself as “subscribing to happiness”
by getting frequent deliveries of luxurious yet
affordable flowers
‒ Curation: floral arrangements prepared by
“professional designers,” sourced directly from
professional growers
‒ Convenience: frequent, automatic delivery of
flowers
• There is some question over whether or not this is a
valuable service – flowers are a disposable good and
often consumed as surprise gifts, not as frequent
purchases
• Has raised $8M in funding from Battery, Brian Lee,
and Anton Levy
Source: (1) http://techcrunch.com/2011/09/07/battery-leads-4-7m-round-in-floral-delivery-service-h-bloom/
48
49. Blissmobox is a subscription site for organic / health goods, with
a flash sales arm as well
• Blissmobox (subscription e-commerce site) is
a product of Blissmo, a flash sales site for
organic / sustainable products
‒ Monthly subscription price is $19, on
boxes with retail value $30+ (33%+
savings)
‒ Doing both flash sales and subscription
enables trials to convert to purchases
• Organic / health goods are a very fragmented
industry where indie brands are valued
• No reported fundraising
• Eco-Emi is a small competitor
Source: http://www.springwise.com/eco_sustainability/environmentally-socially-responsible-products-monthly-curated-box/
49
50. Quarterly.co allows users to pick “contributors” (influencers)
they want to receive gifts from each quarter
• Quarterly.co is a subscription service akin to OpenSky in flash sales
‒ Allows users to select “contributors” they’d like to receive gifts
from
‒ Contributors choose gifts they’d like to send out (and probably
get a cut of subscription revenues)
‒ Users get a gift once every 3 months
• Founder and President was editor-in-chief at GOOD Magazine for 5
years
• Based in West Hollywood, no reported fundraising
• Not Another Bill (UK) also sends monthly gifts (very random and fun
products) sourced from around the world, but curated by the site
owner only
Source: (1) http://www.fastcodesign.com/1665114/for-25-quarterlyco-delivers-designer-curated-gifts
(2) http://www.springwise.com/retail/notanotherbill/
50
51. MeUndies is a premium underwear company based in Beverly
Hills
• MeUndies sells
premium underwear
• Prior to launch, they
have as many Twitter
followers as Manpacks
• No reported
fundraising
Source: Meundies.com
51
52. Companies like Birchbox have seized the opportunity to package
samples (sourced at no cost) into subscription programs
• Sampling is a more economically enticing model of subscription e-commerce, as companies typically face no
COGS and can potentially be paid on both sides (brands pay for sample distribution and consumers pay for
products)
– Operating profit margins are in the 25% range for a representative early-stage company in this space
(<10k customers), and they project margins to increase to 30-40% as the company scales (assuming
little advertising spend)
– Costs primarily reside in SG&A, outsourced warehousing and logistics, salaries, etc.
• Vendors often have un-distributed trial inventory (some estimates believe this is 90%+), so companies like
Birchbox are desirable partners
– Historically, samples are distributed in retail stores (for free or sold), through the mail (e.g., with Sunday newspapers), or
other channels (e.g., hotels)
– Online distribution of samples has yet to scale
• While vendors desire that sampling results in full-sized product purchases, they also value customer
feedback, which Birchbox aims to offer but to a limit (voluntary user surveys, user preferences, etc)
52
53. Birchbox is one of the best publicized subscription e-commerce
companies
Trial Research Purchase
• $10/month subscription • Read experts’ makeup advice • Buy high-end makeup from
established brands and niche
• Receive box of 4-5 items per • See bios and videos of niche brands
month high-end brands
53
54. Birchbox has built an operating system …
Brands Birchbox.com Consumers
Samples Samples
Receiving
User Monthly
and Re-package
Subscription Shipping
Storage
Products Products
Receiving
Transaction Prepare
and Shipping
(User Buys) packaging
Storage
Mkt
Materials Research
In-house editors In-house editors
ingest brand publish editorial
marketing materials content
$$$ $$$
54
55. … that delivers on its customer promise
Customers
Beauty Brands Consumers
• Effective channel to reach consumers via • Discover new niche brands
Customer samples
Promise • “Delightful” shopping
• Serve as e-commerce sales channel
• Convenient access to purchase
• Collect customer data (e.g., trial-to-buy
conversion)
• Attractive packaging (brand-building) • Curate large and niche brands / SKUs
How BirchBox
• Acquire customers (“consumers”) for • Premium editorial content on-site
OS Delivers brands to ship sample to
• In-house team packages “surprise”
• Quick delivery via outsourced inventory package
holding and shipping
• E-commerce site for easy purchase
• E-commerce system automatically
calculates important customer data
55
56. And there are plenty more, many of which will never scale …
Beauty, Clothing, Accessories Other
• Amarya (UK) • LuxeBox (CA) Culture and Arts
• Boudoir Privé (UK) • Razwar (DE) • Just the Right Book (book club)
• Bread&Butter (CA) (skincare) • Hoseanna (pantyhose) • Papirmasse (small art prints)
• Facekitt • Manpacks (underwear) • Stack Magazines (print magazines)
• FeelUnique (UK) • Me Undies (premium underwear) • Totapress (greeting cards)
• GlossyBox (UK) • Panty by Post (CA) (underwear) • WeeklyIndie (mp3s)
• Glymm • Swag of the Month (apparel)
• Guy Haus (men’s face care) • Stylistpick (UK) (shoes) Parenting
• Hiskit (men’s face care) • The Under Shirt Club • Citrus Lane (healthy baby products)
• Little Passports (toy kits by country)
Food & Drink Subscription to One-Off SKU’s
• Amazon
• CandyJapan (Japanese candy) • Foodzie (health foods)
• Alice
• Chocs (chocolate) • Graze (UK) (health foods)
• HotelChocolat (chocolate) • Healthy Surprise (health foods)
Other
• Martins (chocolate) • PaleoPax (health foods)
• Jangneus (kitchen cloths)
• Able & Cole (UK) (fresh veggies) • Dulcinea (baked goods)
• The Fruit Guys (fresh fruit) • Craft Coffee (artisan coffee)
• Full Circle (fresh fruit / veggies) • Eightpointnine (artisan coffee)
• Farm Fresh to You (organic • Steepster Select (tea)
produce) • Toys 4 Tails (dog toys)
Source: (1) http://socialcommercetoday.com/subscription-commerce-the-infographic/
(2) http://socialcommercetoday.com/directory-of-subscription-commerce-clubs-subcom/
56
58. C2C marketplaces have become a popular start-up model
recently, led by niche sites like AirBnB
• Online C2C marketplaces can be broadly segmented into three buckets: hard good purchases (e.g., eBay),
hard good rentals (AirBnB), and services (Skillshare)
‒ Traditionally, eBay is the preeminent online marketplace and facilitated transactions on hard good
purchases. Direct competitors threatened eBay for the general merchandise market, while niche
players like Etsy targeted hand-crafted goods and expanded to tangential categories
‒ Meanwhile, Craigslist has traditionally served as the go-to portal for consumers looking for hard good
rentals and services online (and to some extent, hard good purchases), but without facilitating
transactions
‒ However, lately, niche players have risen up to make monetizable businesses out of Craisglist use cases
(e.g., AirBnB for temporary housing, OKCupid for personals, TaskRabbit for errands, Skillshare for
lessons, etc)
• Traditional models of online marketplaces (or intermediate solutions like Craigslist) leave many unmet needs
on the table, which these start-ups are tackling but few have perfected
‒ Hard good purchases: seller’s time spent uploading product information, trust in sellers shipping on-
time (or at all), inaccurate representation of product quality / condition
‒ Hard good rentals: safety / trust in both buyers and sellers, ease of working with insurance companies,
true need for rental across multiple geographies (e.g., Uber is only useful in certain large cities)
‒ Services: safety and trust in sellers, ability of relationships to be taken offline after initial transaction
58