Digitization creates a wealth of opportunities for retailers and businesses to influence consumers, reinforce a persuasive value proposition, and provide customer experience to motivate repeated purchase. The question is are businesses leveraging digitization to grow their business and generate additional revenues?
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It's Time for E-Commerce to Grow: Developing an E-commerce Strategy & Managing Transformations by Maha Rashad from Simon Kutcher & Partners
1. www.simon-kucher.com
Developing an E-commerce Strategy & Managing
Transformation
It's Time for E-Commerce to Grow
September 2019
Cairo office
ICONIA Building
16 Mohamed Thakeb St.
11211 Zamalek, Cairo
Egypt
Tel. +20 100 4694209
cairo@simon-kucher.com
2. Source: Simon-Kucher
Developing an Omni-Chanel strategy..
Focus on selling, not
technological sophistication
Think Value not priceThink Customer not
product
Structured Value basedPersonalized
Tailored Demand basedDynamic
E-CommerceSummit2019.pptx 2
3. Source: Simon-Kucher
Developing an Omni-Chanel strategy..
Focus on Selling, not
Technological Sophistication
Think Value not PriceThink Customer not
Product
Structured Value basedPersonalized
Tailored Demand basedDynamic
E-CommerceSummit2019.pptx 3
4. Source: Simon-Kucher & Partners
Think Customer
Own the customer relationship, from push to pull
VS
Customer
Channels
Product
Product & service
Channels
Customer
E-CommerceSummit2019.pptx 4
5. Follow the pattern
People do change the way they buy
2010's
E-commerce driven
Customer
I need a
vacuum
cleaner
Digital channels
Home delivery
2000's
Digital media driven
Customer
I need a
vacuum
cleaner
Digital media
Store
2020's
Automation driven
Home delivery
Sensor
Ehm,
ok...Your
house is
a mess
AI
Direct online sales
Data-driven sales
Subscription
ecommerce
Access over
ownership
On demand
E-CommerceSummit2019.pptx 5
6. Technology is enabling Data- driven selling
Are you taking advantage?
"The question is, how do
you get a deep
understanding of your
customers? There’s
good news on that for
sales professionals of
today.
Within five years,
basically every
salesperson will have an
intelligent assistant that
will use intimate
computing to deliver rich
context around every step
of the sales process, from
initial contact to closing."
– Peter Schwartz
SVP Strategic planning
Sales Force
E-CommerceSummit2019.pptx 6
7. Source: Simon-Kucher & Partners
Know Your Customer
Is the key to delivering the right proposition
Old world:
Traditional Record
Name Phone
Email Company
Twitter Facebook
New world:
Subscriber Identity Record
Purchases Payment history
Products Refund history
Local Pricing Lifetime Value Customer Moments
Promotions Renewal Value Usage metrics
Adjustments Aging balance Add-Ons
E-CommerceSummit2019.pptx 7
8. Example: Chatbots – personalized offers based on user information
Source: Lufthansa, Mastercard, Radisson, Simon-Kucher & Partners
Other companies are..
Use Big Data and AI to make relevant offers
Provides purchase
history and makes
contextual offers
Example
Find lowest-priced
flight connections
Serves as personal
concierge during
stay
E-CommerceSummit2019.pptx 8
9. E/-DC = E-/Digital Commerce, CSIM = Customer service and interaction management, CRM = Customer Relationship Management, SFA = Sales Force Automation, PO&M = Price
Optimisation & Management, CPQ = Configure, Price, Quote, MA = Marketing Automation, SPM = Sales Performance Mgmt.
There is a wide mix of applications that can support
sales through software
Vendor list not exhaustive
CRM
SPM
MA
Cloud for sales
CPQ
PO&M
3
6
7
8
5
SFA4
CSIM2
E-/DC1
SFA capabilities often included in
CRM solutions
E-CommerceSummit2019.pptx 9
10. Source: Simon-Kucher
Developing an Omni-Chanel strategy..
Focus on Selling, not
Technological Sophistication
Think Value not priceThink Customer not
Product
Structured Value basedPersonalized
Tailored Demand basedDynamic
E-CommerceSummit2019.pptx 10
11. Digitalization is not an IT project
)
Technology is just the
enabler for …
New revenue
generating
opportunities
Technology + product +
channel + customer
relationship = success
in the digital world
E-CommerceSummit2019.pptx 11
12. Loyalty
CRM
Source: Simon-Kucher & Partners
Rethink the customer journey, learn from B2C leaders
6
1. Awareness
Product
Web
Price
Referral
SMO
PPC
1
2
2. Consideration
Product
Web
Price
3
3. Conversion
Price
Web Product
4
4. Upsell
Price
Promo
CRM
5
5. Re-sell
6. Recognition &
Personalization
7. Retention
Retain offer
CRM
7
Digital channels
Customer
1 Journey (stages)
Travel industry:
Customer journey for a travel product
has a wide range of digital channels
E-CommerceSummit2019.pptx 12
13. Reinvent
Business
Model
Source: Simon-Kucher & Partners
Digitalization framework (full format)
Build
Digital
Foundation
Develop
customer-
centric
digital
approach
Define Digital Vision
Market & competitive
assessment
Digital capability assessment
Goals alignment for digitalization
Digital strategy formulation
Business model transformation
strategy
Market disruption strategy
Competitive response strategy
Change Management Plan
Digital quality management
(DQM)
Deliver Highest Value Digital Offerings
Customer co-creation/customer journey
mapping
Data-driven Design to Value (D2V)
Social sentiment analysis/gamification analysis
Hyper-personalization/value-based
segmentation
Big Data, IoT and XaaS strategy
Monetization model and pricing
Value communication strategy
Customize Go-to-Market Strategy
Digital demand generation
Omnichannel integration plan
Sales enablement (incentives/digital apps/value
selling)
Digital sales dialogue optimization - A/B Test and
learn strategy
Digital CLV optimization
Digital Cross-sell/Up-sell and promotions tools
Digital CRM solutions/loyalty/referral/promo
programs
Enable Supporting Functions:
Develop agile/cross-functional digital processes
Privacy compliance tracking
Revenue recognition and forecasting
Digital governance procedures
Digital performance measurement
Build IT Infrastructure
Digital data management architecture
Digital data map and migration
Tools/applications/software requirements and
vendor selection
Digital partner network/ecosystem development
Ops, Finance & Legal
E-CommerceSummit2019.pptx 13
14. Source: https://www.pcmag.com/article2/0,2817,2493418,00.asp,https://www.digitalturbine.com/blog/a-case-study-in-user-acquisition-walmart-app-vs-amazon-app/,https://digit.hbs.org/submission/and-the-next-big-thing-in-retail-is-wal-mart/
Walmart built out a sophisticated in-store and online digital
footprint to avoid disruption and compete with Amazon
BUSINESS OVERVIEW
Industry: Consumer Goods / Retail
Company profile:
Leading multinational retail corporation that operates >6,000 stores internationally
with USD482.5bn in 2016
Launched WalmartLabs in 2011 as a spin-off division dedicated to developing
transformative digital initiatives to help Walmart compete in the digital era
Situation:
Walmart was the dominant player in American retail for decades, but the firm
faced existential threats from the emergence of e-commerce giants like Amazon
Stayed competitive in the digital era by focusing heavily on e-commerce
DIGITAL TRANSFORMATION
Digital business model:
Substantially upgraded its e-commerce capabilities to better match key
competitors' online presences and by acquiring e-tailer Jet.com in 2016
In-store digitalization (e.g. "Saving's Catcher" app allows customers to compare
prices of in-store products against competitors)
Rapidly growing "Walmart Exchange" is a digital advertisement platform that uses
both online and in-store data (which Amazon and Google cannot provide)
Impact
Online sales grew by 64% in Q2 2017 to USD15bn; on track for 35bn by 2018
iStock_hakule
E-CommerceSummit2019.pptx 14
15. Source: Simon-Kucher
Developing an Omni-Chanel strategy..
Focus on Selling, not
Technological Sophistication
Think Value not priceThink Customer not
Product
Structured Value basedPersonalized
Tailored Demand basedDynamic
E-CommerceSummit2019.pptx 15
16. Digitalization has a fierce impact of how customers
perceive your value
More complex products and services to meet client’s demands
New entrants with alternative offerings, unconventional business models,
and lower prices
Accelerated commoditization and substitution
Greater market transparency and growing customer procurement
capabilities
Shift control of the buying process towards customers
E-CommerceSummit2019.pptx 16
17. Source: Simon-Kucher & Partners
Equip sales for their value selling role; relevant in both
the analogue and digital world
From To
1 Explore customer
value drivers
Inside-out, make
presentations
Outside-in, ask
questions
2 Quantify your value
proposition
Product push, talk
features
Pull requirements,
quantify impact
3 Price the value you
deliver
Cost-plus Value-minus
4 Offer pricing options
& alternatives
Sell what we can make,
one-size-fits-all
Offer what we can sell,
options & anchors
5 Sell conditionally,
tit-for-tat
Discount if required Concession if required
Project Example
E-CommerceSummit2019.pptx 17
18. Source: Simon-Kucher & Partners analysis; Quantitative survey November 2011; n (DE) =308
Map your competitve advantage
and deliver maximum value
1 2
3
4
5
6
7
8
9
10
11
12
13
1415
0
1
2
Importance of value drivers
Relative importance
Payment methods
Shipping time
Availability
Usability
Ease of return
Ease of delivery
Return time
Reputation
Rewards
Broad assortment
Deep assortment
Recommendations
Extra services
Fun
Channels
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Relative performance Amazon/Otto
"We have everything and you know the
process works"
E-CommerceSummit2019.pptx 18
19. 0%
2%
4%
6%
8%
10%
12%
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
Source: Simon-Kucher project database (anonymized)
Best practice: Free shipping threshold
Shopping cart distribution including VAT (excluding shopping carts >150€)
Shopping cart level in €
(Maximum per category)
Share of shopping cart (in %)
Free shipping threshold
Simon-Kucher project example
E-CommerceSummit2019.pptx 19
20. The problem with limitless opportunities
in a digital age…?
Paralyzed by choice Run before we can walk
We can work together
To set clear direction based on focused investment
E-CommerceSummit2019.pptx 20
21. * If Limited, key steps of the digital transformation process are missing (for example, local, mobile, XaaS / cloud)
Source: Simon-Kucher & Partners
Our portfolio of digital solutions anticipates 4 primary
company scenarios
Companies Evaluating
Digitalization
Companies
Strategizing Digital
Excellence
$$
$
Companies Planning
(Full) Digital
Transformation
Companies Facing
Digital Attack
Profile The company is considering
taking the digital plunge, but
is unsure of where to start &
lacks alignment or clarity on
digital strategy and plan
Under assault by traditional
competitors or digital
disruptors, the company is
losing market share to digital
competitors and must act
fast.
The value of a digital solution
is understood across the
organization, with focus on
executing a full digital
transformation.
The organization has
identified a set of key digital
objectives, although
prioritization and ownership
of the digital strategy may be
blurred.
Phase Pre-digital Pre or (limited*) digital stage Pre or (limited*) digital stage (Limited*) digital stage
Goals Identify opportunities,
evaluate the business case
for digital, align the
organization and identify the
high level digital value
proposition
Create attack plan to counter
digital disruptors and identify
a clear roadmap to solidify
market position
Design, plan, and implement
an effective top-line
digitalization transformation
strategy
Develop digital strategy,
business model design and
commercialization plan for
specific focus areas
Our
Digital
Solutions
Start with Digital Assessment Rapid Digital Assessment;
Digital Attack Plan;
Digital Assessment, Digital
Strategy & Business Model
Design, Staged Rollout, and
KPI Measurement and Fine-
tuned Rollout
Digital Value Proposition,
Commercialization
Excellence; Omnichannel
Strategy and Expansion Plan
E-CommerceSummit2019.pptx 21
22. Source: Simon-Kucher & Partners
We worked with all these clients and more..
Marketplaces
US/DE/UK
Real estate platforms
DE/CH
Car platforms
CH
US
Job platforms
Horizontals
Others
Consumer applications
SMB solutions
Enterprise & IT solutions
Online Platform Business Software Business E-Commerce Business
Online retailer
Online + Offline retailer
E-CommerceSummit2019.pptx 22
23. Global presence
Common Slides.pptx
38 offices worldwide, >1,300 employees, $360m revenue in 2018
Egypt, Cairo
Africa Europe
Brazil, São Paulo
Canada, Toronto
Chile, Santiago
Mexico, Mexico City
USA, Atlanta
USA, Boston
USA, Chicago
USA, Mountain View
USA, New York
USA, San Francisco
Americas
Australia, Sydney
China, Beijing
China, Hong Kong
China, Shanghai
Japan, Tokyo
Singapore, Singapore
UAE, Dubai
Asia-Pacific/
Middle East
Austria, Vienna
Belgium, Brussels
Denmark, Copenhagen
France, Paris
Germany, Bonn
Germany, Cologne
Germany, Frankfurt
Germany, Hamburg
Germany, Munich
Italy, Milan
Luxembourg, Luxembourg
Netherlands, Amsterdam
Poland, Warsaw
Spain, Barcelona
Spain, Madrid
Sweden, Stockholm
Switzerland, Geneva
Switzerland, Zurich
Turkey, Istanbul
United Kingdom, London
23
24. COLOURBOX/Syda-Productions
Simon-Kucher in Egypt
Management Consultancy
iStock/ipopba
Solutions Development
We offer advice and implementation
support to companies across industries
and Government entities in our core
competency: Strategy, Marketing, Pricing
and Sales
Our service
Our commitment
Our ambition
We locally develop digital tools and
software solutions, that support Simon-
Kucher projects across the globe
Serve Egypt as a core market
Consultancy hub for African continent
Service center for all 38 offices across
the globe
Serve clients in all industries
We hire local Egyptian talent and train
them in our global development program
We hire local Egyptian talent and set a
global standard for digital tools
E-commerce Summit_Nudging Consumer Behavior_presentation 24
25. www.simon-kucher.com
Cairo office
ICONIA Building
16 Mohamed Thakeb St.
11211 Zamalek, Cairo
Egypt
Tel. +20 100 4694209
For further questions, please do not hesitate to contact
our local management
Thank you!
www.simon-kucher.com
Martin Janzen
Co-Managing Director
Tel: +20 100 050 2588
Tel: +49 173 53 81 981
martin.janzen@simon-kucher.com
www.simon-kucher.com
Sara Shenouda
Co-Managing Director
Tel: +20 100 170 1418
Tel: +49 176 198 43433
sara.shenouda@simon-kucher.com
www.simon-kucher.com
Maha Rashad
Business consultancy
Manager
Tel: +20 106717858
Maha.rashad@simon-kucher.com
www.simon-kucher.com