Maximize eCommerce Lift & Logistics ROI

MAXIMIZE ECOMMERCE LIFT &
LOGISTICS ROI

digital engagement solutions

Introduction

Speakers

Don Davis Alan Amling Brett Zucker
• Editor in Chief • VP of Marketing • Chief Technology Officer
• Internet Retailer • UPS Global • Bridgeline Digital
Logistics & Distribution


The Web Outpaces Stores

Consumers are shopping and researching more online

20%

15%

10%

Total retail
5%
E-commerce

0%
9

9

0

0

0

0

1

1

1

1

2
00

00

01

01

01

01

01

01

01

01

01
2

2

2

2

2

2

2

2

2

2

2
Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1
-5%

-10%
Source = U.S. Department of Commerce


More Growth Ahead

U.S. E-Retail sales

$400
$350
$300
$250
$200
$150 U.S. E-Retail Sales
$100
CAGR=13.3%
$50
$0
11

12

13

14

15

16
20

20

20

20

20

Source = eMarketer 20


And The Web Influences How They Shop in Stores

The sale increasingly starts long before they arrive

Source = NPD Group


Logistics Matter

Barriers to ordering online

Source = Alix Partners Home-Delivery Shopping Survey


Logistics Matter

What consumers want improved

Source = comScore, UPS


52% of Online Orders Shipped Free in Q4 2011

Order percentage w/ free shipping – Holiday 2011 v. 2010

70%
60%
50%
40%
30% 2010
20% 2011

10%
0%

Source = comScore


Logistics Matter

In-store pickup of online orders: retailers in IR Top 500

Source = Internet Retailer Top 500 Guide


Poll Question

How many have an integrated logistics solution?

Warehouse Management System (WMS) – ERP

Front-end Web – WMS

Front-end Web – ERP – WMS

I don’t know


Why Is Logistics Important to eCommerce?
An Established Logistics Provider Can Offer Key
Competitive Advantages

FINANCIAL IMPACT SPEED TO MARKET RELIABILITY
Convert fixed capital expenses Visibility to data and Improvement in customer
into activity based cost product information service and responsiveness
Reduction in direct operating Flexibility to expand into Increase in order and
expenses new geographic markets inventory accuracy
Optimization of transportation Launch new products Increase in on-time
network faster
shipments
Improvement in labor and
asset utilization


What Does a Logistics Model Look Like?

It’s not a one size fits all answer

INBOUND MANAGE OUTBOUND BASIC RETURNS
System Integration Inventory Control Order Receipt Returns Receipt
Receiving/Put away Inventory Visibility Picking/Replenishing Returns Triage
Inbound Value-Added Unique Storage Outbound Value- Returns Disposition
Services (VAS) Environments or Added
Return to Stock
Requirements Services (VAS)
Storage
– Return Refurbished
Data and Physical Shipping
Security – Hold for Customer
Electronic Shipping
or Vendor
Billing Confirmation
– Returns to Vendor
Reporting and
Measurement
FTZ (Foreign Trade Zone)
and Bonded

Logistics Enables Your Strategy


Selecting a Logistics Partner

What to Look For

Financial Stability Commitment to continuous improvement

Business Experience Growth potential

Management depth and strength Security

Reputation Chemistry and compatibility

Strategic Direction Ethics

Technology Cost

Global Capability


Use Logistics to Improve Customer Satisfaction
Shopping Experience Enhanced by Availability of Free
Shipping / Order Delivery Insight

Factors Influencing Total Purchasing Experience

Free shipping on most items
7
Knowing what day my purchase will be delivered 7

Easy to understand returns process 8 37

Availability of express shipping choices
10
Offers environmentally-responsible products

Ability to select a 2-hour delivery window 14
18
Ability to re-route packages to an alternate
location while in transit

Source = comScore UPS Customer Experience Study, March 2012
Question: Thinking of factors that would influence your total purchasing experience with a retailer, how influential is each of the following factors?


Customers Want to Know Order Status
In Addition to Free Shipping Availability, Timely Arrival of
Shipments Would Most Often Encourage Shoppers to Recommend
the Online Retailer

Recommendation of Online Retailers
- Top 4 Factors -
“I have told family friends numerous
times about free shipping offers.”

Question: Assuming you are happy with the product you purchased, what service features are most likely to make you recommend an online retailer?
Question: Assuming you are happy with the product you purchased, what service features have actually led you to recommend an online retailer?


Customers Will Make a Bad Experience Known
Shipping Costs and Products Arriving Damaged Are Among Top
Complaints Leading Online Shoppers to Make a Negative
Recommendation

Reasons that Would Lead to a Negative Recommendation of the Retailer

“If I had [a] really bad experience with
a site, I will share with my close family and
friends to warn them. It could be anything
from a delayed shipment, or broken items,
refunds not given or I have to pay for
return shipping.”

Question: What experiences (not including price or the product itself) would most likely lead to a negative recommendation to friends/family?


Use Logistics as a Way to Close the Sale

It’s not just about free shipping

40% of shoppers are willing to pay for shipping to get their
products faster

48% of shoppers are NOT willing to wait longer than 5 days
for purchase delivery

42% of shoppers will abandon their shopping carts because
of delivery time estimates



In Fact…
Ease of Making Returns/Exchanges More Important to
Customer than Free Shipping

Higher Importance/Lower Satisfaction Higher Importance/Higher Satisfaction

Lower Importance/Lower Satisfaction Lower Importance/Higher Satisfaction



Use the Return Process to Your Advantage
Logistics are essential for after sale support and
returns satisfaction

Retail returns have increased 15% between 2011 and 2012
In line with the growth in the direct-to-consumer marketplace

Consumers feel strongly about the returns process
Rated among the lowest areas of satisfaction in their online shopping
experience

Rated as a top area where they want to see improvement

Turn this into an advantage
Less Inventory

Better Inventory Management

Increased Sales


Ways to Support Returns

Make it Easy and Watch Customer Satisfaction Increase

Make it easy to get a return label
Let your customer print return labels directly from the web or include return
label in the package

Drop off a return at a carrier collection point
Driver, authorized shipping outlet, drop boxes and mailbox

Instant exchange
Fulfill the return while simultaneously delivering a replacement item


Logistics Can Take Your eCommerce Operation Global

Growing Your International Customer Base

Internationalization opens your store to new marketplaces and populations

Consider critical options
Support sales in international currencies
Handle VAT, regulations, tariffs and fees
Accommodate multi-language environment
Support foreign shipping address formats
Unique storage requirements and regulations


Poll Question

What is the current state of your eCommerce platform?

Current platform meets our needs
Current platform needs enhancement
No platform in place
Not sure


eCommerce Requires Two Pieces

COMPELLING LOGISTICS
ONLINE
STORES

Digital Strategy Supply Chain Management
User Center Design Inventory Management
Web Store development Pick, Pack, & Ship
Search Engine Optimization Value Added Services
World Class eCommerce Platform e.g., Returns and repairs
eCommerce Marketing Support Store ready packaging


The Lifecycle of an Order

Fulfillment: Getting
warehoused goods in an
Item Master: Total list of ERP: Enterprise Resource Planning is a
products in catalogue back-office system to runa box and sent to RMA: Return Merchandise
order put in company
a customer.
available to sell. Stored in operations including customer, order, Authorization is required to
iAPPS, Product Information Message sent AKA, Logistics, Third Party
Pick Ticket: to a
invoicing and potentially product/inventory tell the vendor you’d like to
Management systemwarehouse to say what was
(PIM) information. Large scales systems such as
or return something.
order and where to ship it. Logistics, 3PL
ERP. Oracle, SAP, etc.

Customer
Warehouse Warehouse
Order Order iAPPS iAPPS Tracking Customer Customer Ships Warehouse
Picks, Notifies
Placed Stored in Pushes to Pushes to Info Sent to Receives Creates an Goods Receives
Packs & iAPPS of
Online iAPPS Warehouse ERP iAPPS Order RMA Back to Goods
Ships Return
Warehouse


iAPPS and GWS Together

ERP GWS


iAPPS / WMS Out of the Box Integration


Who is This Solution For?
The Total eCommerce Solution from Bridgeline and UPS
Was Developed for Retailers:

With $5 - $25mm in online revenue ($50mm+ total revenue – 10% online)

That are looking for an engaging store, new sales channel or global distribution

That values brand and user experience as a differentiator

That may require Value Added Services (e.g., labeling, repair)

That now have or may have global distribution needs

Multi-currency and distributed footprint

One seamless, end-to-end solution gives you the best in:
• eCommerce technology
• Digital strategy know-how
• Logistics and fulfillment expertise


Case Study

Premier Global Manufacturing Brand

Challenge Solution
The Brand wanted to expand their market share The soon to be launched Total eCommerce
in the North American market by revisiting their solution powered by iAPPS with fulfillment by
distinctive style and design. Leveraging the UPS is the Brand’s first entry into an online B2C
current in-place dealer network, the team was marketplace.
tasked to approach this new channel as if it were
a brand new storefront.

The solution goals are summed up as The end solution will:
follows:
Improve how the company targets,
Build brand awareness communicates, sells, and fulfills product to its
Develop an online catalog customer base
Support Dealer “Brick-and-Mortar” storefronts Enhance brand awareness
Develop infrastructure to Increase online sales of lighting fixtures and
support growth and streamline operations decorating accessories


Q&A

Thank you for attending

Don Davis Alan Amling Brett Zucker
• Editor in Chief • VP of Marketing • Chief Technology Officer
• Internet Retailer • UPS Global • Bridgeline Digital
Logistics & Distribution

iAPPScommerce.com
800.603.9936


Maximize eCommerce Lift & Logistics ROI

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