A review of current ecommerce strategy and roadmap of future growth

1. Presentation to Notcutts
November 2015
Dominic Smith
Provide a summary of budget recommendations, future growth
opportunity and route ahead for the E-Commerce platform

2. Web

3. Agenda
• Budget 2016/17
• Future Growth
• Platform and Route Ahead

4. Budget Overview - Sales
Missed furniture sales in summer contributed to revised forecast – woven, lavanham, kettler and
Ixworth

5. Waterfall - Sales
Affiliates could be key channel to recover budgeted -£47k

6. P&L

7. Progress has been made since above implementations July 2015
Conversion – up 70% YOY Feefo – 97% positive rating Google Trusted Store
Paypal option Affiliate channel launch Digital Agency support
SEO improvements across site Extra 15% pages now indexed Paid Search restructure
Traffic – up 11% Conversion – up 65% Sales – up 30%
We are seeing better conversion, more traffic, better engagement … but sales challenge on mobile
0
0.5
1
1.5
2
2.5
3
j f m a m j j a s o n j f m a m j j a s o n
Conversion Rate 2014 - 15
m d t
2016 Improvements

8. Marketing Spend
Increase in Paid Search as campaign set up overhauled and reach improved
£41k is new activity not budgeted FY14 / 15 – Affiliates, Feefo, Paypal to enhance Ecommerce offer

9. Future Growth: Potential?
• Believe sales potential of between £4m and £12m however profitability
less certain
• Incremental growth - £4m achievable organically within 4 years in-house
growing range, reach, platform. Profitable 2017/18
• Step Change growth – To reach £10m - £12m would require either
significant investment internally or purchase of an exiting operator.
Profitable: uncertain

10. Organic/In-house Growth
Limiting Factors
• Platform - No mobile site
- No visibility of stock in GCs
- No Click ‘n’ Collect functionality
• Reach - SEO challenging vs tier 1 *Argos / Homebase etc
- Marketing spend low
- Only attracting current Notcutts customer
• Conversion - 1% currently / improved by 70% YOY with improvements
• Range - Need full range of plants / Ongoing range refinement
- Furniture deals need to be sourced
• Social - Presence Low
• App - None
• Brand - Limited to GC store reach
• Privilege - Can be challenging proposition (Google)
• Email - One size fits all approach
• Data Capture - Expand prospect pot

11. New Platform: Functionality Needs
• Mobile Optimised
• Layout revision
• Better SEO structure
• Cost effective / Agile dev
• Improved trading spots
• Conversion triggers / basket
• Improved Journey / Privilege
• Better checkout / 2 / 3 step
• Accommodates 3rd parties
• Improved Stores pages / Finder
• UGC throughout
• Improved Social visibility
• App integration
• Gift Card
Focusing on key trading issues on
site plus working with additional
channels and improving range
offer should enable Incremental
Growth target of £3.5 / £4 mill
within next 3 years
All new functionality defined and
agreed pre sign off with benefits

12. Remain with BTF (£126k plus £40 CC )
Pros
• Most cost effective option given P/L
• Prudent option given business change ?
• Allows focus on basics / trading / partners
• Robust
Cons
• Dev led approach but changing
• Uncertainty re ambition
Re-platform (£250k / £300k plus £40 CC)
Pros
• Possibly more functionality
• Possibly better CMS / backend
Cons
• Uncertainty re performance
• Not cost effective given P/L challenge
• Time / resource / disruption with trading focus
• Still not addressed business issues – eg delivery? DC?
• Consultancy deep dive / when change is likely ?
New Platform - Options
Current version of platform (BTF) is 3 versions previous and costly to maintain
given back end / front end setup
Either Replatform or upgrade to new version of BTF required to grow web offer

13. Recommendation
• BTE for next 3 Years
– Allows Profitability
– Immediate benefits
– Prudent approach
– Minimum disruption
• Opportunities to re-skin
– Freshen look and feel
– Improvements to journey
• Enhanced functionality
– Improved checkout
– More CMS management
– Basket upsell / cross sell
– Mobile
Platform strategy summed up
1 2015 – issues fixed and better
trading
2 2016 – upgrade to FCP6 on 3 year
contract
3 Lowers risk in Web P/L
profitability
4 More focus on non platform levers
5 Accommodates business change
over 2 years
6 Web profitable within 2 years
7 Good base to assess post 2 years
of web offer