Innovation paper for bringing Products to Market - the rise of eCommerce, it's benefits and challenges, impact on the economy and how it is fuelling innovation in the retail industry.

1. Internet Marketing
(IV)
MART 211 - Leanne Ross - 2018

2. What is
eCommerce?

3. What is eCommerce?
[Short for Electronic Commerce] - “commercial transactions conducted electronically on the Internet.”

4. 1979: English inventor Michael Aldrich introduced electronic shopping in 1979, which operated by
connecting a modified TV to a transaction-processing computer via telephone line

5. History of eCommerce
1999
Alibaba
launches
with more
than $25m in
funding
2005
Etsy launches
allowing crafters
and smaller sellers
to sell through an
online marketplace
1995
Amazon
(books) and
eBay
(AuctionWeb)
launch
1998
Paypal launches as
an eCommerce
payment system

6. 2017 – Cyber Monday sales exceed
$6.5B.
In 2017, ecommerce growth breaks a new
record with online sales breaking $6.5
billion on Cyber Monday – a 17% increase
from the year before.
Mobile sales also break records with an
excess of $2 billion in sales made via
mobile devices.

7. Types of eCommerce
Business to Business (B2B), in which one business sells directly to another
business.
Business to Consumer (B2C), in which a business sells directly to consumers.
Consumer to Consumer (C2C), in which one consumer is selling to another via
auction or social media (e.g. eBay and Facebook marketplace).
Although online shopping is the most obvious form of eCommerce, online
banking is technically also considered ecommerce.

8. Changing Shopping Habits
96% of Americans with
access to the internet have
made a purchase online at
some point in their lives and
80% have made a purchase
online in the past month.
51%of Americans nowprefer
to shop online ratherthanin-
store.

9. Ecommerce isn’t going anywhere, and it’s
only going to keep getting bigger:
According to Digital Commerce 360,
ecommerce will account for 17% of all
retail sales by 2022.

10. What are the pros &
cons of direct
selling online?

11. Benefits
For businesses
● Reduces operational costs
● Higher order processing
● = Bigger profit margins
● Increases revenue
● Fast and convenient
● Data-driven business
● Easier to retarget
● Easier to increase impulse
● Enables global expansion
● Can increase in-store sales

12. Benefits
● Reduces costs
● Saves time
● Offers more choice
● Enables greater comparison
● Encourages competition
● Personalised experiences
● Less invasive experience
● Access to reviews
… they never close: shop in pyjamas!
For consumers

13. Disadvantages
For businesses
● Cost of technology
● Limited interactions with
customers
● Technology breakdowns
● Highly competitive sector
● Customer impatience
● Reliant on shipping companies

14. Disadvantages
For consumers
● Inability to test/try-on
● Unreliable deliveries
● Less significant discounts
● Lose power to negotiate
● Lack of interactivity
● Lack of experience
● Risks of fraud
● Hidden charges

15. Wolfgang Digital 2017 E-Commerce Benchmark Study
(Based on an analysis of 143 million sessions and $531 million in revenue)
Mobile revenue is growing, but desktop is still where most of
the money is being made: 61% of revenue.
Sites that received more mobile traffic earned more money on
average.
Google provides the highest converting traffic.
Email still absolutely stomps Facebook. As a final click, email
delivers three times the revenue of Facebook.

16. The Impact on Retail Jobs
Jobs related to ecommerce are up 2x over the last five years, far outpacing other
types of retail in regard to growth.
However, growth in ecommerce jobs is only a small piece of the employment
puzzle overall.
A few quick facts on how eCommerce has impacted employment:
● Ecommerce jobs are up 334%, adding 178,000 jobs since 2002
● Most eCommerce jobs are located in medium to large metropolitan areas
● Mostecommerce companies havefour or fewer employees

17. Supply Chain Management evolving:
Survey data shows that one of eCommerce’s main impacts on supply chain management is
that it shortens product life cycles.
As a result, producers are presenting deeper and broader assortments as a buffer against
price erosion. But, this also means that warehouses are seeing larger amounts of stock in
and out of their facilities.
In response, some warehousers are now offering value-added services to help make
ecommerce and retail operations more seamless and effective, e.g. separation of
stock/storage for online vs. retail sales, different packaging services and
inventory/logistics oversight.

18. What it takes to be successful...
A new generation of home owners to
market to, the digitally savvy millennials.
This group didn’t grow up wielding
hammers or fixing shower curtains; they
are typically less experienced with home
maintenance compared to the
generations before them; and this has
created a knowledge gap - just as this
demographic moves into home
ownership. Lowe’s is tackling the
problem by training millennials on social
media; giving them the confidence to
take on home improvement projects.

19. DEEP understanding of customers
Baby Supermall worked with Google in
2014 to run a targeted AdWords paid
search campaign, targeting mothers.
The baby retailer linked analytics to
search with attribution modelling to
generate tens of thousands of dollars in
additional sales every week.

20. eCommerce vs In-Store
Despite being a multi-channel retailer, Bensons for Beds historically only
measured the effects of online marketing on online sales. With no way of
assessing the impact of digital activities on in-store sales, it wasn’t possible
to accurately calculate the return on digital ad spend...
They wanted to encourage customers into stores at scale
● Activated Store Visit reporting in Google AdWords and Eddystone
Bluetooth beacons (AdWords calculates Store Visit conversions based on aggregated,
anonymised data from millions of Google users who opt in to share Location History, click on an ad and
visit a location.)
● Created Local Inventory Ad campaigns
● Saw 170% higher ROAS when considering offline revenue

21. When it goes wrong...
In September 2017, Amazon mistakenly sent out
some very confusing emails, telling a large number of
customers that someone had bought an item off their
baby registry.
Many of the recipients did not have a baby registry,
let alone a baby gestating.
An Amazon spokesperson called it a technical glitch.
Even the largest digital giants can make glaring
customer data errors…

22. What consumer
expectations are
created by the
growth of online
shopping?

23. https://multichannelmerchant.com/ecommerce/consumer-expectations-rise-with-websites-and-apps/

24. Expectations
C2C sales and communications is
making us more demanding
Personalised service & incentives
Fast, free, high-tech delivery
Mobile payments/wallets choices
24/7 customer service expectations
Open to collaborative consumption!
Omni-channel integration...

25. The move towards “omni-channel”

27. Social Media’s Impact on Shopping Online
Researchers have discovered that ecommerce has made an interesting social impact; especially within
the context of social media.
Today, eCommerce shoppers discover and are influenced to purchase products or services based on
recommendations from friends, peers, and trusted sources (like influencers) on social networks like
Facebook, Instagram, and Twitter.
In the International Journal of Market Research, M. Nick Hajili wrote:
“Trust, encouraged by social media, significantly affects intention to buy. Therefore, trust has a significant
role in ecommerce by directly influencing intention to buy and indirectly influencing perceived usefulness.”
If you’ve ever been inspired to buy a product you saw recommended on Facebook or featured in
an Instagram post, you’ve witnessed this social impact as it relates to ecommerce.

28. One of the biggest expectations created by
the growth of online shopping:
INNOVATION

29. Seriously Silly
Socks UK
Business outcomes of their innovation:
+50% increase in revenue
Initially process was manual and the
customer needed to add a box to their
basket and then add 4 pairs of socks as
separate items, 5 items in total.
In practice, this didn’t work for the
customer or their fulfillment needs.
Cart Designers, based in, Texas,
developed a Build a Gift Box tool for
them...

30. Beer Cartel (Sydney)
Business outcomes based on their innovation: An increase in online
revenue of $65,000, a 34% gain on the previous year.
Site traffic grew over 100%, from 62,000 unique website visits in
2016 to 128,000 in 2017.
Beer Cartel’s mailing list grew over 130%, from 13,000 subscribers
in 2016 to 30,000 in 2017.
The idea behind their survey was to create a publicly released
report that changed how Beer Cartel as a business was thought of
by consumers, suppliers and the industry at large...

31. Neon Poodle (Australia)
Expanded to 3 continents in 18 months with a team of 2
(and a full-time job!)
+232.14% increase in revenue
+11.21% increase in conversion rate
The cost of shipping and the logistical nightmare were the
biggest burdens to growth in retail & wholesale markets.
So they set up 3 business structures across 3 continents
(with 3 different online stores) to tackle both the
distribution challenges as well as open their door to new
clients worldwide.