NRF Nexus Presentation July 2022 Neel Grover, CEO, Shop Premium Outlets Tom McFadyen, CEO & Author, McFadyen Digital

1. Selling via Marketplaces
How Retailers can be the Disruptor Instead of the Disrupted
© McFadyen Digital
Tom McFadyen
CEO & Author
Neel Grover
CEO
WHAT Disruption?
WHY Disruptive?
WHO’s Disrupting?
HOW to Disrupt?

2. About Tom McFadyen
© McFadyen Digital
Marketplace Best Practices
Transforming Commerce in the Platform Economy
(470 pages)
CEO of McFadyen Digital
Lead a team of 200 Marketplace professionals
15 years building dozens of marketplaces
25 years building hundreds of ecommerce solutions
Billions of dollars of annual GMV
Lead author of Marketplace Best Practices
Kindle version free
during NRF Nexus
(use Amazon website, not App)

3. About Neel Grover
Marketplace, Marketplace, Marketplace, Marketplace, Marketplace, Marketplace!
2003-2010: CEO Buy.com - Built 3rd Largest Marketplace in US
2010-2013: CEO Rakuten North America - Built Very Seller Friendly Marketplace
• Also Built and Powered Best Buy’s Marketplace
2013-2016: CEO Bluefly - Built Fashion Marketplace
2017-2018: Exec Committee Noon- $1B Funded Marketplace in Dubai
2020 – Present: CEO Shop Premium Outlets – Built Premium and Luxury Marketplace
© McFadyen Digital

4. WHAT: Marketplaces grow 2x faster than Ecommerce
Source: Mirakl Enterprise Marketplace Index 2022
2019
Global Enterprise eCommerce
Year-over-year growth (%)
2020 2021
Enterprise Marketplaces
41%
12%
10%
80%
25%
22%
2x
2X

5. WHAT: Marketplaces generate more traffic
More products
Fresher content
High quality &
customer ratings
More SEO results through…
29
more products
available
+ %
4
traffic
growth
x
Source: Mirakl Enterprise Marketplace Index 2022

6. WHAT: Disruption in Grocery
$36B
$36B
$17B
$15B
$7B
Within 10% of the time,
with 5% of the staff,
with no stores,
marketplace Instacart
developed a larger valuation
Bubble size represents market cap
$39B
Source: McFadyen Digital Research

7. WHAT: Disruption in General Merchandise
-10%
2015 2016 2017 2018 2019 2020
+940%
+800%
+575%
+1251%
+450%
Within 5 years,
general merchandise marketplaces
grew revenues by 800%
while department stores were flat.
Source: McFadyen Digital Research

8. WHY: Retail & Ecommerce are a Pipeline Business Model
Negotiate
Contracts
Load in
ERP
Merchandise
Products
Set
Price
Hold
Inventory
Process
Orders
Fulfill
Orders
Find
Products
Manufacturer
Manufacturer
Distributor
Distributor
Customers

9. WHY: Marketplaces are a Platform Business Model
Recruit
Sellers
Support
Sellers
Process
Orders
Customers
3P
Brand Manufacturer
3P
Distributor
3rd Party Reseller
3P
Distributor
3rd Party Reseller
Distributor
3P
Manufacturer
Distributor
Manufacturer
3P
3rd Party Reseller
Distributor
Standard T&C
NETWORK
ECOSYSTEM
3 August 2022

10. WHO Runs a Marketplace Today?

11. A Virtuous Cycle:
The Marketplace
Flywheel
HOW: Flywheel Effect
© MCFADYEN DIGITAL Proprietary

12. HOW: 5 Levels of Marketplace Maturity Model (MMM)
1st Party (1P)
Ecommerce
Operator sources all products, manages all images, merchandising, pricing, etc. handles all fulfilment &
returns, etc.
Implement
Ecommerce
Dropship
Some products shipped directly by vendor to customer.
Operator manages all images, merchandising, pricing, etc.
(this level is often skipped by moving directly to a marketplace)
Add Dropship
Capability
Third party sellers load products, images, merchandising, pricing & handle
fulfilment & returns.
Operator can curate categories & products.
Implement
Marketplace
Platform 3rd Party (3P)
Marketplace
Quantitative
Management
Metrics drive strategy, category & product expansion, 3P->1P
or 1P->3P product sourcing, physical store inventory, vendor
management, etc.
Implement
Analytics/BI
& Adjust
Optimizing
Focus on innovation & process improvement.
Ex: Services marketplace, vendor promotions,
financial automation, onboarding automation, etc.
Constantly
Enhance
© MCFADYEN DIGITAL Proprietary
12 3 August 2022
White Paper: www.mcfadyen.com/mmm

13. 13
HOW: Marketplace Enablement Steps
ASSESSMENT MVP FULL DEPLOYMENT OPERATIONS
© MCFADYEN DIGITAL Proprietary
ASSESSMENT & PLANNING
 Strategy Formation
 Competitive Analysis
 Budget & ROI
 Success Criteria & KPIs
 Scope & Roadmap
 Timeline & Milestones
 Organizational Design
 Tech Stack Selection
 Hi-Level Architecture
3-10 weeks
TECHNOLOG
Y
STRATEGY
&
BUSINESS
BUSINESS PREP
 Category Selection & Curation
 Seller T&C and Commission Grid
 Seller Recruiting & Onboarding
 Design UX Changes
 Marketing Plan
 Shipping Options
 Metrics & Reporting
 User Acceptance Test (UAT)
 Program Mgt & Governance
10-20 weeks
MVP BUILD & DEPLOY
 Env Setup & DevOps CI/CD
 Taxonomy
 Basic Integ: eCom, Pay, Tax, CRM
 UI Changes
 Seller integrations
 Iterative Dev & Test
 SIT and Load & Perf Test
 Tech & Hi-Level Arch
10-20 weeks
BUSINESS OPERATIONS
 Seller Recruiting & Onboarding
 Seller Support & Management
 MP Customer Support
 Category, Product, Pricing Curation
 Content Q/A (Text & Images)
 Marketing Campaigns
 Reporting
 Steering Committee
 Enhancement Planning
Ongoing
PLATFORM ENHANCEMENTS
 Advanced Integrations
 Seller Process Automation / Integ
 CX & SEO Enhancements
 Performance Tuning
 Advanced Reporting & BI
 Advanced Promos & Coupons
 Internationalization
 Omnichannel Expansion
10-20 weeks
SUPPORT
 Enhancements
 Bug Fixes
 Additional Integrations
 Tech Updates
 Frequent Releases
 Marketplace BPO
Ongoing
3 August 2022

14. Unique Benefits
• Exclusive and Curated list of Brands
• Focus on Sale, Clearance and Outlet Products Only
• Collaborative on Marketing and Promotions (If, How and When)
• Drive Customers into Brand’s Full Price Funnel – because of the Simon Ownership and Physical Footprint
• Buy Online Pick up In Store (BOPIS)
• Ship to Store (from Outlet to Mall)
• Livestream Events from Stores
• Customer Data Share
© McFadyen Digital