Digital natives such as Amazon and D2C Companies have changed the landscape of the retail industry. With customer reviews, algorithmic suggestions, and programmatic media, they have delivered a personalized, customer-first approach to shopping online that is rapidly eroding market share for traditional brick and mortar stores. Now we’re seeing how traditional retailers are adopting the tactics that have made these digitally native business so successful.

1. The Singularity is Near: How Ecommerce and Media are
Converging in the Retail Industry
A ConversionPoint Technology Company

2. Agenda
1 | The Digital Disruption
2 | The State of Retail
3 | What’s Ahead- SellPoints Audiences

3. The Digital Disruption

4. The Retail Disruption – The Rise of Ecommerce
6%
7%
7%
8%
9%
10%
11%
12%
13%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
2013 2014 2015 2016 2017 2018* 2019* 2020* 2021*
United States: ecommerce share of retail sales 2013-2021
*data from eMarketer
Ecommerce has seen 180% growth in the last 5
years (Statista)
• 23% growth YoY from 2017 to 2018
(eMarketer)
• $505.5 billion in ecommerce sales in 2018
(Statista)
In addition to increased sales, more consumers are
shopping online.
• In 2016 there were 1.66 billion digital
buyers worldwide (eMarketer)
• In 2021, this number is expected to reach
2.14 billion (eMarketer)

5. The Retail Disruption – Shift in Shopping Preferences
*data from Statista & eMarketer
0 10 20 30 40 50 60 70 80 90 100
Automotive
Major appliances
Tools/hardware
Jewelry
Electronics
Kitchen & bath
Apparel/footwear
Kitchenware
Small appliance
Office stationary
Tablets/smartphones
Computers
Cameras/accessories
Entertainment
Toys & games
Books
Online vs. in-store shopping preferences of US consumers, 2017
Prefer to purchase digitally Prefer to purchase in-store
Some industries have already been completely
cannibalized by ecommerce and others are at risk.
• Books
• Movies
• Music
The in-store experience of these products wasn’t
worth the drive.
Digital disrupters such as Amazon and Netflix
provided added convenience, larger selection, &
lower prices.

6. The Retail Disruption – Amazon
48%52%
Share of US Ecommerce Sales in 2018
Amazon All Other Ecommerce
*data from eMarketer
Amazon delivered valuable product information
that changed consumers’ expectations.
• Trusted Consumer Reviews
• Algorithmic Suggestions
In 2018, Amazon Accounted for 48% of Ecommerce
Sales in the US. This is expected to reach 52.4% in
2019. (eMarketer)

7. The Retail Disruption – Brand Satisfaction
69%
28%
2%1%
How much value brands see from Amazon advertising
A great deal Some Just a little Unsure/don't want to disclose
*data from eMarketer
• Amazon makes it easy for brands to
work with them, resulting in expansive
inventory selection.
• In a 2018 survey, 69% of brands
considered Amazon advertising to be a
great deal (eMarketer)

8. Why Brands Love Amazon
• Low barriers to entry
• Reliable distribution
• Brands have more control over who sees their products.

9. Direct to Consumer
48%
44%
8%
Share of US Ecommerce Sales in 2018
Amazon All Other Ecommerce Direct to Consumer
*data from IBIS + eMarketer
• D2C accounted for 8% of online purchases in
2018 (IBIS)
• 40% of US internet users expect D2C brands to
account for at least 40% of their purchases within
the next five years. (eMarketer)
• D2C companies are capturing significant market
share in several categories, such as mattresses
(20%) shoes (15%) and razors (12%) (LUMA
Partners)
• Digital natives have more accurate data:
• More precise CAC and CLV models
• Sophisticated segmentation
• Efficient media spend

10. D2C Brand LUMAscape
*data from LUMAscape

11. The State of Retail

12. Retail Challenges

13. Shift in Media Spend
$116.90 $112.56
$108.36 $106.31 $103.68 $101.62
$88.40
$111.14
$132.32
$156.74
$172.39
$187.88
$80.00
$100.00
$120.00
$140.00
$160.00
$180.00
$200.00
2017 2018 2019 2020 2021 2022
Traditional Media vs. Digital Ad Spending (billions)
Traditional Media Ad Spending Digital ad spending
*data from eMarketer
Digital advertising provides better
more intelligence, so retailers and
brands can:
• Serve the right customers.
• Customize content based on
individual behavior or interest.
• Discover which channels and
messages generate the highest
Return on Ad Spend (ROAS).

14. Investment in Tech
*data from Gartner
196.6
203.6
210.9
218.5
185
190
195
200
205
210
215
220
225
2018 2019 2020 2021
Retail IT Tech Spending Forecast in billions Retail tech spending is expected to
increase 3.6% to $203.6 billion in 2019
(Gartner)
Areas of investment include:
• Cybersecurity / Privacy
• Operationalizing Data
(Capture/Manage/Transform)
• Data Transparency
• Artificial Intelligence

15. Investment in Tech
*data from Gartner
38%
Ad Professionals
Investing in Retargeting
62%
Marketers Investing in
Branded Visual Content

16. Personalization
To compete with digital natives,
retail will need to utilize data to
treat customers like VIPs.

17. Connected Systems
We envision a converge between Ecommerce and Media
under a unified Marketing Solution
• Leverage customer data to deliver
bespoke experiences
• Tell a consistent product story
across channels
• Integrate systems, allowing retailers
to use the data from product page
interactions to inform media buying
strategies and vice versa

18. What’s Ahead
SellPoints Audiences

19. SellPoints Audiences
UNIFIED ECOMMERCE SOLUTIONS
Retargeting
Prospecting
Now: $999.99
ProForm Pro 9000 Treadmill
10” Touch Display
FREE 1 Year iFit Membership
ENERGY STAR
Shop Now
Now: $999.99
ProForm Pro 9000 Treadmill
10” Touch Display
FREE 1 Year iFit Membership
Shop Now

20. • https://www.statista.com/statistics/379112/e-commerce-share-of-retail-sales-in-us/
• https://www.statista.com/statistics/272391/us-retail-e-commerce-sales-forecast/
• https://www.statista.com/statistics/311459/us-online-in-person-shopping-preferences-product-category/
• https://www.forbes.com/sites/johnellett/2018/02/08/new-research-shows-growing-impact-of-online-research-on-in-store-
purchases/#2ed059fa16a0
• https://www.bazaarvoice.com/resources/the-robo-economy-infographic/
• http://totalaccess.emarketer.co m/chart.aspx?r=223612
• https://www.digitalcommerce360.com/article/amazon-sales/
• https://rctom.hbs.org/submission/amazon-revolutionizing-the-shopping-experience-since-1995/
• http://totalaccess.emarketer.com/chart.aspx?r=225855
• https://digiday.com/marketing/brands-take-more-control-over-their-cooperative-advertising/
• https://www.ibisworld.com/industry-trends/market-research-reports/retail-trade/nonstore-retailers/direct-selling-companies.html
• https://lumapartners.com/content/lumascapes/d2c-lumascape/
• http://totalaccess.emarketer.com/Chart.aspx?R=223037
• https://retail.emarketer.com/article/direct-to-consumer-brands-upended-retailnow-theyre-changing-agency-model/5c197513b979f105909c1b02
• https://www.ibisworld.com/industry-trends/market-research-reports/retail-trade/nonstore-retailers/direct-selling-companies.html
• https://bozell.com/2018-is-the-tipping-point-for-media/
• https://www.gartner.com/en/newsroom/press-releases/2018-10-29-gartner-says-retailers-are-investing-heavily-in-digital-capabilities-to-meet-
customer-expectations
• http://totalaccess.emarketer.com/chart.aspx?r=219160
References