E-Tailing

2012 is Interesting
• Now is a very interesting and challenging time to compete in ecommerce. • In an economy,
– Where consumers are in the driver’s seat – Seamless, vibrant shopping experiences across channels are a ‘must-have’.

– Retailers are revamping their approach for managing and expanding their customer experience
– Adopting new technologies and trends, while enhancing older investments – Evaluating the cross-channel efforts (such as online, in-store, mobile and social initiatives)

• Customers are seeking a new type of value. reacting more to coupons and promotions. particularly free shipping. and how much. • Consumers are more tech-savvy. and seeking out comparable pricing on services.1 Consumer • Constantly connected—with their iPhone at the airport to their desktop in the office • Trips to the mall are becoming less efficient than surfing the web. . seek more value and seek it through more channels than ever before. • They are more discriminating about when. they buy.

More Tech Savvy • Treating shopping like a game they want to win • Interest in engaging with different technologies sees greater adoption of tools among consumers • Chat becoming a preferred way to communicate with retailers .

exclusive and/or discounted product • Service can be a necessary differentiator . it is important for companies to present a consistent brand experience across channels. new. while optimizing each channel’s unique capabilities • Product differentiation is critical where retailers must have unique.More Value • Consumer expectations increase with cross-platform access as shoppers expect the ability to interact with a brand wherever and whenever they want • At the same time.

What is the Customer doing on his Smartphone? .

The Foundation • Competing in an omni-channel environment often requires investment in organizational and technological infrastructure • Scaling the Technology • Content Management • Integration Issues .

Branding • Look at Amazon .

Product Assortment • There are multiple ways that assortments can be extended. . evaluating performance at the item level. – Introduce new product lines built off current success – Based on profitability.

Merchandising • SEM • Exemplary Customer Service • Analytics evaluation of what works • Site enhancement that improves customer navigation • Making it easier to find • Pricing or Promotional strategy .

and as such we try to understand that customer. which is a very targeted approach to selling . we might look at someone who liked us on Facebook and provide a much different perspective • Ultimately we take advantage of trigger-based communication (abandoned cart. including use of their spend pattern and social graph to incorporate that experience into the site • For example.Personalization • Every person is an individual. automated recommendations) to drive conversion.

Others • Social • Mobile • Analytics and Testing .

What should be the KPIs .

pdf .technopak.com/about%20te chnopak/Retail%20Ecommerce%20The%20Channel%20Fo rward.In India http://www.

and customers browse and buy the products e.g.These sites focus on providing lucrative deals across product and service categories e.Four Models that work in India • ‘Standard’ . www. www.These sites essentially bring together buyers and sellers and serve as a platform for their interaction e.in .fashionandyou.This is the basic model wherein products are listed on the web portal.g.flipkart. www.com • Deal based . www.g.snapdeal.com • Marketplaces .ebay.com • Club based –These sites position themselves as private shopping clubs and are open to members only Eg.

jewellery.. shoes. retail is a 30 per cent gross margin business . watches. – In all.Where is the Money? • While more than $350 million have been invested in Indian ecommerce over the past three years.e. a majority of the capital has gone into only one kind of e-commerce business model. accessories. moderate gross margins for categories such as home appliances and health & beauty – high gross margins for clothing. inventory-led e-commerce models • In retail industry – low gross margins for categories such as mobile or electronics. i. etc.

• The operating margins will be in negative territory if the retailer has more than 6 per cent unsold inventory. . retail ops. • If a retailer is highly efficient. • A retailer has to recover money for – Marketing – IT – Operations (warehousing. in net-net he can achieve 7 per cent operating margin. a retailer has to show that his inventory turnover is 10x or 12x and has no unsold inventory. sourcing.. • For a 7 per cent operating margin.) – Lease/rental and – G&A. etc.Where is the Money.

• And if there is a high level of unsold inventory. the 7 per cent operating margin can be operating loss (assuming a minimum of 7 per cent unsold inventory) ..Where is the Money. – 3 per cent on operations – 1 per cent on G&A • to make 7 per cent operating margin. – 6 per cent on lease/rental. Retail • Earns 30 per cent in gross margin • Spends – 12 per cent on marketing. – 1 per cent on technology.

Is this Sustainable? • Clever Working Capital Management – SOR Model – Back-to-Back • 12-15 per cent unsold inventory • On an average spending 25% of gross revenues on marketing • Own branded delivery • Free shipping is taking a toll of around 6% of gross revenues .

Is this Sustainable? .

Which way to go? • Tier II and Tier III Cities • Multiple Payment options • Integration with Offline shops • Easy Returns • Retain Customers .

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