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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)
and seeking out comparable pricing on services. and how much. • They are more discriminating about when. . • Consumers are more tech-savvy. they buy. • Customers are seeking a new type of value. particularly free shipping. reacting more to coupons and promotions.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.
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 .
it is important for companies to present a consistent brand experience across channels. exclusive and/or discounted product • Service can be a necessary differentiator . while optimizing each channel’s unique capabilities • Product differentiation is critical where retailers must have unique. new.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 .
. evaluating performance at the item level. – Introduce new product lines built off current success – Based on profitability.Product Assortment • There are multiple ways that assortments can be extended.
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 .
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. and as such we try to understand that customer. which is a very targeted approach to selling . automated recommendations) to drive conversion.
Others • Social • Mobile • Analytics and Testing .
What should be the KPIs .
com/about%20te chnopak/Retail%20Ecommerce%20The%20Channel%20Fo rward.In India http://www.technopak.pdf .
www.ebay.flipkart.com • Marketplaces .These sites essentially bring together buyers and sellers and serve as a platform for their interaction e. www.This is the basic model wherein products are listed on the web portal.in . www. www. and customers browse and buy the products e.Four Models that work in India • ‘Standard’ .snapdeal.g.g.com • Club based –These sites position themselves as private shopping clubs and are open to members only Eg.g.These sites focus on providing lucrative deals across product and service categories e.fashionandyou.com • Deal based .
accessories. – In all. watches. shoes. retail is a 30 per cent gross margin business . moderate gross margins for categories such as home appliances and health & beauty – high gross margins for clothing. etc. inventory-led e-commerce models • In retail industry – low gross margins for categories such as mobile or electronics.. a majority of the capital has gone into only one kind of e-commerce business model. jewellery.e.Where is the Money? • While more than $350 million have been invested in Indian ecommerce over the past three years. i.
Where is the Money. • The operating margins will be in negative territory if the retailer has more than 6 per cent unsold inventory. retail ops. in net-net he can achieve 7 per cent operating margin. • If a retailer is highly efficient. a retailer has to show that his inventory turnover is 10x or 12x and has no unsold inventory. • A retailer has to recover money for – Marketing – IT – Operations (warehousing. • For a 7 per cent operating margin. . etc. sourcing.) – Lease/rental and – G&A..
– 1 per cent on technology. – 6 per cent on lease/rental. the 7 per cent operating margin can be operating loss (assuming a minimum of 7 per cent unsold inventory) .Where is the Money. Retail • Earns 30 per cent in gross margin • Spends – 12 per cent on marketing.. – 3 per cent on operations – 1 per cent on G&A • to make 7 per cent operating margin. • And if there is a high level of unsold inventory.
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 .