Logistics  for  Marketing

This  copyrighted  document  is  the  property  of  OOO  Kupishoes    and  is  disclosed  in  confidence.  It  may  not  be  copied,  disclosed  to  others,  or  used  for  manufacturing,  without  the  prior  consent  of  OOO  Kupishoes.

Liubomir  Kuchuk  5th  of  June  2014

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1 Lamoda  background

Why  we  need  to  do  own  Logistics?

Implications  of  technology  on  the  business  model

What  does  that  mean  to  customers?

Lamoda  is  backed  by  experienced  investors…

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Globally  renowned  investors

Press  Clippings

…  and  has  access  to  unique  global  knowledge  and  experience  in  e-­‐commerce  through  companies  founded  by  our  investors  

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E-­‐commerce  companies  founded  by  our  investors

Q4  2013

Q3  2013

Q2  2013

Q4  2012

Q1  2013

Q3  2012

Q2  2012

Q1  2012

Q4  2011

Q3  2011

Q2  2011

Lamoda’s  growth  has  been  exponential,  covering  already  all  key  markets  in  CIS

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Partners  who  trust  us  

Reaching  customers  across  Russia  and  CIS

Present  nowTo  be  launched  shortly

Goal  -­‐  #1  in  Russia  and  CIS

>80k#  SKUs~1000#  brands

Volume  Number  of  orders

Kazakhstan

Ukraine

Content

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1 Lamoda  background

Why  we  need  to  do  own  logistics?

Implications  of  technology  on  the  business  model

What  does  that  mean  to  customers?

Logistics  infrastructure  is  the  main  challenge  for  ecommerce  in  Russia

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Germany

China

USA2x

2x

50x

Existing  courier  firms    not  tailored  for  fashion  e-­‐commerce  

Supply  challenge

▪ Not  customer  experience  focused  

▪ Relatively  slow  ▪ Relatively  expensive

Demand  challengeCustomers  expect  highest  service  level▪ Try  on  at  door  ▪ Cash  on  delivery  ▪ Next  day  delivery  ▪ Friendly  and  timely  

couriers  

How  to  deliver  superior  customer  experience  to  demanding  customers  across  17.000.000  km2?

When  launched  in  2011,  Lamoda  partnered  with  the  most  successful  companies…

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Leading  international  freight  agent,  used  for  delivering  goods  to  Russia

Well  known  European  3PL  provider  with  facilities  in  Russia

Leading  international  express  delivery  agent

One  of  biggest  players  in  Russia

WH  and  fulfillment

Inbound  freight

Delivery  to  customers

Call  Center

Initial  Setup

…  but  customer  needs  were  not  met

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Long  lead-­‐time  in  delivery  of  goods  from  suppliers  at  high  cost

Long  lead-­‐time  in  all  WH  processes  Low  quality  of  stock    Not  efficient  usage  of  space

Long  lead  time  of  delivery  Non  traceable  orders  Customer  lower  satisfaction

Low  SLA  Low  understanding  of  our  products  Not  familiar  with  business  model

Inbound  freight

Call  Center

WH  and  fulfillment

Delivery  to  customers

Challenges

Hence  Lamoda  has  developed  its  own,  integrated  ecommerce  platform

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Inhouse  import  team  to  bring  inventory  online  first  in  the  season

Lamoda  Distribution  Center  in  Moscow  focused  on  fast  fulfillment  and  attractive  cut-­‐off  times  for  customers  (e.g.  24h  Moscow  for  next  day)

Lamoda  Express  as  the  fastest  B2C  delivery  company  in  Russia/Kazakhstan  (next  day  delivery  in  >50  cities,  e.g.  Almaty,  Ekaterinburg)

Lamoda  Call  Center  with  highest  service  level  for  inbound  and  outbound  operations

Inbound  freight

Call  Center

WH  and  fulfillment

Delivery  to  customers

Market-­‐specific  Solution

Content

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1 Intro  –  Lamoda  background

Why  we  need  to  do  own  logistics?  

Implications  of  technology  on  the  business  model

What  does  that  mean  to  customers?

Customer  experience  that  we  offer  is  reflected  in  every  step  of  the  value  chain…

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Call  Centre !!

Distribution  Centre !!!  

Own  fashion  delivery

99.98%   items  availability  in  the  DC

99%   of  calls  originated  within  first  5  minutes  from  order  creation

Trained  sales  reps    to  support  in  choosing  the  right  

goods

DC  in  Moscow  where    

40%    of  market  is  located

90%   of  calls  are  answered  within  20  

seconds Next  day  delivery  in  >50  cities

Next  day  delivery  in  Moscow  when  ordered  before  

Midnight

64  delivery  methods

99.99%   outbound  service  

level

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Lamoda  Distribution  Center,  October  2012

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Lamoda  Distribution  Center,  November  2012

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Lamoda  Distribution  Center,  December  2012

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Lamoda  Distribution  Center,  May  2013

Customer  experience  that  we  offer  is  reflected  in  every  step  of  the  value  chain…

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Call  Centre !!

Distribution  Centre !!!  

Own  fashion  delivery

99.98%   items  availability  in  the  DC

99%   of  calls  originated  within  first  5  minutes  from  order  creation

Trained  sales  reps    to  support  in  choosing  the  right  

goods

DC  in  Moscow  where    

40%    of  market  is  located

90%   of  calls  are  answered  within  20  

seconds Next  day  delivery  in  >50  cities

Next  day  delivery  in  Moscow  when  ordered  before  

Midnight

64  delivery  methods

99.99%   outbound  service  

level

…  and  results  in  massive  impact  on  economics

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Quick  confirmation  calls    reduce  cancellation  rate

Fast  delivery    reduces  rejection  rate

Our  high  quality  delivery  service    reduces  rejection  rate

Our  high  quality  delivery  service    increases  repurchasing  rate

-­‐35%

10+  min5-­‐10  min1-­‐5  min<1  min

+6%

6  month3  month1  month

Lamoda  Express

Other  courier  companies

-­‐17%

Other  courier  companies

Lamoda  Express

-­‐10%

4+  days3  days2  daysnext  day

Our  efforts  resulted  in  significant  improvement  of  customer  experience  over  last  year

Net  promoters  score  (NPS) %  of  satisfied  customers

Promoters,  %

Detractors,  %

NPS,  %

86817876

3555

83767371

Q2  2013

Q3  2013

Q4  2013

Q1  2014

89848285

Satisfied  and  fully  satisfied

Website

91848282

Delivery

94878782

Customer  Care

Q2  2013

Q3  2013

Q4  2013

Q1  2014

From  -­‐100%  to+100%

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Content

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1 Lamoda  background

Why  we  need  to  do  own  logistics?

Implications  of  technology  on  the  business  model

What  does  that  mean  to  customers?

In  distribution  center,  internal  movements  are  supported  by  improved  technology  which  resulted  in  increased  quality100%  control  and  track    of  internal  movements…

…increased  quality

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Hand  free  scanner

Transport  solutions

Zebra  label  printer

18  months  ago

13  times

Today

1,5    mistake  out  of      

10.000  orders

Relative  number  of  mistakes  in  distribution  center  

Further  improvements  will  come  from  implementation  of  technology  in  process  automation

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LoadingDispatchingPackagingSortingPicking

Additionally,  last  mile  delivery  will  be  supported  by  sophisticated  software  for  tablets  to  improve  performance

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Operational  efficiency

• Instant  status  update  in  ERP  • Delivery  interval  hit/miss  control  • Real-­‐time  fleet  management  • Complete  transparency  for  customer  care  

centre

Customer   Services

• Client  orders  on  screen  with  rich  media  and  suggestions  

• Order  specific  information  • Unlimited  opportunity  for  upselling  • Deep  integration  with  CRM

Sales  ForceManagement

• Real-­‐time  tracking  of  KPIs  • Team  ranking  to  build  competition  and  drive  

performance  • Gamification  to  motivate  personnel

Thank  you!

This  copyrighted  document  is  the  property  of  OOO  Kupishoes    and  is  disclosed  in  confidence.  It  may  not  be  copied,  disclosed  to  others,  or  used  for  manufacturing,  without  the  prior  consent  of  OOO  Kupishoes.