ECOM: DISRUPTION DELIVERED NEXT-DAY

FAST FORWARD

THE TAILWIND OF COVID-19 HAS DRAMATICALLY ALTERED THE LANDSCAPE OF ECOMMERCE

PLACING ECOMMERCE SQUARELY AT THE CENTRE OF SALES STRATEGIES

WHICH HAS SIMULTANEOUSLY SHORTENED AND WIDENED THE FUNNEL ALL AT ONCE

AND DIGITAL-NATIVES WERE PERFECTLY POISED TO BENEFIT FROM THE SURGE IN DEMAND

+9% TRAFFIC GROWTH+30% CONVERTED VISITS+7% CONVERSION RATE+11% PURCHASE FREQUENCY

NECESSITY > RISK: RISING NUMBER OF 3P SELLERS

0%

10%

20%

30%

40%

50%

60%

70%

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

6.9% CAGR

EXPECT COVID-19 TO

INCREASE THIS NUMBER

COVID-19 HAS BROUGHT DIGITAL TRANSFORMATION TO THE FRONT OF THE QUEUE

ON THE SUBJECT OF QUEUES...

JANUARY FEBRUARY MARCH APRIL

2019 2020

+900%

…

IT’S THE AGILITY OF NEW ENTRANTS TO FILL THE GAPS LEFT BY INCUMBANTS

+62% +45%

+94% +26%

SOURCE: SHOPIFY EARNINGS CALL, Q1 2020

THERE ARE ABSOLUTELY NO BARRIERS TO ENTRY; THOSE WHO HAVE MANAGED THE TRANSFORMATION ARE REAPING THE REWARDS

CTO

BUT COMMERCE TRANSFORMATION

REQUIRES A LEVEL OF READINESS

CUSTOMER

EXPERIENCE

CONNECTION

COMMERCE

‘ALGORITHMIC

RETAIL’ HAS

DEMOCRATISED

WHO WINS.

ECOMMERCE IS A

MERITOCRACY. (SALES VELOCITY)

FULFILMENT(METHOD)

DIRECT

FACTORS

I

$

INDIRECT

FACTORS

INTENT-RELEVANCY(TITLES, FEATURES, PDP’S)

AVAILABILITY(IN-STOCK RATE)

PRICE(MARGIN/BENEFIT)

SALES VELOCITY

RATINGS(VOLUME & SCORE)

ASSETS EBC

MEDIA

PROMOTIONS

AND ECOMMERCE IS NOT TO BE IGNORED:WHEN OLD HABITS BREAK, LONG-HELD BEHAVIOURS BREAK WITH THEM

52

77

55

48

54 55 5652 51

Australia China France Germany India Italy Spain UK US

Source: How are habits formed: Modelling habit formation in the real world, Lally. P

NEW HABITS FORMED:

66 DAYS

A SURGE IN SALES SPURRED GLOBAL OPTIMISM

UPON REOPENING OF MALLS IN CHINA, SHOPPING STARVED CONSUMERS INITIALLY OVERCOMPENSATED BY SPENDING MORE THAN NORMAL

WHILE IN-STORE PURCHASES SLOWLY RECOVER, LABOR DAY WAS SEEN AS THE FIRST REAL ACID TEST OF RETAIL RECOVERY & ECOMMERCE DIDN’T DISAPPOINT

+28%SALES YoY +50%

CATEGORIES

SOURCE: AZOYAGROUP

WHEN THE DUST SETTLES

STATED TRUTH +REVEALED TRUTH = ACTUAL TRUTH

Q: ‘I’M WORRIED ABOUT MY FINANCES AT THE MOMENT’

A: 27TH APRIL 2020

US: +48%

UK: +39%

IN: +70%

CN: +47%

ES: +62%

IT: +58%FR:+46%

DE: +34%

SOURCE: MINDSHARE COVID-19 TRACKER, WAVE 3

THERE HAVE BEEN WINNERS AND LOSERS ACROSS THE CATEGORIES; APRIL IS SHOWING SIGNS OF MARKET GROWTH.

+21%

FOOD & DRINK

APPAREL BEAUTY PETSMARKETPLACES

-7% -5% +10% +10%

SOURCE: SIMILARWEB, CATEGORY ANALYSIS

JAN-APR YoY

APRIL YoY +46% +1%-7% +17% +8%

CONSUMERELECTRONICS

-5%

+6%

STATED TRUTH CONFIDENCE IS IMPACTING ATTITUDES TO SPENDING ON NON-ESSENTIALS

REVEALED TRUTH

ACTUAL TRUTH

SALES OF ESSENTIAL PRODUCTS HAVE DOMNITED, BUT OTHERS ARE REBOUNDING

SOME CATEGORIES ARE NOT JUST REBOUNDING BUT DELIVERING YoY GROWTH

In times of uncertainty, there are some things we know we know

Known Known #1: There are only so many hair clippers you need

Source: Change in UK Search Volume, Google,2020.

eCommerce maturity accelerates

China

$1.9bn

US

$586m

UK$142m

Japan$115m

South Korea$69m

Germany$82m

France$70m

Canada$50m

Russia$27m

Source: eMarketer, 2020.

Shoppers will form new channel preferences

Known Known #2: We’re entering a huge recession

And in recessions, consumers become more value conscious

Pricing strategy will become mission critical

Pricing strategy will become mission critical

Known Known #3: Private Label shopping is rife during recessions

Source: Kantar, April 2020.

At the same time, shoppers are more loyal in eCom

Buy the same brand when both

purchases happen online

NEW PRIORITIES

RE-EMBRACING THE LOCAL

AND SHIFT TO SELL IN NEW WAYS ONLINE

BECOMING THE HEROS OF THEIR LOCAL COMMUNITIES

BY BUILDING MORE PERSONAL CONNECTIONS

BIG BRANDS ARE BUILDING DIGITAL COMMUNITIES AT A MACRO LEVEL

BIG BRANDS ARE BUILDING DIGITAL COMMUNITIES AT A MACRO LEVEL

AND FOCUS ON CONTENT TO ADD VALUE

AND FOCUS ON CONTENT TO ADD VALUE

BUSINESSES KNOW: ADDING VALUE NOW WILL SERVE THEM WELL POST-CRISIS

CRUCIALLY: MEANINGFUL, RELEVANT CONTENT DRIVES SALES

CRUCIALLY: MEANINGFUL, RELEVANT CONTENT DRIVES SALES

TRAFFIC

SALES

+33% YoY

+48% YoY

TRAFFIC

SALES

-15% YoY

-5% YoY

Source: Similarweb, UK, March 2019 vs. 2020, Visits & Converted Visits

CONNECTING

CONTENT +

COMMERCE

CONNECTING CONTENT + COMMERCE

HYGIENE WILL SHAPE FUTURE SHOPPER CHOICES

are more aware of

their hygiene habits

& behavioursSource: Covid-19 Tracker, Mindshare, 2020.

IN ECOM, WE WILL SEE BRANDS EMBRACE NEW TECH AS A RESULT

AND BUSINESSES

RE-ASSESS SALES

STRATEGIES

NOT THE ONLY CRISIS WE FACE

SUSTAINABLE COMMERCE

TAKEAWAYS

1 2 3

eCommerce shows tremendous opportunity. Transformation needs to happen quickly and focus on Customer Experience +

Connection.

Brace for a world of savvier, price conscious shoppers. Setting brand preferences now will bring long-term

advantage.

Covid-19 is reshaping shopper priorities.

Anticipate what will matter to consumers to become

future fit.