eCommerce: The Crucible of Customer Engagement

eCOMMERCE:

THE CRUCIBLE OF CUSTOMER ENGAGEMENT

DMA 2014 OCTOBER 28 SAN DIEGO

DMA 28

DMA 2014eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT

cru·ci·ble

Pot in which substances are heated to

a very high temperature or melted

Difficult test or challenge

Situation that forces people to change

or make difficult decisions



DATA


CREATIVITY


CUSTOMER

ENGAGEMENT


WHY eCOMMERCE


eCOMMERCE IS HUGE

$ 1.5 T $0.9 T

B2C B2B > 30% Intent to Buy Online

Airline TicketsClothing & ShoesHotels & ToursEvent Tickets

BooksElectronic Equipment

Mobile PhonesCosmetics

Sporting GoodsComputer Hardware


IT’S GETTING MORE GLOBAL

$1.0 B

#1 for

Browsing

1.2B

PeoplePer day


EVERY MAJOR

PLATFORM IS ON BOARD


MOBILE & MILLENNIALS

DRIVE THE FUTURE

Mobile commerceGrowing 2X faster

Millennials +56% more likely to

shop online


THE PROBLEM WITH eCOMMERCE

•Silo’d into the IT organization

•Focused just on the transaction and only on

the PC-web channel

•Crashed on Thanksgiving and at Christmas


CONTINUOUS COMMERCE

THE ENLIGHTENED VIEW:

PHYSICAL STORE

DIGITAL STORE

1. OMNICHANNEL

One Transaction

Lifetime Value

2. RELATIONSHIP

ContinuousCommerce

3. EXPERIENCE


WHAT LEADERS ARE DOING


FORMER VP, MARKETING,AMERICAS

JOHN MCDONALD


TRAINING TO WORK FOR AN AIRLINE



THE SELLING CHALLENGE:

GROWING BEYOND LONDON



THE OPPORTUNITY:

NORTH AMERICA — INDIA



PUTTING THE CUSTOMER AT

THE HEART OF SELLING


FROM DATA TO CUSTOMER INSIGHT



WHO, WHAT, WHERE, WHEN


RESULTS



£10+million

#01

xoxo

65%


60%completion


Visit Mum.

DMA 2014E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT

RYAN CRAVER

SVP OF CORPORATE STRATEGYHUDSON’S BAY COMPANY

@ryanmcraver


The “death” of retail has

been driven by headlines

and data showing:

Holiday season Brick &

Mortar traffic has declined

nearly 50% since 2010

Total Retail Foot Traffic

November – December1

0

10

20

30

40

Category 1

2010 2011 2012 2013

Bil

lio

n v

isit

s

RETAIL FOOT TRAFFIC

HAS DECLINED


Other

30%41% 15% 8% 7%

37% 11% 4%47% 2%

2010

2014

“EYE SHARE” HAS SHIFTED

DRAMATICALLY


MCOMMERCE IS DRIVING ECOMMERCE

US Retail eCommerce Sales1

$0

$175

$350

$525

$700

2012 2013 2014 2015 2016 2017 2018

Tota

l Sal

es (b

illio

ns)

mC

omm

erce as % of R

etail eCom

merce S

alesTraditional mCommerce

1 eMarketer, April 2014. Note: Includes products or services ordered using internet via mobile devices, regardless of the method of payment or fulfillment; excludes travel and event tickets; includes sales on tablets.

‣ eCommerce is expected to

grow 87% from 2013 to 2018

whilst mCommerce is

expected to grow 157%

‣By 2018, mCommerce will

account for 27% of overall US

eCommerce Sales


CONTENT IN THE DIGITAL UNIVERSE IS

EXPERIENCING TREMENDOUS GROWTH

‣ Two thirds of total digital

universe is consumed and

created by consumers via

video watching, social

media usage, image

sharing

1 IDC Digital Universe, data as of 5/14. Reference from @KPCB Internet Trends.Note: 1 petabyte = 1mm gigabytes, 1 zetabyte = 1 mm petabytes.

0

3.3

6.5

9.8

13.0

Digital Universe Content1

2005 2016

2013 (+50% Y/Y)

Ze

ta

byte

s o

f D

ata


0%

25%

50%

75%

100%

Discovery Trial Purchase Pickup Return

Apparel & Accessories

Computer & Electronics

Fine Jewelry

Health & Beauty & Furniture Furniture

Computer & Electronics

Furniture

Health & Beauty

Furniture

Health & Beauty

Highest In-Store Preference Average In-Store Preference Lowest In-Store Preference

CUSTOMER PREFERENCE FOR IN-STORE

VS. CLICK VARIES BY DEPARTMENT

1 A.T. Kearney Omnichannel Shopping Preferences Study, July 2014. n=2,504 respondents and r=8,518 journeys


NO CUSTOMER IS BINARY, 100% BRICK OR

TOUCH/CLICK

‣ Visits mall to shop on

weekends or after

work, browses in-store

‣ Reviews print media to

learn of sales, brands,

and collect coupons

‣ Slow transition to

digital shopping

‣ Visits mall or specific

store to shop, browses

online and in-store

‣ Reviews mix of media,

subscribes to favorite

brands and retailers

‣ Prefers to shop in-

store, when shopping

online keeps it familiar

‣ Visits store to try-on or

see product, browses

mostly online

‣ Uses social sites or

affiliates to browse and

learn of brands/sales

‣ Comfortable to buy

online, mobile next

‣ Visits store just to try-

on or see product,

prefers to shop online

‣ Uses any social site or

affiliate to collect

offers and try new

brands

‣ Seeks best price and

free shipping/returns

Leisure Researched Webroomer Showroomer

CLICK/TOUCHBRICK


EMERGING TRENDS

1

2

Social Media > Social Commerce

On-Demand/Instant Gratification Marketplaces

Location Marketing3


Use

rs

Time

SOCIAL PLATFORMS CAN BE

GROUPED BY GROWTH RATE

MATURE

ACCELERATED

STEADY

DECLINE


Customer Service

Commerce

Pe

rso

na

l S

ha

rin

g

Ne

ws

SOCIAL PLATFORMS CAN BE GROUPED BY

CURRENT USE CASE


Customer Service

Commerce

Pe

rso

na

l S

ha

rin

g

Ne

ws

EVENTUALLY ALL PLATFORMS WILL

MONETIZE THROUGH COMMERCE


EMERGING TRENDS

1

2



Location Marketing3


QUERYING CUSTOMER SERVICE

‣ Contacting Retailer via Phone, Email or In-Store

‣ 24/7/364 Public Posting via Social Media Channel


PEOPLE MOVING

‣ Hailing a Cab ‣ On Demand Cab or Car (via Uber)


FINDING A PLACE TO STAY

‣ Direct Hotel Booking via Travel Agent, Phone or Website

‣ Booking Short Term Rentals By Couch, Shared Room or Entire Home (via airBnB)


EATING DINNER

‣ Wait for Check and Checkout at Mercy of Restaurant and Server

‣ Pay and Split Check Whenever Ready (via Cover & OpenTable)


REQUESTING DELIVERY

‣ On-Demand Retailer Batch Selection with Pre-Selected Delivery Times

‣ Delivery via Parcel Companies in 1 – 5 Days


OUTSOURCING CHORES

‣ Packing and Shipping Boxes to Ship

‣ Snap a Photo and Have Courier Pack and Ship (via Shyp)


PURCHASING LOCAL GOODS

‣ Access to Millions of “Local is Global” Products (via Etsy)

‣ Attending Craft Fairs


PERSONAL SHOPPING

‣ Pull Based In-Store Personal Shopping

‣ Initial Stylist Visit with Monthly Push Based Subscription of Product (via Trunk Club, Frank & Oak)


PERSONAL STYLING

‣ In-Store Visit & Makeover ‣ On-Demand Stylist Visit atLocation of Choice for Beauty (via Glamsquad)


MALL BROWSING

‣ Visiting Malls ‣ Hundreds of Brands at Fingertips with One Click Checkout (via Spring)


ADVERTISING PRODUCT

‣ Smarter, Targeted Advertising using Push Notifications (via Beacons)

‣ “Dumb” Advertising


EMERGING TRENDS

1

2



Location Marketing3


MOBILE EMPOWERS

CUSTOMERS IN-STORE

Customers of all ages use smartphone in-store at least sometimes…1

1 Thrive Analytics & Local Search Association, January 2014. N=1,058

97% 91%

81% 69%

Gen X (30-43) Gen Y (18-29)

Older Boomers

& Seniors (54+)

Young Boomers

(44-53)


USING MOBILE LOCATION DRIVES

MORE PURPOSED FEET

Banner Ads Category Search Location Push

Conversion rate in low single

percentage

Conversion rate in mid single

percentage

Conversion rate in high single/low

double percentage


BEACONS DRIVE 2-3X HIGH

ENGAGEMENT

‣Beacon deployment through 5 major apps

with very distinct audiences in 10 stores

‣ Initial pilot drove 2-3x open and conversion

rates of typical banner campaigns

‣Additional beacon use cases (social,

checkout, etc.) are continually being

evaluated


THE NEW RETAIL

‣ eCommerce continues to evolve and drive sales comps for most retailers.

‣ Each customer bridges offline and online retail in a different way yet customer service expectations remain incredibly high.

‣ Location based marketing is in the early stages with initial tests providing high engagement rates.


FIVE BIG TAKEAWAYS ON eCOMMERCE

1. It is an unstoppable global force

2. Put it at the center, not on the side

3. Think Continuous Commerce, not just the transaction

4. Mobile shows the way

5. Bet at least one chapter of your career on eCommerce

eCommerce: The Crucible of Customer Engagement

Retail

Transcript of eCommerce: The Crucible of Customer Engagement