Today’s retail environment is highly influenced by new digital models which are becoming more mainstream, as consumers enjoy higher internet penetration and seek more convenience and value, as well as choice, personalized offers, and great service. This presentation demonstrates the most prominent trends in the e-commerce industry. This is an Executive Summary version of the presentation. To view the entire presentation, please contact Carmelon Digital Marketing.

1. E-Commerce Trends & Innovations
Hamutal Schieber | June, 2014

2. Introduction
• Today’s retail environment is highly influenced by new digital models which are becoming more
mainstream, as consumers enjoy higher internet penetration and seek more convenience and value, as
well as choice, personalized offers, and great service.
• This presentation demonstrates the most prominent trends in the e-commerce industry:
– Market Size & Breakdown
– Consumer Motivations / Barriers
– Market Trends & Innovations
– Case Studies – Amazon, Ebay and Direct to Consumer retailing.
This is an Executive Summary version of the presentation. To view the entire
presentation, please contact Carmelon Digital Marketing.

3. Digital Commerce is on the Rise
• A robust internet infrastructure and high internet penetration, increasingly at fast broadband speeds, have
been driving the online retail market. By 2017 nearly half (48%) of the world’s population will have internet
access, up from 32% in 2012 (Cisco VNI SA Forecast).
• Furthermore, a rise in the number of consumers accessing the internet through their mobile devices has
changed the way consumers now shop.
Source: International Telecommunication Union, World Telecommunication/ICT Development Report and database, and World
Bank estimates. Accessed June, 2014; Kantar Worldpanel, ACCELERATING THE GROWTH OF ECOMMERCE IN FMCG, 2014
Internet users (per 100 people) Global Mobile Phone Penetration

4. Mobile Commerce Share to Grow
• Goldman Sachs estimates that global m-commerce sales reached $133 billion in 2013, and that this
number will reach $626 billion in 2018, which is just shy of equaling total global e-commerce sales for
2013 of $638 billion.
• eMarketer estimates m-commerce sales to account for 26.5% of e-commerce sales by 2017, registering
growth of 347% since 2012.
• Source: PFS Web
In 2013, ASOS,
one of the leading
online fashion
retailers in the UK,
received a third of
the traffic on their
website from
mobile devices.

5. Digital Commerce: Market Size and Trends
• According to A.T. Kearney (2014), global online retail sales have increased 17% yearly since 2007.
Conlumino report estimates the market at just under $ 607 Billion in 2013, with projected 2017 revenues
of $ 1,027 Billion.
AT Kearney, Online Retail Is Front and Center in the Quest for Growth, 2014
Canadean/ Conlumino, Global Online Retailing Market Size and Forecast to 2017, 2013
Global Online Retailing Sales Forecasts
(USD billion), by Region, 2012 – 2017
Regions 2013 2017
CAGR (%)
2012 – 2017
North America 251.7 335.1 7.62%
Europe 173.3 255.8 10.67%
Asia Pacific 151.2 378.0 24.49%
Latin America 24.4 48.2 18.00%
Middle East and Africa 6.0 10.1 13.74%
Overall 606.8 1,027.3 13.76%
Source: Conlumino

6. Opportunities, Barriers & Retailers Strategies
Marketer StrategiesOpportunity / Barrier
• Utilizing virtual wallets, mobile payments, bank transfers
• new payment technologies are becoming more established
• Consumers in many countries do not own a credit cardPayments
• Communicating the security technology / level to the shopper
• Utilizing social identities to tailor personal offers and enjoy word of mouth
• Consumers do not trust information and payment data
sharing
• However, younger consumers do share vast amounts of
information with friends and brands to enjoy personal
offers
Security
• Price comparison aggregators – both by third parties and by retailers
• Loyalty schemes – special offers and discounts
• Best price guarantees aimed at building trust
• Better prices are one of the most prominent reasons for
shoppers to go online
• The ability to compare prices makes it easier to support
price-based decisions
• Pure Play and direct to consumer players are competing
with multi-channel retailers on prices
Prices
• Mobile commerce and social commerce enable retailers to reach
shoppers when its most convenient for them
• QR-Codes and Virtual Stores enable shoppers to shop on the go
• While online retailing assures hyper convenience,
consumers seek anytime/anywhere experiences where
online-only may not suffice.
Pure-Play /
Omnichannel
• Reviews and Recommendations provide assurance
• New tactics such as trials and rentals are taking advantage of the digital
platform, surpassing physical retailers
• Online retailers open physical stores to allow a closer product experience
• Consumers prefer to touch the products and try them
before they buy them. This is a main barrier to online-only
retailing.
Product
Experience
• Chats and multi-channel assistance (via phone as well as web and video)
• To replace store representatives, advisors and stylists are made available,
as well as bundling completing products
• A flesh and blood person may answer shoppers’ questions
more easily, thus eliminating frustration and leading to a
bigger sale.
Live Assistance

7. Shopper Needs: Online vs. Physical Retailing
• Esomar, Unlocking Success with Digital Shoppers: The e-commerce barriers and enablers that you need to
consider, 2013

8. Towards Omni-Channel Retailing
• The digital retailing future (Deloitte, 2014):
Deloitte, Last Mile Innovation: Driving Customer Experience, 2014

9. Market Trends Map
BestBetterGoodTrend / Strategy
Social Log-inLoyalty schemes, e-
mailing & couponing
Recommendations
based on previous
searches/ orders, Wish
Lists
Personal Touch
advisory services / personal
touch
Price comparison,
Price Guarantees
Ratings and reviewsBetter Decisions
S-Commerce, omni-
channel
M-Commerce, product
comparison tools
Bundling & item pairingHyper Convenience
Same-day delivery, 1-hour
time frame, instant tracking
Click & collect, lockers2 – 5 days delivery, free
shipping, package
tracking
Delivery & Shipment
Free trial, new business
models (e.g., rent it, sell it)
Multi channel service,
chats
Convenient cancellation
& return policies
Call for Action

10. Trends Map | Personal Touch
• Online retailers are using social media as a marketing platform to promote their online
stores and they are integrating with social media sites in order to take advantage of
the growing number of social media users and offer them personalized offers.
• Many retailers offer recommendations based on previous searches/ orders, Wish Lists
Ebay smart hashtags
• Facebook log-in is a common method to register
and receive personalized offers.
Via Social Media Utilization, loyalty schemes, special offers and wish lists
• The yoox.com loyalty program:
access to “private collection” rooms
and preferential treatment by the
customer service department.
Amazon “wish list”, for future shopping and/or for
sharing with friends.

11. Trends Map | Personal Touch
• Ebay Help Me Shop is a way to get shopping advice from the shoppers’ social media friends. The
shopper saves items from any website to the Help Me Shop bookmarklet in his/her browser bookmarks
bar, then invite friends to help him/her decide what to buy (video)
•

12. Trends Map | Better Decisions
• According to A.T. Kearney, consumers do their
homework before buying something online,
studying product features, pricing, shipping
options, and retailer return policies.
• Retailers offer online tools to help browse and
compare products for further convenience. Today,
the industry standard is to include reviews on the
website.
More consumers are relying on comparison shopping
engines (CSEs)—websites to select retailers that
offer the best overall product value.
• Aside from value, advisory services aimed at
replacing the live retail representative are
offered by many online retailers, such as
personal stylists and third party reviews. Also
emerging are virtual showrooms and fitting
rooms. Product reviews are also very common.
• Leading online fashion retailer, Asos, is
offering personal stylists on its website

13. Trends Map | Better Decisions
• Idealo.com is an online-only
fashion retailer that offers a wide
range of fashion products of
popular, niche, and emerging
brands in the fashion industry,
and is a part of the IDEALO
Group. The website was launched
in the year 2000 as a virtual
multi–brand fashion store.
• The website prominently
features decision-supporting
tools, such as review and
product videos.

14. Trends Map | Better Decisions
• eBay: Download coupons
and request samples

15. Trends Map | Better Decisions
• Retailers constantly tweak their online
pricing to capture consumer demand.
AT Kearney, Online Retail Is Front and Center in the Quest for Growth, 2014
Hypermarket E.Leclerc offers competitive prices online and also
operates a price comparison website, quiestlemoinscher.com
(translated: "which is the cheapest"), to evaluate prices across
retailers. E.Leclerc has in-store kiosks that allow customers to connect
to the website and compare prices.
Pricegrabber.com – comparison engine

16. Trends Map | Better Decisions | Price Guarantees
• Under its “Never Knowingly Undersold” promise, Johnlewis.com offers products at best prices supported by a very
strong reputation for service. John Lewis checks and matches the prices of its competitors — a key feature of its in-
store business — which in turn helps generate trust in its online operations among customers. If a user finds a
product cheaper on a competitor’s website, John Lewis will match the price when the item is purchased, or refund
the difference afterwards if the user has already made a purchase.

17. Trends Map | Hyper Convenience
• Retailers recognize that, to attract today’s sophisticated consumers, they must offer a
compelling online value proposition, and they are adjusting their online offerings accordingly.
Retailer websites have evolved into product encyclopedias with detailed product images,
specifications, suggested item pairings, and user reviews.
• M-Commerce, Social Commerce and omni-channel retailing are other ways to assure that
the retailer is reaching the shopper any time, anywhere.
• Carrefour 'Mon Panier’ mobile shopping enables
consumer to place their grocery shopping order from their
smartphone.
Clustering products can eliminate over-clutter
and save time.

18. Trends Map | Hyper Convenience
• Filtering tools can replace the salesperson,
when navigating vast amounts of products.
• Other type of navigation is through online
catalogues which directly lead to purchase (e.g.,
Ikea & Thinglink, 2012).
Crocs.com

19. Trends Map | Hyper Convenience
• On June, 2014, Amazon launched Fire, the first smartphone
designed by Amazon.
• It features two unique technologies - Dynamic Perspective and
Firefly. The Dynamic Perspective uses a new sensor system to
respond to the way you hold, view, and move Fire.
• The phone has two dedicated shopping/consumption functions,
designed to funnel more mobile commerce through Amazon.
• The Firefly button, Amazon's real-world shopping recognition
technology: Customers can use the phone's cameras to scan
physical objects in the real world, like a store, and Firefly will identify
them, and then provide a channel through which users may be able
to buy the objects more cheaply.

20. Trends Map | Hyper Convenience
• Amazon plans to offer a handheld device to more easily order groceries and other household goods
from home. The device, Dash, can scan product barcodes or users can speak the names of goods into
a microphone to log orders to AmazonFresh grocery delivery accounts.

21. Trends Map | Delivery & Shipment
• Free delivery is the most important
delivery option for the shoppers
(PwC, 2012).
• Retailers are pushing the envelope
on delivery options to enhance
online shopping convenience: from
click & collect, and personal
lockers, to same-day delivery.
PwC, Global Online Retail Survey, 2012

22. Trends Map | Delivery & Shipment
STELLAService:
sites span from 2
to 5.5 average
delivery days;
however Best in
Class websites
(such as Zappos,
Amazon) typically
outperformed retail
stores sites.
Amazon UK and ASOS “Follow My Parcel”
Tesco click & collect
Amazon same-day delivery

23. Trends Map | Call for Action
• Customer Service is of great importance to the shopper, as there are many elements with a potential to
become frustrating during the shopping process, including:
– Frustrating registration process
– Complicated cart management
– Long delivery time
– Problematic or insecure payment methods
– Bad return policies
– Inability to try the product
– Etc…

24. Trends Map | Call for Action
• Retailers are responding with expanded services such as free
trials, chats, and innovative models to offer greater overall
satisfaction.
• Retailers are providing a wider
variety of payment options to
enhance convenience.
• Rent the Runway is a popular
online website that allows
women to rent clothing and
accessories direct from the
runway.
• Glasses e-tailer Warby Parker can
deliver the shopper up to 5 glasses
frames for home try-on for 5 days,
with no charge.
• Amazon.com 1-Click key

25. Trends Map | Call for Action | Buy It / Sell It
• We are witnessing a significant trend towards
providing the shopper with a platform through which
he/she is able to sell goods. Several new competitors
have recently launched applications which enable
such transactions. The business model is enjoying a
certain commission per transaction. This is a win-win
model for both the seller (shopper) and the platform.
On June 2014 eBay launched a new iPhone app for sellers called
eBay Valet. It finds what items are worth, then sends them in for
valets to sell them for you. the seller takes a pictures of their
items, and the app gives them an estimated price.
They’ll send the seller a free prepaid box, and he can send items
to valets for now charge. Valets will then list his items for sale on
eBay, and ship them to buyers.
The seller gets 70% of the sale price.

26. Trends Map | Call for Action | Buy It / Sell It
• Asos.com offers to sell unwanted
clothes via the mobile app.
• Selling on Amazon is a program that enables
both individuals and businesses to sell their
products and inventory on Amazon.com

27. Key Performance Indicators
• Booz & Company, PwC
Digital commerce functionalities significantly improve individual KPIs and thereby are important drivers of
financial value. A Booz & Company / PwC report analyzed the effect of various functionalities on KPIs:

28. Direct to Consumer
• Many CPG brands have begun experimenting with
direct sales through e-commerce, usually via 3rd party
logistics / store back.
• While brands present this experience as merely
collecting insights on the shoppers, brands continue to
expand in this space and even venture into social
commerce.

29. Direct to Consumer | P&G
• In January 2010 Procter and
Gamble launched its eStore
to sell its range directly to
consumers. The intention was
to dip a toe in ecommerce
and to gain marketing insights
by engaging more directly
with consumers.
• The site lists the P&G brands.
• The company also utilizes
Facebook to sell certain
brands, which proved to be a
successful attempt.

30. Direct to Consumer | P&G
• An interesting feature, is an offer to a subscription on regular products.

31. Direct to Consumer | P&G
• The website gives access to reviews
and feedback on the P&G products.

32. Direct to Consumer | P&G
• P&G F-commerce includes “buy now” options on its Facebook Pages, and apps to promote
direct purchasing.
https://apps.facebook.com/pampersrewards

33. Direct To Consumer | Kimberly-Clark
• Kimberly-Clark says that Direct
to Consumer is an important
area for the company to
explore.
• The company fundamentally
recognizes that mobile devices
are becoming an intrinsic part
of the consumer’s life — and
this brings dynamic new
opportunities to connect with
them in compelling ways
leading up to and at the point
of purchase.
Huggies.com

34. Direct To Consumer | General Mills
• General Mills discovered that
households that are active on
the company’s sites, such as
Pillsbury.com and
BettyCrocker.com, “spend
20% to 25% more annually
than average households.
Customers get recipe ideas in
real time and also share
ideas, so they’re part of a
community.”
BettyCrocker.com

35. Direct To Consumer | Nespresso
• Nestle’s Nespresso division
is highly reliant on e-
commerce (as well as
phone reservations).
• The physical availability is
limited to brand boutiques.
• To serve as a consultant,
the website features
filtration and profiling tools
as well as a first-timer
selection box.

36. Direct To Consumer | Nestle
• The German
Nestle Marktplatz
website, lets
consumers try
Nestle products
from around the
world, experience
them and review
them. It also sells
local Nestle
products.
• The site
encourages
sharing of ideas
and insights.

37. Direct To Consumer | Nestle
• Product pages include description, price and
packaging, as well as ratings.

38. The research was conducted by:
Hamutal Schieber
Schieber Research | Market Research & Competitive Intelligence
www.researchci.com | hamutal@researchci.com
Executive Summary. For the full research - please contact Carmelon Digital Marketing
http://www.carmelon-digital.com
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