1. Bridging the gap between Offline and
Online Retailing:
Multi-Channel Retailing
8th webinar of the retail ecommerce series
an embitel initiative
19th May 2011
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2. Speaker
Founder
dmc digital media center GmbH,
Germany
www.dmc.de
Chairman
Embitel, India
www.embitel.com
Daniel Rebhorn
dr@dmc.de
• Studied Computer Science at University of Stuttgart
• Entrepreneur since 1992
• Investor and business angel for 5+ IT companies
• Working in retail e-Commerce for last 16 years
• Responsible for development of e-retail sites like Neckermann, Kodak
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3. Consumers choose their favorite channel
Search engines Price search portals
(Google…) (become.com …)
Brand /
Manufacturer Communities
(Nike …) (facebook …)
Online
Internet Pure Player marketplaces
(vente-privee…) Store (amazon…)
Brick-a-Mortar
Mailorder Retailer Retailer
(Sears …) (Walmart …)
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4. Complexity of sales channels at argos UK
• Attention step slide !!!!
Source: argos, AT Kerney
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5. Agenda
• Idea of Multi-Channel Retailing?
• Is Indian customer ready for Multi Channel Retailing?
• Does Multi - Channel Retailing leads to cannibalization
of your existing sales channel?
• Channel Integration in Multi-Channel Retailing
• Worldwide Case Studies
• Suggested approach for Multi Channel Retailing
• Multi - Channel Retailing Outlook
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7. Communication
Communication Communication n Communication
1
1
Consumer 1
Consumer 1 Consumer n Consumer
Mobil
e
Channel 1 Channel n Store Online-Shop
Prin
t …
Product mix
Product mix Product mix n
Product mix n
11 Product mix
Inventory 1
Inventory 1 Inventory n
Inventory n Inventory
Multi-Channel vs. Multi-Channel
Consumer doesn‘t care which channel he uses.
Only the brand experience has to be the same.
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8. Client behavior matrix
Preparation for buying(product information and price comparison)
Offline Online
4% 8%
„Digitaly converted “ „True Onliner“
Informs himself offline, Does everything online:
Online
but purchases online only informs himself,
also purchases online
Execution of
buying
„True Offliner“
Denies online, „RoPo“
Offline only informs himself offline Informs himself online,
and also purchases but purchases offline
offline
31% 57%
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9. Mapping of behavior matrix to verticals
„ Digitaly converted “ „True Onliner“
Books/Media
online
Consumer electronics
Apparels Sports goods
Execution of Lifestyle goods
buying Footwear
Furniture
Do-it-yourself (DIY)
Cosmetics
offline
„True Offliner“ „RoPo“
offline online
Preparation for buying(product information and price comparison)
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10. Forecast of non-food sales in Europe
100.0 % 100.0 %
Online only 6.9 % + 48% 10.2 %
Multi-Channel 9.5 % + 78% 16.9 %
Store only 83.6 % -13% 72.9 %
2009 2015
Source: Accenture, GfK
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11. Costs effects
Increase service level
After Sales activities (e.g. e-mailings)
Increase speed
Target offline-clients within online channel Easier aquisition
Multi-
Channel Value-driven client
Replace offline-Ads with online-Ads
aquisition
Costs
Retailing
Reduction of
Online as a self service platform
process costs
Selling via marketplaces, 3rd party portals, etc. Access to online crowd
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12. Is Indian customer ready for
Multi-Channel Retailing?
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14. Contributing factors
• Boom in Retail
• Coverage of broad-band internet,
including 3G mobile networks
• Web is primary source of information
= First point of contact
• Trust and experience leads to:
online buyer at second time
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15. Contributing factors
• Significant increase in mobile penetration –
M-Commerce / In-Store promotions/ Reviews and
comparison.
Example:
SMS/Bluetooth promotions at Spar- Hyper market
• An option to switch channel from interaction to
transaction.
• Major Players:
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16. Does Multi - Channel Retailing leads
to cannibalization of your existing
sales channel?
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17. Search Online Purchase Offline (RoPo)
Case Study, Oct 2009, Germany
Product segment: Apparels
13,9 % of Online sales is
initiated through local store
( = 0.6 bil. EUR) 13,9 %
Local stores
10,7 % of Offline sales is Online shop
initiated through online shop
10,7
% ( = 5.3 bil. EUR)
+ 4.7 bil. EUR
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18. Research Online Purchase Offline (RoPo)
42 % of
consumers are
using more than
half of their
„Shopping-
Time“ for online
information
reserach!
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20. Aspects of Multi-Channel Retailing
Pick up at Retail
Delivery to store
POS: Store
Pick-up-at-Retail Stock reservation in store
Pick up at Retail
Return-to-Retail Store finder for availibility in store
Return to Retail
Drive-to-Retail
Drive to Retail Return to Retail
Return product in store
Change product in store POS: Web
Refund in store
Pick up at Web
Drive to Retail
Return to Web
Online Marketing (Local SEM, Newsletter) to motivate
consumers to visit store Drive to Web
Confirmation mails with information about nearby store
„Book personal shopping assistant“
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21. Aspects of Multi-Channel Retailing
Pick up at Web
Longtail in Retail
POS: Filiale Online order of sold-out
products
Pick up at Retail Order in store, deliver to home
Return to Retail Return to Web
Drive to Retail Return via online
distribution channel
POS: Web
Drive to Web
Pick up at Web
Promote URL in store (e.g. bags)
Return to Web
Vouchers to promote Webshop
Drive to Web
Customer card services in Web
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24. Benchmark from TOP 50 Online Retailers (USA)
Rank Company Category Online Sales Growth
(in mil. US $) (2009)
2 Staples Inc. Office Supplies 9.800 27,3%
6 Waltmart.com Mass Merchant 3.500* 19,8%
10 Best Buy Co. Computer / Electronics 2.458 25%
16 J. C. Penney Co. Inc. Mass Merchant 1.500 0,0%
20 Macy‘s Inc. Mass Merchant 1.243 19,6%
24 L.L. Bean Inc. Apparel / Accessories 1.064 2,0%
29 Nordstrom Inc. Apparel / Accessories 784 14,3%
43 Kohl‘s Corp. Mass Merchant 492 38,1%
45 Saks Direct Apparel / Accessories 430 13,0%
50 J. Crew Group Inc. Apparel / Accessories 347 2,5%
Source: internetretailer.com
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25. Multi-Channel Retailing Benchmarks: Big Players
Percentage of
Online Sales
within Total
Saks US Retailer
16%
Sales EU Retailer
John Lewis
14%
12%
10% Nordstrom JC Penney
8%
Debenhams
6% Macy‘s
4%
Kohl‘s
2%
0% Sales in
2.000 4.000 6.000 8.000 10.000 11.000 12.000 14.000 16.000 18.000 mio USD
(2009/2010)
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26. Benchmark Multi-Channel: John Lewis
Reservation of products in store
• Online Sales 08/09 = 327 Mio. GBP
• 12% of total sales
• 8% of all online sales are picked
up in stores
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27. Benchmark Multi-Channel: Best Buy
„…pick up your order in as little as 45 minutes after you place it.“
• 95% more sales with multi-channel customers
• With 80% higher margin!
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31. Benchmark Multi-Channel: Argos
Reservation in store and availability across all channels
• 43% Multi-Channel sales of total
sales
• 22% of total sales through
„Check&Reserve“!
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32. Leading Multi-Channel retailer in UK: argos
Multi-Channel Sales : £ 1,9 bn.
(Total sales: £ 4,3 bn.) Multi-Channel sales
Multi-
Channel
Multi-Channel features realized: sales
43%
• Traffic of over 300 Millionen PIs
57%
• Visits up 25% other sales
Source: Argos (2010): Full-Year Results 2009
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33. Leading Multi-Channel retailer in UK: argos
MCR features used
Reserve-in-Store (Internet)
22%
Home Delivery (Internet)
Reserve-in-Store (Phone)
9%
57% Home Delivery (Phone)
2%
8% 2% Home Delivery (Store)
Other sales
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36. Success factors for MCR organisations
• Coordinated communication
>> Related divisions in the organisation:
Purchasing, Marketing, Stores
• Centralized CRM Stores
IT Purchasing
>> Related divisions in the organisation:
Customer Service, Marketing, Stores MCR
Customer
• Core category concept
Finance
Service
Marketing
>> Related divisions in the organisation:
Purchasing, Marketing, Stores
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37. Success factors for MCR organisations
• Common brand and corporate design
>> Related divisions in the organisation:
Marketing, (Stores)
• Complexity and cycle-time reduction
>> Related divisions in the organisation:
IT, Customer Service, Purchasing, Finance, Stores Stores
IT Purchasing
• Channel controlling
MCR
>> Related divisions in the organisation: Customer
Finance
Service
MCR team, Finance
Marketing
• Corporate culture
>> Related divisions in the organisation: all !
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38. Multi - Channel Retailing Outlook
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39. Future topics
Drive-In
Loyalty programs
Local online
marketing
Mobile Customer care
User profiling
Recommendations
Drive-In
User profiling
Predictions
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40. Mobile Commerce – an extension for retailing
Pre sales
M-Commerce
= E-Commerce
+ Environment
+ Timing
After sales
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42. Mobile links online channels with stores
Check-in at store, scan product and get your coupon
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43. Summary
Multi-Channel is not a future thing.
It is already there and successfully done.
Be aware of key success factors.
And prepare your organization.
Don’t be afraid of cannibalization yourself,
or you will be eaten by others.
Take care that consumers experience
is same on all channels.
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44. Our Company
• E-Commerce service company • 350+ employees in
since 1995 Stuttgart (HQ) and Berlin, Germany
• e-commerce projects in • 100+ employees in Bangalore
30+ countries (incl. Europe, US, • Offering Online Commerce services
Australia, India, Japan) in India and overseas
• Responsible for … – consulting
– 100+ Webshops – design
– 1.000.000.000+ USD – technology
E-Commerce Order Volume/year – hosting
– 5.000.000+ – shop management
E-Commerce Transactions/year – online marketing (SEO, SEM, SMM)
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45. List of our webinars
• # 1: E-Retailing - A perfect storm in India
• # 2: Essence of Retail e-Commerce and its optimization
• # 3: SEO - More Visibility, More Traffic & More Sales for free?
• # 4: Social Media Marketing
• # 5: Customer Acquisition & Retention
• # 6: Mobile Commerce for Retailers
• # 7: Online Retailing using facebook
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46. Thank you for your interest!
Any questions?
Daniel Rebhorn
dr@dmc.de
www.xing.com/profile/Daniel_Rebhorn
www.linkedin.com/in/danielrebhorn
embitel Technologies (India) Pvt Ltd.
www.embitel.com
www.smarte-commerce.com
www.linkedin.com/companies/embitel
www.facebook.com/embiteltechnologies
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