SES Hong Kong - eCommerce Essentials for Asia
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The document summarizes a presentation by Marcelo Wesseler from SingPost Commerce on eCommerce strategies. Key points include: - SingPost provides end-to-end eCommerce solutions including logistics, digital marketing, and analytics. - Customer lifetime value (CLV) should guide marketing budgets, with the goal of acquiring customers until their contribution exceeds the cost of acquisition. - Non-last click attribution, daily reporting, and focusing on the basics like delivery, price and inventory are important for success.
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SES Hong Kong - eCommerce Essentials for Asia
- 1. SES Hong Kong 2013 MarceloWesseler-SVP, SingposteCommerce marcelowesseler@singpost.com @mwesseler www.specommerce.com eCommerceattheheartofyourbusiness
- 2. Agenda 2 • SingPost Overview • eCommerce basics • Key Success Factors • Marketing Budgets, CLV & Attribution • Logistics • Reporting & Analytics • Traffic Generation • Onsite Optimization • Q&A
- 3. $2.2 billion market cap. A+ Credit Rating* 12 Logistics Centers 3 Call Centers 220+ countries via Mail Delivery & Courier Driving eCommerce In Asia HQ *Rating report by Standard & Poor 3 200+ eCommerce Clients
- 5. 5 Some of Our Clients
- 6. 6
- 8. The Basics – Part I • Range • Price • Reliable & Fast Delivery • Convenience
- 9. The Basics – Part II • Keep it simple but measure daily • Be Aware of Inventory Risks • Revenue = Visitors * Conversion * AOV • Success = - EBIT or Net Margin or - GM after logistics & marketing spend 9
- 10. eCommerce Success Factors Customer Experience Operational Excellence People Happy Customers & a Successful eCommerce Business
- 11. Customer Lifetime Value (CLV) • Golden Rule => your BUDGET • Acquire customers until marginal contribution is zero (marginal CLV – marginal CAC) • Guideposts • If data is not yet available, then spend up to the average, fully loaded gross profit of a customer’s first order. Alternatively… • Avg Monthly Revenue per Customer × Gross Margin per Customer • Monthly Churn Rate • Also, average order value (AOV) is a leading indicator of CLV • Rules of Thumb • At scale: • If your CLV is at least two times the cost of acquiring a new customer, with at least 1X coming in the first 12 months after acquisition, you’re in great shape. • If you’re doing any better than that, it’s irresponsible for you not to be spending more aggressively on marketing. • If your CLV/CAC ratio is less than two, then it’s worth reigning in your marketing spend until you grow into it. 11 ܸܮܥ ൌ ܷܴܲܣݔ െ ݏݐݏܥݔ ሺ1 െ ܹܥܥܣሻݔ ݊ ܺൌ1 െ ܥܣܥ Net present value of profits from a customer aka Customer Lifetime Contribution (CLTC) or Lifetime Value (LTV) =
- 12. CLV Drivers 12 Sources: Custora report derived from 72 million customers from 86 US retailers across 14 industries, June 2013 RJ Metrics Summer 2012 E-commerce Benchmark CLV is slightly higher for customers originating from FB than Google US$148 US$159
- 13. CLV Management Tip: Rubbish In, Bankruptcy Out CLV can be used to rationalize upfront marketing investment… BUT… beware tomorrow never arrives 1 3 Plan with the possibility that tomorrow is today. Payback Period < 12 months & NEVER rely on last click attribution only
- 14. Regional Distribution Center Model Store & Ship from our eCommerce Logistics Hub based in Hong Kong and Singapore Manufacturer SP eCommerce Logistics Hub Customer’s Home Air Freight Drop Ship Manufacturer SP eCommerce Logistics Hub Customer’s Home Air Freight Drop Ship Warehouse 14
- 15. Local Distribution Centers 15 Consumers have to be able to return items to the satellite hub in country “consider returns rates and cost in your business case”
- 16. 16 Tax Optimisation Malaysia Indonesia Japan South Korea Vietnam India Thailand Philippines Hong Kong Taiwan China Singapore Country Import duty Sales tax Additional tax Thailand 30% 7% Vietnam 20% 10% China 16% 17% Indonesia 15% 10% 2.5% (registered) or 7.5% (unregistered) importers Philippines 15% 12% South Korea 13% 10% Taiwan 11% 5% Trade promotion fee (0.04% CIF) India 10% 0% -Landing charges (1% CIF) -Countervailing duty (12% (CIFD + Landing charges) -Additional countervailing duty (4% (Duty + Landing charges + countervailing duty) Japan 9% 5% Hong Kong 0% 0% Singapore 0% 7% Malaysia 0% 10% Your supply chain logic will impact the duties and taxes payable across the region. *Duties and taxes are based on Levi’s 501 Jeans for men * * * High duties & taxes Moderate duties & taxes Low duties & taxes
- 18. 18 Daily SEO Reports not just PPC
- 19. Traffic Generation Methodology 19 Marketing Description PPC • Optimisation based on relevant and popular keywords to first drive awareness and then conversion Phase SEO • Site structure for higher rankings • Microdata & product rich snippets • Breadcrumbs best practices Display • Retargeting banners • Recapture funnel bounces • Ad performance optimisation Facebook • Facebook ads • Retargeting in Facebook Email/CRM • Abandoned cart recovery • Rewards and loyalty campaigns • Sales conversion channel Offline • Direct mail • Catalog mail • Partnerships Key KPIs • Cost per click • Click-through rate • Conversion rate • Keyword success • Average search ranking • % of revenue generated • Click-through rates • Assisted conversions • Conversion rate • Number of impressions • Click-through rate • Conversion rate • Open rate • Click-through rate • Conversion rate • Assisted conversions • Brand awareness • Lead generation • Lead generation • Lead generation • Conversion • Brand awareness • Lead generation • Conversion • Retention • Brand awareness • Lead generation Affiliates • Active affiliates • Conversion rate • Earnings per click • Affiliate network recruitment • Engage and educate affiliates • Affiliation incentivisation • Lead generation • Conversion
- 21. 21 The adidas Online Store was featured in Elle Magazine’s August 2013 edition
- 24. Summary • Range, Price, Reliable & Fast Delivery, Convenience • CLV is determining your budgets • Don’t use last click attribution • Enjoy analytics for breakfast • Keep it simple & focus on basics • Scalable delivery network
- 26. Inbound to Hong Kong eFulfillment in China – Direct Injection to China Operative Flow 26 Inbound clearance and consolidation in HK Local sorting in warehouse Delivery to end customer in China Pre-clearance by on-site customs X-ray scanningRelease of goods
- 27. LOGISTICSLOGISTICS WMS (HighJump)WMS (HighJump) Supplizer Order processingOrder processing Vendor managementVendor management Returns processingReturns processing INFRASTRUCTUREINFRASTRUCTURE Big Data Scalable Highly Available Secure Open API Partner Ecosystem CALL CENTER EMAIL MARKETING ANALYTICS BUSINESS INTELLIGENCE SOCIAL User/Role Database User/Role Database 1:1 Marketing / Promos 1:1 Marketing / Promos Products / Categorie s Products / Categorie s Shopping Cart Shopping Cart CheckoutCheckout Shared catalog Shared catalog Payment web service Payment web service PricingPricing Fraud web service Fraud web service Tax web service Tax web service Storefront manager Storefront manager Content manager Content manager WEB STOREFRONT Tracking Shipments Orders Returns Orders Inventory Orders Customers SP eCommerce Technology Architecture 27
- 28. Overview of marketing channels available.Size of circles represent average ROI for eCommerce businesses. SP Conversion Funnel 28
- 29. The 7 “C’s” CLV Management Traps 29 #2: CLV ARPU Costs CACWACC Churn Marketing department both spends and monitors (Finance should monitor) Purchased customers underperform organic on almost every metric. The variables are interdependent, not independent. • Raising price will increase churn • Increasing marketing spend will increase CAC and churn • Beefing up customer service to decrease churn will increase future costs. It’s a metric, not a strategy. You can’t win a fight with measuring tape
- 30. The 7 “C’s” CLV obsession creates blinders…instead, BE CREATIVE CLV obsession creates blinders that restrict creativeness & open-mindedness Scrappy, capital starved start-ups with no marketing budget are more likely to find ways to scale growth organically e.g. a PPT slide from Skype in its early days… 30 #2: