Today at the Direct Marketing Association’s annual conference, DMA2014, the Global Event for Data-Driven Marketers, OgilvyOne Chairman and CEO, Brian Fetherstonhaugh, presented “eCommerce: The Crucible of Customer Engagement.” Joined by John McDonald, former VP, Marketing, Americas, British Airways and Ryan Craver, SVP, Strategy for Hudson’s Bay Company, Brian explored a more enlightened approach to eCommerce, one that is omnichannel, relationship-focused and experiential.

1. eCOMMERCE:
THE CRUCIBLE OF
CUSTOMER ENGAGEMENT
DMA 28
DMA 2014 OCTOBER 28 SAN DIEGO

2. 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
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

3. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

4. DATA
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

5. CREATIVITY
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

6. CUSTOMER
ENGAGEMENT
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

7. WHY eCOMMERCE
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

8. eCOMMERCE IS HUGE
B2C B2B > 30% Intent to Buy Online
$ 1.5 T $0.9 T
Airline Tickets
Clothing & Shoes
Hotels & Tours
Event Tickets
Books
Electronic Equipment
Mobile Phones
Cosmetics
Sporting Goods
Computer Hardware
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

9. IT’S GETTING MORE GLOBAL
$1.0 B
#1 for
Browsing
1.2B
Per day People
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

10. EVERY MAJOR
PLATFORM IS ON BOARD
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

11. MOBILE & MILLENNIALS
DRIVE THE FUTURE
Mobile commerce
Growing 2X faster
Millennials
+56% more likely to
shop online
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

12. 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
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

13. THE ENLIGHTENED VIEW:
CONTINUOUS COMMERCE
1. OMNICHANNEL
PHYSICAL
STORE
DIGITAL
STORE
2. RELATIONSHIP
One Transaction
Continuous
Commerce
Lifetime Value
3. EXPERIENCE
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

14. WHAT LEADERS ARE DOING
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

15. FORMER VP, MARKETING,
AMERICAS
JOHN MCDONALD
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

16. TRAINING TO WORK FOR AN AIRLINE
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

17. THE SELLING CHALLENGE:
GROWING BEYOND LONDON
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

18. THE OPPORTUNITY:
NORTH AMERICA — INDIA
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

19. PUTTING THE CUSTOMER AT
THE HEART OF SELLING
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

20. FROM DATA TO CUSTOMER INSIGHT
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

21. WHO, WHAT, WHERE, WHEN
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

22. eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

23. RESULTS
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

24. 65%
£10+
million
#01
xoxo
60% completion
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

25. Visit Mum.
eCOMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

26. RYAN CRAVER
SVP OF CORPORATE STRATEGY
HUDSON’S BAY COMPANY
@ryanmcraver
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

27. RETAIL FOOT TRAFFIC
HAS DECLINED
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
40
30
20
10
0
Category 1 2010 2011 2012 2013
Billion visits
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

28. Other
“EYE SHARE” HAS SHIFTED
DRAMATICALLY
41% 30% 15% 8% 7%
37% 47% 11% 4% 2%
2010
2014
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

29. MCOMMERCE IS DRIVING ECOMMERCE
US Retail eCommerce Sales1
$700
$525
Total Sales (billions)
$350
$175
$0
2012
2013
2014
2015
2016
2017
2018
mCommerce as % of Retail eCommerce Sales
Traditional 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
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

30. 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
13.0
9.8
6.5
3.3
0
Digital Universe Content1
2013 (+50% Y/Y)
2005 2016
1 IDC Digital Universe, data as of 5/14. Reference from @KPCB Internet Trends.
Note: 1 petabyte = 1mm gigabytes, 1 zetabyte = 1 mm petabytes.
Zetabytes of Data
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

31. 100%
75%
50%
25%
0%
CUSTOMER PREFERENCE FOR IN-STORE
VS. CLICK VARIES BY DEPARTMENT
Discovery Trial Purchase Pickup Return
Apparel &
Accessories
Computer &
Electronics
Health & Beauty
& Furniture Furniture
Fine Jewelry
Computer &
Electronics
Health & Beauty
Furniture
Health & Beauty
Furniture
Highest In-Store Preference Average In-Store Preference Lowest In-Store Preference
1 A.T. Kearney Omnichannel Shopping Preferences Study, July 2014. n=2,504 respondents and r=8,518 journeys
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

32. NO CUSTOMER IS BINARY, 100% BRICK OR
TOUCH/CLICK
CLICK/TOUCH
Leisure Researched Webroomer Showroomer
BRICK
‣ 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
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

33. EMERGING TRENDS
1
2
Social Media > Social Commerce
On-Demand/Instant Gratification Marketplaces
3 Location Marketing
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

34. EMERGING TRENDS
1
2
Social Media > Social Commerce
On-Demand/Instant Gratification Marketplaces
3 Location Marketing
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

35. Users
SOCIAL PLATFORMS CAN BE
GROUPED BY GROWTH RATE
Time
DECLINE
MATURE
STEADY
ACCELERATED
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

36. SOCIAL PLATFORMS CAN BE GROUPED BY
CURRENT USE CASE
Customer Service
Commerce
Personal Sharing
News
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

37. EVENTUALLY ALL PLATFORMS WILL
MONETIZE THROUGH COMMERCE
Customer Service
Commerce
Personal Sharing
News
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

38. EVENTUALLY ALL PLATFORMS WILL
MONETIZE THROUGH COMMERCE
Customer Service
Commerce
Personal Sharing
News
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

39. EMERGING TRENDS
1
2
Social Media > Social Commerce
On-Demand/Instant Gratification Marketplaces
3 Location Marketing
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

40. QUERYING CUSTOMER SERVICE
‣ Contacting Retailer via
Phone, Email or In-Store
‣ 24/7/364 Public Posting via
Social Media Channel
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

41. PEOPLE MOVING
‣ Hailing a Cab ‣ On Demand Cab or Car
(via Uber)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

42. 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)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

43. EATING DINNER
‣ Wait for Check and Checkout at
Mercy of Restaurant and Server
‣ Pay and Split Check Whenever
Ready (via Cover & OpenTable)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

44. REQUESTING DELIVERY
‣ On-Demand Retailer Batch Selection
with Pre-Selected Delivery Times
‣ Delivery via Parcel
Companies in 1 – 5 Days
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

45. OUTSOURCING CHORES
‣ Packing and Shipping
Boxes to Ship
‣ Snap a Photo and Have Courier
Pack and Ship (via Shyp)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

46. PURCHASING LOCAL GOODS
‣ Access to Millions of
“Local is Global” Products
(via Etsy)
‣ Attending Craft Fairs
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

47. PERSONAL SHOPPING
‣ Pull Based In-Store
Personal Shopping
‣ Initial Stylist Visit with Monthly Push
Based Subscription of Product
(via Trunk Club, Frank & Oak)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

48. PERSONAL STYLING
‣ In-Store Visit & Makeover ‣ On-Demand Stylist Visit at
Location of Choice for Beauty
(via Glamsquad)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

49. MALL BROWSING
‣ Visiting Malls ‣ Hundreds of Brands at
Fingertips with One Click
Checkout (via Spring)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

50. ADVERTISING PRODUCT
‣ Smarter, Targeted Advertising
using Push Notifications (via
Beacons)
‣ “Dumb” Advertising
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

51. EMERGING TRENDS
1
2
Social Media > Social Commerce
On-Demand/Instant Gratification Marketplaces
3 Location Marketing
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

52. 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%
Gen Y (18-29) Gen X (30-43)
81% 69%
Older Boomers
& Seniors (54+)
Young Boomers
(44-53)
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

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
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

54. 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
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

55. 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.
E-COMMERCE: THE CRUCIBLE OF CUSTOMER ENGAGEMENT DMA 2014

56. 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 DMA 2014