Subscription Commerce Key to Long-Lasting B2B Sales

Make the connections
that make a difference…
Because extraordinary connections
deliver extraordinary results
SAP Customer Experience Live
October 10-11, 2018
SAP Customer Experience
Isn’t it time you got married?
Why Subscription Commerce is the Key to
Long-Lasting B2B Sales
David Harrelson | SAP CX Live 2018

2
Forbes estimates
that the subscription
eCommerce market
will be more than
$20b by 2020.
$20b
Source: Forbes- The State of
Subscription Economy March 2018

3Let’s Talk Conversational Commerce | David K Harrelson | October 2018 © 2018 Capgemini. All Rights Reserved
Subscription Commerce | Understanding The Trends
SOURCE: The Subscription Economy Index- Zuora September 2018
Capgemini Analysis
Subscription Economy Index vs. S&P 500 Sales Growth Through Q2 2018
Growth By Region: EMEA & North America
5x
Faster
Overall, subscription businesses
grew revenues about 5 times
faster than S&P 500 company
revenues and U.S. retail sales
(18.1% versus 3.3% and 4.1%
respectively) from January 1,
2012 to June 30, 2018.
These Subscription Economy
Companies are allowing their
customers the adaptability to:
a) Pay-as-they-go,
b) Pay-per-monthly-
subscription or,
c) Pay via-long-term
contract.
Isn’t Time You Got Married | David K Harrelson | October 2018 © 2018 Capgemini. All Rights Reserved

4
Isn’t It Time You Got
Married
Subscription Commerce is about turning a one-
time transaction into recurring purchases.
We believe it’s about creating a long-lasting
relationship where each party provides what
the other needs: a marriage of sorts.
B2B relationships need to be much,
much deeper.
No matter what product/service you provide, you
need to retain and grow your customer base. How
do you do that when competitors are courting those
same customers?

UPDATED RESEARCH
 Conducted April – May 2018
 1,300 Sr. Executives
 750 Global Organizations
JOINT COLLABORATION w/MIT
 Authored in 2012
 157 Executive Interviews
 400 Global Enterprises
Subscription Commerce | Level Set On Digital Mastery
POINT OF VIEW PAPER
 Re-release @ SAP CX Live 2018
 Based upon Capgemini client
use cases

In 2018 we undertook new research to gauge whether large organizations
have mastered the art and the science of digital transformation.
Our Research Included:
• 1,300 Sr. Executives
• 750 Global Organizations
Our research indicates…organization are
struggling to fully realize their investments as
business successes.
Why?
• Difficulty adapting to the dizzying pace of change: AI,
IoT, eCommerce, Innovation, etc.
• Business model disruptions that challenging
traditional value chains

About Our Research | Organization Country of HQ
Source: Capgemini Digital Transformation Institute, Digital Mastery Survey; April–May 2018, N=1,338 respondents, 757 organizations; Capgemini Consulting and the MIT Center for Digital Business, “The Digital
Advantage: How digital leaders outperform their peers in every industry,” 2012, N=391 organizations.

Keys to Mastering B2B
Subscription Commerce:
1. Mastering Subscription Commerce
Means Leveraging Analytics to Know
Your Customers Intimately
Means Cultivating a Culture of
Digital Innovation & Testing
Ideas
Means Having Operations Aligned
w/Customer Expectations

Mastering Subscription
Commerce Means
Leveraging Analytics
To Know Your
Customers
Intimately
Isn’t It Time You Got Married

10
68% of Digital Masters use
analytics to better segment
their customers and more
than three out of five Digital
Masters regularly conduct
market research to gauge
their customers’ needs.
Nearly 60% of digital masters
also offer an integrated cross-
channel experience, using
digital technologies.
Only 22% of beginners can say
the same.
68%
Subscription Commerce | Customer Intimacy
Enterprises seeking to master Subscription Commerce Leverage Analytics to know
their customers intimately
Source: Capgemini Digital Transformation Institute, Digital Mastery Survey; April–May 2018, N=1,338 respondents, 757 organizations; Capgemini
Consulting and the MIT Center for Digital Business, “The Digital Advantage: How digital leaders outperform their peers in every industry,” 2012,
N=391 organizations.

11
UTC Announces
$300m investment
into Digital Innovation
Hub in Brooklyn, NY.
March 27, 2017
“One attraction of establishing a digital presence in New
York is the city's enormous base of customers using
UTC's elevators as well as heating and cooling
equipment.
UTC intends to monetize its data and analytics
capabilities across all brands to provide customer-centric,
subscription-based services to its existing clients and
couple it with value-added services leveraging IoT
capabilities.”
Vince Campisi,
SVP & Chief Digital Officer
United Technologies

12
All you need for a Volvo XC40
Subscription is your iPhone
The Care by Volvo app even lets
you use Apple Pay to subscribe.
Getting a new car is getting even easier these
days. BMW, Lexus, and Volvo have all started
selling cars via subscription. The Care by
Volvo program gives you an all-wheel-drive
XC40, insurance, routine maintenance, roadside
assistance and no money down for $600 a
month. That sounds pretty great, but it's also
super easy to sign up. Now you can sign up and
pay for your monthly car sub via in iOS app and
Apple Pay.
March 30, 2018

Commerce Means
Cultivating a Culture
of Innovation &
Testing Ideas

14
Subscription Commerce | Innovation & Testing
Two in three digital
masters claim they are
looking for innovations in
their value chains.
To accomplish this, digital
masters (66%) work with
a wide ecosystem of
partners, compared to
only 22% of beginners.
Digital masters also test
promising ideas quickly.

15
Subscription Commerce | Culture of Innovation
Organizations are not
paying enough attention
to the crucial ingredient
– digital culture
2017 Capgemini research found that a
majority of organizations (60%) point
to culture as the number one hurdle
to digital transformation.
By digital culture, we mean seven
essential attributes:
 Agility and flexibility
 Collaboration
 Customer-centricity
 Data-driven decision making
 Digital-first mindset
 Innovation
 Open culture

16Isn’t Time You Got Married | David K Harrelson | October 2018 © 2018 Capgemini. All Rights Reserved
Michelin Enhances
Business Model To
Include IoT & Analytics
Services
“We are no longer just a vendor, but the provider of a
solution” says Eric Chaniot Chief Digital Officer at tire &
rubber company Michelin. Michelin will be leveraging
IoT technologies in its manufacturing process to
enable subscription-based, commerce-driven
analytics services for its global clients to achieve
higher levels of value, product performance and uptime.
"In 10 years, 40 to 50 percent of big companies will be
irrelevant," says Chainiot. "If we don't want to
become irrelevant, we must become technology
companies.“
Eric Chaniot,
Chief Digital Officer- Michelin

Monsanto's Climate
Corp to expand digital
farming platform
August 2016
Monsanto acquires Climate Corp. to leverage & network IoT “in-
field sensors” to enable data and analytics to produce
subscription-based services for farmers & growers to
assess the scope of soil, weather and other data flowing into its
digital agriculture tools that help farmers increase crop
yields and reduce costs.
Monsanto has spent more than $1b in recent years expanding
its digital platform. “We view this as the Amazon of
agriculture, where we're bringing additional apps up
onto our platform and where the best apps win."
Hugh Grant
CEO Monsanto

Commerce Means
Having Operations
Aligned w/Customer
Expectations

19
68%
Subscription Commerce | Align Operations
Enterprises seeking to master Subscription Commerce Leverage Analytics to know
their customers intimately
Digital masters align their
operations to meet customer
demands. They realize the
importance of organizing
consistently around the needs
of the customer.

Subscription Commerce | Align Operations w/Client
Expectations
Subscription Commerce Mastery requires constantly identifying innovations,
explore new ideas, and experiment. It is not a surprise that they are faster to
make use of innovative technologies like AI and IoT.

Subscription Commerce | Align Operations w/Expectations
Digital Control Room –
Real-time operations visibility
from Shop Floor to Top Floor.
Predictive Maintenance –
Reduce unplanned downtime
through predictive algorithms
and SAP’s PdMS platform.
Manufacturing Execution
System – react in real time and
with the shop floor execution to
improve OEE.
Customer 360 – Deliver
more relevant, seamless and
personalized interactions to
customers and suppliers.
IoT‒ Track-and-Trace – Extend
your supply chain with real time
monitoring of moving assets
inside and outside your facilities.
Data Driven Responsive Supply
Chain – Reduce the time from
incident to reaction by establishing
E2E visibility on all supply chain
relevant data and operations.
Worker Safety – Improve
workplace safety and reduce risk
through employee vitals and PPE
monitoring.
IoT ‒ Machine Health
Monitoring – Preserve assets and
reduce downtime through real time
monitoring and analysis with the
utilization of IoT.

GLOBAL B2B DIGITAL
SALES TRANSFORMATION
Headquartered in Milwaukee, WI, Rockwell is a
113 year old company with 2017 revenues of
$6.3b. They operate in 80+ countries with
22,000 employees.
• Transition from physical CD software sales/syndication
to an “iTunes-like” self-service revenue model”
• Transform the customer experience with a
subscription-based eCommerce capability
• Enable automated quotation and order
management
• Create a digital billing model enabling bundled-
transactions, entitlements, metering & cross/up-sell
• Enable Contract Management capabilities
• Launched the SAP Commerce Cloud in 10 weeks

23
Subscription Commerce | Tangible Assets
Let’s Talk Conversational Commerce | David K Harrelson | October 2018 © 2018 Capgemini. All Rights Reserved
 Audience (Buyer) Shift: Age
Demographics have shifted(ing) &
They Want Self Service
 Content Consumption Shift:
Traditional Paper Catalog to
Digital/Omnichannel
 Transaction preferences Shift:
are trending digital vs. interpersonal
 Disintermediation: Amazon Halo
Effect (Channel Partner, Competitor,
Co-opitition?)
Capgemini Services & IP/Assets + SAP CX Bundled Portfolio
Market Demand
Requiring Model
Shifts

25
Speaker sessions at
Capgemini Booth P1
Date and
Time
Let’s Talk Conversational
Commerce
10 October
1:30 pm –
1:50 pm
Isn’t it time you got married?
Why subscription commerce is
key to B2B success
11 October
12:10 pm -
12:30 pm
David Harrelson has over 25 years of business
development, executive management and digital
consulting experience within high-growth organizations
covering a unique mix of software sales, digital strategy,
creative design and digital technology enablement in
both domestic and international markets.
David K Harrelson
Vice President | Digital Commerce GTM Leader
Contact Details:
Name : David K Harrelson
Twitter: Digital Dave 10
Phone no. : +1 630.229.5764
Email ID : david.harrelson@capgemini.com
Linkedin handle : linkedin.com/in/davidharrelson
Staying Connected

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Subscription Commerce Key to Long-Lasting B2B Sales

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Subscription Commerce Key to Long-Lasting B2B Sales