10 steps to create a sucessfull e-commerce strategy - 10 passi per creare un e-commerce di successo

The 10 steps to building a successful eCommerce strategy

Turin, 18 April, 2013

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Copyright © 2012 Accenture. All rights reserved. 2

Change Management

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The long journey from start-up to success


Start-up

Success

The long journey from start-up to success


2 - Business

Planning

3 - Channel

Integration

5 – Logistics

Evolution

6 - Direct

Marketing

7 – Commercial

Strategy

8 – Assortment

Planning

9 - Data Sheet

10 - User

Experience

Start-up

Succes

1 - Value

Proposition

4 - Organisation

Transformation

> Identify the reason why the customer should buy on a website and not

through a traditional shopping experience.

> We supply three truly distinct advantages

Step 1) Value proposition

6 Copyright © 2012 Accenture. All rights reserved.

“Hey, I have a new idea! We can create an eCommerce

opportunity with all the items that we don’t sell in the physical

store.

“We can also sell at full price – and with the addition of the

delivery costs…. selling online is very easy!!”

How can we win in the most competitive scenario ever?




YOU



YOU

YOUR VALUE

PROPOSITION

Even the luxury fashion market is evolving


> The customer gives

less value to the idea of

Brand, if he can buy

clothes, shoes and

accessories.

> The asymmetric value

perception is leveraged

by the new business

model.

> The international

crisis is the primary

reason for this trend.

> Succesfull eCommerce needs investments that are conformed to

expected results.

> The undestimation of the requirements for eCommerce (deficit of

financial resources) is the first obstacle in obtaining success.

Step 2) Business planning


“Mmmm… I can create a website using Magento and

manage the invoices with a free plugin. Then we could focus

on agile: we’ll get away with € 100. Ha-ha!

“I don’t understand these dummies who pay millions and

millions on an eCommerce website!”


The correlation between levers, decisions and business plan

Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistics

Platform

Team

Catalogue/Asset

Warehouse

Customer service

> Planning an eCommerce

business means:

> Reaching the break-even.

> Granting the profitability.

> Building a scalable

model.

> Supporting the business

balance means:

> Balancing

- capital investment

- operative cost.

> Defining a "make" or "buy"

scenario based on

company needs.



Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistic

Platform

Team

Catalogue / Asset

Warehouse

Customer service

License

eCommerce

Website

Order Management

LED

D.M.D.

Delivery

Marketing

Operations

Trading

Communication

Return

Copyright

Translation

Shooting

Organic

LED

D.M.D.

Average price

# items


business means:



> Building a scalable model.


balance means:

> Balancing


- operative cost.


scenario based on

company needs.



Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistic

Platform

Team

Catalogue / Asset

Warehouse

Customer service

Licence

eCommerce

Website

Order mgmt.

LED

D.M.D.

Delivery

Marketing

Operations

Trading

Communication

Return

Copyright

Translation

Shooting

Organic

LED

D.M.D.

Average price

# items


business mean:



> Building a scalable model.


balance means:

> Balancing


- operative cost


scenario based on

company needs.

Increase

customer



Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistic

Platform

Team

Catalogue / Asset

Warehouse

Customer service

Licence

eCommerce

Website

Order Management

LED

D.M.D.

Delivery

Marketing

Operations

Trading

Communication

Return

Copyright

Translation

Shooting

Organic

LED

D.M.D.

Average price

# items


business means:

> Reaching the break

event.



model.


balance means:

> Balancing


- operative cost.

> Defining a "make" or

"buy" scenario based on

company needs.

Increase

conversion



Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistic

Platform

Team

Catalogue / Asset

Warehouse

Customer service

Licence

eCommerce

Website

Order Management

LED

D.M.D.

Delivery

Marketing

Operations

Trading

Communication

Return

Copyright

Translation

Shooting

Organic

LED

D.M.D.

Average price

# items


business means:


event.



model.


balance means:

> Balancing


- operative cost



company needs.

Approach

emerging

markets

quickly

Warehouse



Profit ROI

Revenues

Opex

Capex

Traffic

Conversion

ATV

Marketing

Logistic

Platform

Team

Catalogue / Asset

Warehouse

Customer service

Licence

eCommerce

Website

Order Management

LED

D.M.D.

Delivery

Marketing

Operations

Trading

Communication

Return

Copyright

Translation

Shooting

Organic

LED

D.M.D.

Average price

# items


business means:


event.



model.


balance means:

> Balancing


- operative cost



company needs.

Studio

Improve

product

content

quality

> During his customer journey, the customer has the perception of one unique

company, because he doesn’t separate his experience between online and

physical shopping.

> The website supports the physical shops and puts the customers in

contact with the company.

Step 3) Channel Integration


“So… we can’t do online discounts, otherwise the

people won’t go to the physical store; the online

store mustn’t cannibalise the physical store.”

OFFLINE

20

Cross-channel customer journey

SEARCH Natural Search, SEO

Paid Search, SEM

Search Capability

Landing Page Optimisation

iMEDIA Standard Display Ads

Rich Media Ads

Broadband Video

Web TV

WEB SITE Branded Sites

Affiliate Site

Promotional Site

Usability & Accessibility

Analytics, Web Site Optimisation

PARTNERSHIPS Content Syndication

Comparison Sites, Shopping Directories

Sponsorships, Co-branding

Philanthropic Cause Marketing

E-COMMERCE Direct to Consumer

Where to Buy Functionality

Branded Storefront

Sell Direct on Third-Party Site

Technical Platform

MOBILE Mobile Browser

Mobile Aps

QR Codes, GPS RFID POS

Text Messaging

CRM Loyalty Platform

Behavioural Targeting & Acquisition

Cross-sell Engine

Retention & WinBack

Campaigns, Email, Reporting

SOCIAL Online Video Communities,

Answer Forums Word-of-mouth, Buzz, Referrals

Wikis, blogs, Crowd Sourcing

Product Innovation

Multichannel Customer Journey

FOUNDATION

AWARENESS

ADVOCACY

PURCHASE

CONSIDERATION

LOYALTY

ONLINE

Identification of Need

Search for Solution

Evaluate Alternatives

Product Details

Visit to the store

Purchase Decision

Visit to the brand website

Compare Offers

Online Purchase

Social Interaction

Online Registration

Mobile App

Offline Purchase

DIGITAL CAPABILITIES TO LEVERAGE

19% 81% Time Spent

Copyright © 2012 Accenture. All rights reserved.

> eCommerce must be organised like a new company: a fractal of the original

one, but with new knowledge and delivery capabilities appropriate to the

potential business.

> We need to create an internal organisation able to support and deliver

the expected business.

Step 4) Organisation transformation


“We can dismiss the webmaster guy and employ another

guy with some digital competences…

“So, have you ever seen how much communication we have

done in print, brochures, catalogues!? It will be faster and

more efficent.”


Typical eCommerce functions

Marketing &

CRM

Commercial &

Merchandising

eCommerce

functions

Technology&

Project

Management

Operation &

Customer

Service

Content &

Creative

> Aligning

campaigns with

off-line marketing

> Newsletters

> Affiliates

> Channel Advisor

> Search Engine

Optimisation /

Manage Third-

Party Agency

> Site Behaviour

Analysis

> CRM

> Assortment

Planning

> Pricing &

Promotions

> Article Setup &

Hierarchy

> Product

Enrichment

> Site Design

> Text & Images

> Editorials

> Third-Party

Agency

Management

> Page Design and

Site Usability

> Cross Channel

Compatibility –

Web vs. Mobile

> Order placement

> Queries on orders

> Out of stock

Management

> Problem

Management, e.g.

faulty, never

arrived

> Returns

Management

> Fraud

Management

> General Queries

> Issue Resolution

(e.g. stability,

content

publishing)

> Functional

Enhancement

> Third-Party IT

Management

> Technology

Scaling

23

Organisational structure – Headcount benchmark

> eCommerce has a strong component that impacts on management costs and

on the satisfaction of the customers – and subsequently on the sales volume.

> eCommerce logistics needs to be perceived alongside processes,

means and dedicated stakeholders.

Step 5) Logistics evolution


“We already have 200 stores with

200 small warehouses… Aha! I’ll use those!

Don’t you understand how many items that is?

I’ll certainly beat the pure-player.”


Distribution strategy and operating model definition

25

Stock Management

Need vs. Capability

1 Dedicated WH

Whls /

Retail B2C

Shared stock and WH

Whls /

Retail B2C

Dedicated stock,

same WH

Whls /

Retail B2C

Store network stock

Retail B2C

Logistics

Network Strategy

2

Operating

Model / Warehouse

3 In-house Outsourcing to

eCommerce Provider Outsourcing to LSP

Fu

nctio

na

l de

pth

In-house

Level of outsourcing

LSP

e-provider

Fu

nctio

na

l de

pth

In-house


LSP

Fu

nctio

na

l de

pth

In-house


3PL

e-provider e-provider

Centralised Decentralised +

store network leverage Decentralised

> The opening of an eCommerce website is like an empty store in a street

without access (and we divide between contact with high CTR of 30 percent

and visitors with CR of 0,8 percent).

> We need to crowd our online store with potential customers in the same

way that we could do in a physical store.

Step 6) Direct marketing


“We will do € 2.000.000 of turnover the first year because I

have a lot of registered users, don’t you know? 150.000 users

with the newsletter!!”

The customer acquisition strategy to reach goals


> We can influence the

visitor volume using

different acquisition

channels and

performance strategies.

> The conversion rate is

influenced by a mix

of commercial and

UX elements.

> The average ticket is

influenced by

assortment strategies.

> Customer reactivation

is strategic.

The customer acquisition strategy to reach goals


Click

Through

Conversion

Traffic

Turnover

Commercial

Levers

Transactions

Organic Lead

Awareness

Information

Acquisition

Customer

Thrust

User

Experience

Rea

cti

va

tio

n

> We can influence the

visitor volume using

different acquisition

channels and

performance strategies.

> The conversion rate is

influenced by a mix

of commercial and

UX elements.

> The average ticket is

influenced by

assortment strategies.

> Customer reactivation

is strategic.

> What is the price proposed by our competitors and players?

> We have to study a price strategy that is consistent with digital

customers’ expectations.

Step 7) Commercial strategy


“Given that I don’t know what I should buy online, I try to buy all

the items left over from sales…

I already have partners who provide me with extraordinary deals…

so I’m sure, I’m not taking any risk…”


Cross-channel strategy and planning model

Sa

les

vo

lum

e

«Body»

Product variety

«Long Tail»

Top seller Niche product with higer margin

Cross Channel Commercial Model > To reach the business

objectvies we need to

balance:

> The top selling

product that drive

volumes.

> Niche products that

preserve margins.

> To grant the success of

an eCommerce project

we need to design a

cross-channel

strategy to grant:

> Turnover.

> Profitability.


Cross-channel strategy and planning model

Historical

Data

Offline

Benchmark Online

Benchmark

Market

Research

So

urc

es

Assortment

Optimisation

Price Optimisation

Sales Forecasting

Assortment Definition

Profitability Analysis

Revision of the Sets

Price management Rules

Base Price and Margins

Flexibility Analysis

Baseline Normalisation

Forecast of the Volumes of the Sales

Promotional Uplift Calculation

Promo Optimisation

Simulation Promotional ROI

Definition of the Promotional Tactic

Promotional Strength

Ca

pa

bil

itie

s

On-ine

Search Trend

Cross Channel Commercial Model

1 2 3

4

> To reach the business

objectvies we need to

balance:

> The top selling

product that drive

volumes.

> Niche products that

preserve margins.

> To grant the success of

an eCommerce project

we need to design a

cross-channel

strategy to grant:

> Turnover.

> Profitability.

> Online, the customer tries to find all the items he can’t find in the little stores

close to home.

> The assortment should focus on blockbusters with premium prices and

long-tails, which could balance the marginality.

Step 8) Assortment planning


“So, online we could sell only a few of each item (by size); we

would have an ample assortment. Otherwise there would be

an overcharge of stock costs.”

The ideal assortment strategy for my business model


> An attractive strategy

with the the ability to

win could be

summarised in:

> Traffic: good

exposure.

> Leader: preferential

supplier.

> Opportunistic: a

selective approach

on product

identification.

> Profit: wide set to

ease the shopping

experience.

Fashion Food & Spirits Tech

Luxury Leisure & Sport Travel & Holidays

The strategy to win


> An attractive strategy

with the the ability to

win could be

summarised in:

> Traffic: good

exposure.

> Leader: preferential

supplier.

> Opportunistic: a

selective approach

on product

identification.

> Profit: wide set to

ease the shopping

experience.

Margin

Service

Regularity

Penetration

Exchange

Sensitivity for Customer

& Localisation

Periodicy

Image

Traffic

Ec

on

om

ic im

po

rtan

ce

pe

r R

eta

ile

r

+

+

-

-

Amounts

Marginality

Rotation

TOP

TOP

> The decision to make an online purchase requires more time and this is

based on specific parameters that are more rational than emotional.

> Website content – which should be good – influences approximately

half of our customers (total of online purchase and store). This content

is conditional to product sector.

Step 9) Data sheet


“Hey! It’s very simple: I do all the data sheets myself and I

copy the images and the descriptions from the

producer’s website. The customers can easily see what

it is.”

Product content influences through the overall customer interaction

How product content influences interaction with the customer


> Reduce the number of

returns.

> Reduce number of

refunds.


calls to customer-service.

> Increase social-sharing.

> Increase click-through rate

from advertising.

> Drive additional traffic to

store.

> Increase conversion-rate.

> Increase up-selling.

> Increase cross-selling.

Source: Estats

“Product descriptions can play a key role in reducing returns rate: an item that

does not match its product description will be returned in 61% of cases.

Providing descriptive adjectives concerning the "look and feel" of a product can be

decisive to increase conversion-rate such as those used by Asos (see fig.),.”

Source: Estats

How product content influences interaction with the customer


Pre-sales

1

Conversion

2

Post-sales

3


returns.

> Reduce number of

refunds.


calls to customer-service.

> Increase social-sharing.

> Increase click-through rate

from advertising.

> Drive additional traffic to

store.

> Increase conversion-rate.

> Increase up-selling.

> Increase cross-selling.

Source: Estats

Product content influences

through the overall customer interaction

> eCommerce shouldn’t only be nice, but it hs to be clear, linear and saleable.

> An eCommerce site should be designed to match business objectives

and the measured objective KPI of conversion.

Step 10) User experience (UX)


(Fashion) “Therefore the website homepage should look like a

shop window of my store.”

(Retail) “Therefore the website homepage should look like a

leaflet.”

> UX is one of the most

powerfull levers to

influence the conversion

of our eCommerce.

> UX need to consider

many different customer

needs (such as content

strategy, information

architecture

functionality, platforms,

user interface, usability

and accessibility).

> To define a performing

UX we need to follow a

structured process.

User experience is a scientific process that influences

conversion


User experience is a scientific process that influences

conversion


> UX is one of the most

powerfull levers to

influence the conversion

of our eCommerce.

> UX need to consider

many different customer

needs (such as content

strategy, information

architecture

functionality, platforms,

user interface, usability

and accessibility).

> To define a performing

UX we need to follow a

structured process.


eCommerce success is barely related to

technological aspects: the key points are

strategy and business transformation.

SO WHAT ?

1

We need to define a successful commercial

strategy starting from online potential,

attractiveness and the ability to win.

The customer experience needs to be

designed with a structured approach and

considering all interaction channels

2

3


Thank you!

Federico Gasparotto Digital Marketing Offering Lead

Accenture Interactive

Mail: [email protected]

Phone: +39-331-7550490

Blog: www.gasparotto.biz

mailto:[email protected]

http://www.gasparotto.biz/

10 steps to create a sucessfull e-commerce strategy - 10 passi per creare un e-commerce di successo

Business

competitive scenario

new idea

new jerseylondon

customer givesless value

new businessmodel

succesfull ecommerce

long journey

project management