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It's Time for E-Commerce to Grow: Developing an E-commerce Strategy & Managing Transformations by Maha Rashad from Simon Kutcher & Partners
The document outlines strategies for developing an effective e-commerce and omni-channel approach, emphasizing the importance of understanding customer value and leveraging technology for data-driven sales. It discusses digital transformation, the necessity for businesses to adapt to changing customer behaviors, and offers a framework for executing a digital strategy. Moreover, it includes examples of companies adapting to digital challenges and provides insights into maximizing customer engagement through personalized experiences.
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It's Time for E-Commerce to Grow: Developing an E-commerce Strategy & Managing Transformations by Maha Rashad from Simon Kutcher & Partners
- 1. www.simon-kucher.com Developing an E-commerceStrategy & Managing Transformation It's Time for E-Commerce to Grow September 2019 Cairo office ICONIA Building 16 Mohamed Thakeb St. 11211 Zamalek, Cairo Egypt Tel. +20 100 4694209 [email protected]
- 2. Source: Simon-Kucher Developing anOmni-Chanel strategy.. Focus on selling, not technological sophistication Think Value not priceThink Customer not product Structured Value basedPersonalized Tailored Demand basedDynamic E-CommerceSummit2019.pptx 2
- 3. Source: Simon-Kucher Developing anOmni-Chanel strategy.. Focus on Selling, not Technological Sophistication Think Value not PriceThink Customer not Product Structured Value basedPersonalized Tailored Demand basedDynamic E-CommerceSummit2019.pptx 3
- 4. Source: Simon-Kucher &Partners Think Customer Own the customer relationship, from push to pull VS Customer Channels Product Product & service Channels Customer E-CommerceSummit2019.pptx 4
- 5. Follow the pattern Peopledo change the way they buy 2010's E-commerce driven Customer I need a vacuum cleaner Digital channels Home delivery 2000's Digital media driven Customer I need a vacuum cleaner Digital media Store 2020's Automation driven Home delivery Sensor Ehm, ok...Your house is a mess AI Direct online sales Data-driven sales Subscription ecommerce Access over ownership On demand E-CommerceSummit2019.pptx 5
- 6. Technology is enablingData- driven selling Are you taking advantage? "The question is, how do you get a deep understanding of your customers? There’s good news on that for sales professionals of today. Within five years, basically every salesperson will have an intelligent assistant that will use intimate computing to deliver rich context around every step of the sales process, from initial contact to closing." – Peter Schwartz SVP Strategic planning Sales Force E-CommerceSummit2019.pptx 6
- 7. Source: Simon-Kucher &Partners Know Your Customer Is the key to delivering the right proposition Old world: Traditional Record Name Phone Email Company Twitter Facebook New world: Subscriber Identity Record Purchases Payment history Products Refund history Local Pricing Lifetime Value Customer Moments Promotions Renewal Value Usage metrics Adjustments Aging balance Add-Ons E-CommerceSummit2019.pptx 7
- 8. Example: Chatbots –personalized offers based on user information Source: Lufthansa, Mastercard, Radisson, Simon-Kucher & Partners Other companies are.. Use Big Data and AI to make relevant offers Provides purchase history and makes contextual offers Example Find lowest-priced flight connections Serves as personal concierge during stay E-CommerceSummit2019.pptx 8
- 9. E/-DC = E-/DigitalCommerce, CSIM = Customer service and interaction management, CRM = Customer Relationship Management, SFA = Sales Force Automation, PO&M = Price Optimisation & Management, CPQ = Configure, Price, Quote, MA = Marketing Automation, SPM = Sales Performance Mgmt. There is a wide mix of applications that can support sales through software Vendor list not exhaustive CRM SPM MA Cloud for sales CPQ PO&M 3 6 7 8 5 SFA4 CSIM2 E-/DC1 SFA capabilities often included in CRM solutions E-CommerceSummit2019.pptx 9
- 10. Source: Simon-Kucher Developing anOmni-Chanel strategy.. Focus on Selling, not Technological Sophistication Think Value not priceThink Customer not Product Structured Value basedPersonalized Tailored Demand basedDynamic E-CommerceSummit2019.pptx 10
- 11. Digitalization is notan IT project ) Technology is just the enabler for … New revenue generating opportunities Technology + product + channel + customer relationship = success in the digital world E-CommerceSummit2019.pptx 11
- 12. Loyalty CRM Source: Simon-Kucher &Partners Rethink the customer journey, learn from B2C leaders 6 1. Awareness Product Web Price Referral SMO PPC 1 2 2. Consideration Product Web Price 3 3. Conversion Price Web Product 4 4. Upsell Price Promo CRM 5 5. Re-sell 6. Recognition & Personalization 7. Retention Retain offer CRM 7 Digital channels Customer 1 Journey (stages) Travel industry: Customer journey for a travel product has a wide range of digital channels E-CommerceSummit2019.pptx 12
- 13. Reinvent Business Model Source: Simon-Kucher &Partners Digitalization framework (full format) Build Digital Foundation Develop customer- centric digital approach Define Digital Vision Market & competitive assessment Digital capability assessment Goals alignment for digitalization Digital strategy formulation Business model transformation strategy Market disruption strategy Competitive response strategy Change Management Plan Digital quality management (DQM) Deliver Highest Value Digital Offerings Customer co-creation/customer journey mapping Data-driven Design to Value (D2V) Social sentiment analysis/gamification analysis Hyper-personalization/value-based segmentation Big Data, IoT and XaaS strategy Monetization model and pricing Value communication strategy Customize Go-to-Market Strategy Digital demand generation Omnichannel integration plan Sales enablement (incentives/digital apps/value selling) Digital sales dialogue optimization - A/B Test and learn strategy Digital CLV optimization Digital Cross-sell/Up-sell and promotions tools Digital CRM solutions/loyalty/referral/promo programs Enable Supporting Functions: Develop agile/cross-functional digital processes Privacy compliance tracking Revenue recognition and forecasting Digital governance procedures Digital performance measurement Build IT Infrastructure Digital data management architecture Digital data map and migration Tools/applications/software requirements and vendor selection Digital partner network/ecosystem development Ops, Finance & Legal E-CommerceSummit2019.pptx 13
- 14. Source: https://www.pcmag.com/article2/0,2817,2493418,00.asp,https://www.digitalturbine.com/blog/a-case-study-in-user-acquisition-walmart-app-vs-amazon-app/,https://digit.hbs.org/submission/and-the-next-big-thing-in-retail-is-wal-mart/ Walmart builtout a sophisticated in-store and online digital footprint to avoid disruption and compete with Amazon BUSINESS OVERVIEW Industry: Consumer Goods / Retail Company profile: Leading multinational retail corporation that operates >6,000 stores internationally with USD482.5bn in 2016 Launched WalmartLabs in 2011 as a spin-off division dedicated to developing transformative digital initiatives to help Walmart compete in the digital era Situation: Walmart was the dominant player in American retail for decades, but the firm faced existential threats from the emergence of e-commerce giants like Amazon Stayed competitive in the digital era by focusing heavily on e-commerce DIGITAL TRANSFORMATION Digital business model: Substantially upgraded its e-commerce capabilities to better match key competitors' online presences and by acquiring e-tailer Jet.com in 2016 In-store digitalization (e.g. "Saving's Catcher" app allows customers to compare prices of in-store products against competitors) Rapidly growing "Walmart Exchange" is a digital advertisement platform that uses both online and in-store data (which Amazon and Google cannot provide) Impact Online sales grew by 64% in Q2 2017 to USD15bn; on track for 35bn by 2018 iStock_hakule E-CommerceSummit2019.pptx 14
- 15. Source: Simon-Kucher Developing anOmni-Chanel strategy.. Focus on Selling, not Technological Sophistication Think Value not priceThink Customer not Product Structured Value basedPersonalized Tailored Demand basedDynamic E-CommerceSummit2019.pptx 15
- 16. Digitalization has afierce impact of how customers perceive your value More complex products and services to meet client’s demands New entrants with alternative offerings, unconventional business models, and lower prices Accelerated commoditization and substitution Greater market transparency and growing customer procurement capabilities Shift control of the buying process towards customers E-CommerceSummit2019.pptx 16
- 17. Source: Simon-Kucher &Partners Equip sales for their value selling role; relevant in both the analogue and digital world From To 1 Explore customer value drivers Inside-out, make presentations Outside-in, ask questions 2 Quantify your value proposition Product push, talk features Pull requirements, quantify impact 3 Price the value you deliver Cost-plus Value-minus 4 Offer pricing options & alternatives Sell what we can make, one-size-fits-all Offer what we can sell, options & anchors 5 Sell conditionally, tit-for-tat Discount if required Concession if required Project Example E-CommerceSummit2019.pptx 17
- 18. Source: Simon-Kucher &Partners analysis; Quantitative survey November 2011; n (DE) =308 Map your competitve advantage and deliver maximum value 1 2 3 4 5 6 7 8 9 10 11 12 13 1415 0 1 2 Importance of value drivers Relative importance Payment methods Shipping time Availability Usability Ease of return Ease of delivery Return time Reputation Rewards Broad assortment Deep assortment Recommendations Extra services Fun Channels 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Relative performance Amazon/Otto "We have everything and you know the process works" E-CommerceSummit2019.pptx 18
- 19. 0% 2% 4% 6% 8% 10% 12% 10 20 3040 50 60 70 80 90 100 110 120 130 140 150 Source: Simon-Kucher project database (anonymized) Best practice: Free shipping threshold Shopping cart distribution including VAT (excluding shopping carts >150€) Shopping cart level in € (Maximum per category) Share of shopping cart (in %) Free shipping threshold Simon-Kucher project example E-CommerceSummit2019.pptx 19
- 20. The problem withlimitless opportunities in a digital age…? Paralyzed by choice Run before we can walk We can work together To set clear direction based on focused investment E-CommerceSummit2019.pptx 20
- 21. * If Limited,key steps of the digital transformation process are missing (for example, local, mobile, XaaS / cloud) Source: Simon-Kucher & Partners Our portfolio of digital solutions anticipates 4 primary company scenarios Companies Evaluating Digitalization Companies Strategizing Digital Excellence $$ $ Companies Planning (Full) Digital Transformation Companies Facing Digital Attack Profile The company is considering taking the digital plunge, but is unsure of where to start & lacks alignment or clarity on digital strategy and plan Under assault by traditional competitors or digital disruptors, the company is losing market share to digital competitors and must act fast. The value of a digital solution is understood across the organization, with focus on executing a full digital transformation. The organization has identified a set of key digital objectives, although prioritization and ownership of the digital strategy may be blurred. Phase Pre-digital Pre or (limited*) digital stage Pre or (limited*) digital stage (Limited*) digital stage Goals Identify opportunities, evaluate the business case for digital, align the organization and identify the high level digital value proposition Create attack plan to counter digital disruptors and identify a clear roadmap to solidify market position Design, plan, and implement an effective top-line digitalization transformation strategy Develop digital strategy, business model design and commercialization plan for specific focus areas Our Digital Solutions Start with Digital Assessment Rapid Digital Assessment; Digital Attack Plan; Digital Assessment, Digital Strategy & Business Model Design, Staged Rollout, and KPI Measurement and Fine- tuned Rollout Digital Value Proposition, Commercialization Excellence; Omnichannel Strategy and Expansion Plan E-CommerceSummit2019.pptx 21
- 22. Source: Simon-Kucher &Partners We worked with all these clients and more.. Marketplaces US/DE/UK Real estate platforms DE/CH Car platforms CH US Job platforms Horizontals Others Consumer applications SMB solutions Enterprise & IT solutions Online Platform Business Software Business E-Commerce Business Online retailer Online + Offline retailer E-CommerceSummit2019.pptx 22
- 23. Global presence Common Slides.pptx 38offices worldwide, >1,300 employees, $360m revenue in 2018 Egypt, Cairo Africa Europe Brazil, São Paulo Canada, Toronto Chile, Santiago Mexico, Mexico City USA, Atlanta USA, Boston USA, Chicago USA, Mountain View USA, New York USA, San Francisco Americas Australia, Sydney China, Beijing China, Hong Kong China, Shanghai Japan, Tokyo Singapore, Singapore UAE, Dubai Asia-Pacific/ Middle East Austria, Vienna Belgium, Brussels Denmark, Copenhagen France, Paris Germany, Bonn Germany, Cologne Germany, Frankfurt Germany, Hamburg Germany, Munich Italy, Milan Luxembourg, Luxembourg Netherlands, Amsterdam Poland, Warsaw Spain, Barcelona Spain, Madrid Sweden, Stockholm Switzerland, Geneva Switzerland, Zurich Turkey, Istanbul United Kingdom, London 23
- 24. COLOURBOX/Syda-Productions Simon-Kucher in Egypt ManagementConsultancy iStock/ipopba Solutions Development We offer advice and implementation support to companies across industries and Government entities in our core competency: Strategy, Marketing, Pricing and Sales Our service Our commitment Our ambition We locally develop digital tools and software solutions, that support Simon- Kucher projects across the globe Serve Egypt as a core market Consultancy hub for African continent Service center for all 38 offices across the globe Serve clients in all industries We hire local Egyptian talent and train them in our global development program We hire local Egyptian talent and set a global standard for digital tools E-commerce Summit_Nudging Consumer Behavior_presentation 24
- 25. www.simon-kucher.com Cairo office ICONIA Building 16Mohamed Thakeb St. 11211 Zamalek, Cairo Egypt Tel. +20 100 4694209 For further questions, please do not hesitate to contact our local management Thank you! www.simon-kucher.com Martin Janzen Co-Managing Director Tel: +20 100 050 2588 Tel: +49 173 53 81 981 [email protected] www.simon-kucher.com Sara Shenouda Co-Managing Director Tel: +20 100 170 1418 Tel: +49 176 198 43433 [email protected] www.simon-kucher.com Maha Rashad Business consultancy Manager Tel: +20 106717858 [email protected] www.simon-kucher.com