10 steps to building a successful eCommerce strategy

The 10 steps to building a
successful eCommerce strategy
Turin, 18 April, 2013

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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
6Copyright © 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
Functionaldepth
In-house
Level of outsourcing
LSP
e-provider
Functionaldepth
In-house
LSP
Functionaldepth
In-house
3PL
e-providere-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
Reactivation
> 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
Salesvolume
«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
Sources
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
Capabilities
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
EconomicimportanceperRetailer
+
+
-
-
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: federico.gasparotto@accenture.com
Phone: +39-331-7550490
Blog: www.gasparotto.biz

10 steps to building a successful eCommerce strategy

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10 steps to building a successful eCommerce strategy