1. Transformation required: eCommerce to
become the commerce
Mark Yates
13 March 2014

2. Agenda
 Irresistible force: internet, smartphones, expectations?
 New competition: price aggregation and showrooming
 Paradigm shift: same-store to same-shopper sales
 Customer shopping cycle: going omni
 Delivery and success: UK all the way
 Final thoughts on getting there first
3

3. IDC: Getting Data to Reveal IT’s Secrets
Turkey
UAE
Saudi Arabia
Kuwait
Qatar
Oman
Bahrain
Lebanon
Syria
Iran
Jordan
Israel
Rest of ME
Albania
Austria
Azerbaijan
Belarus
Belgium
Bosnia & Herz.
Bulgaria
Croatia
Cyprus
Czech Republic
Belgium
Denmark
Estonia
Finland
France
FYROM
Germany
Georgia
Greece
Hungary
Ireland
Italy
Kazakhstan
Egypt
Morocco
Algeria
Tunisia
Libya
Ghana
Kenya
Uganda
Nigeria
Namibia
Ivory Coast
Ethiopia
Tanzania
Botswana
South Africa
Rest of Africa
Middle East/AfricaEurope
 Offices in more than 30 Countries
 Research coverage of 75 countries
 130+ analysts making it happen
Kyrgyzstan
Latvia
Lithuania
Malta
Moldova
Montenegro
Netherlands
Norway
Poland
Portugal
Romania
Russia
Serbia
Slovakia
Slovenia
Spain
Sweden
Swizterland
Tajikistan
Turkmenistan
Ukraine
United Kingdom
Uzbekistan
Rest of Europe

4. Permanently changed ecosystem
 Ongoing trends
• Risks from economic cycles
• Profit pressure
• Social unrest in EMEA
 Transformative trends
• Changed competitive landscape
- intl retailers moving into PL
- PL retailers expanding and upgrading
• Localization strategies
• Social commerce
• Online and mobile commerce
For example ...

5. Poland solid but still bumpy
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2010 2011 2012 2013 2014 2015
Poland GDP growth (%)

6. Retail Performance Indicators
4
0
200
400
600
800
1000
1200
1400
2010 2011 2012
-35
-30
-25
-20
-15
-10
-5
0
2008 2009 2010 2011 2012 2013 2014
Consumer Confidence*
Retail turnover – current prices
Retail turnover – constant prices
Retail turnover
People are spending
With bad attitudes
*January stats
Source: GUS, 2014

7. Irresistible force: Internet
Global Internet penetration
2000 and 2013*
~5%
~39%
* 2013 is an estimate. Source: ITU, June 2013

8. 61
0 20 40 60 80
Romania
Bulgaria
Italy
Greece
Portugal
Cyprus
Poland
Croatia
Spain
Lithuania
Malta
Hungary
Latvia
Slovenia
Czech Republic
EU Average
0 20 40 60 80 100
Slovakia
Ireland
Estonia
Austria
France
Belgium
Germany
United Kingdom
Finland
Denmark
Luxembourg
Netherlands
Sweden
Norway
Iceland
% of people with Internet access at home, 2013
Source: Eurostat, Feb 2014
Irresistible force: Internet

9. 0 20 40 60 80 100
Belgium
Slovakia
Iceland
Ireland
EU28
Austria
Malta
France
Netherlands
Finland
Luxembourg
Germany
Denmark
Sweden
Norway
UK
0 10 20 30 40 50
Romania
Bulgaria
Estonia
Italy
Lithuania
Cyprus
Hungary
Portugal
Greece
Croatia
Latvia
Czech Republic
Spain
Poland
Source: Eurostat, Oct 2013
% of internet users that used internet in past year for purchasing, 2012
Irresistible force: Internet and shopping

10. 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Total % that shop onlineClothes and sporting goodsTravel and holiday accommodationBooks, magazines, elearningFood and Groceries
2008
2012
Source: Eurostat, Oct 2013
Poland: % of Internet users shopping online in past 12 months)
Quick bit of math
47% shop online
x 61% w/home access
29% total population
in 2012
Some surveys put this
much higher, at up to 55%
Irresistible force: Internet and shopping

11. Irresistible force: smartphones
0
500
1000
1500
2000
2500
3000
3500
2010 2011 2012 2013 2014 2015 2016 2017
WW smartphone installed base
1 in 6
1 in 3
Source: IDC, 2013
In Poland in 2012: ~1 in 4.2
In Poland in 2013: ~1 in 3.4

12. New competition: price visibility
• Immediately shows
prices at different stores
• Often used before
shopping at stores
• Increasingly used within
stores (showrooming)
• Higher margins often
not offset by opportunity
costs

13. Percent of shoppers that admit to showrooming (UK) 40%
Factor by which mobile coupons are redeemed 10
compared to traditional paper coupons (US)
Percent of smartphones owners that have 24%
taken pictures of products while shopping (EU)
Percent of shoppers smartphones owners that have 14%
sent pictures of products while shopping (EU)
Approximate number who make purchase in store >half
after researching a product online (NA)
Percent of showroomers older than 40 years 48%
New competition: showrooming
Dozens of studies paint the same picture: clicks and bricks overlap
Source: IDC, Google, Harris, Nielsen, Accenture, eConsultancy/Buy Desire, 2013 and 2014

14. 14
New competition: social media
Bulletin Board
system
<<70/80s 1990 2000 2010
Blogging
begins
No one can hide poor
products or services

15. The “New User”
Many users are aware that behind the scene (or screen) are massive
databases and algorithms – but they do not see it or feel it day to day
Screening
– Smart phones –
– POS terminals –
– Thin clients –
– Check-ins –
– Tablets –
– ATMs –
– PCs –
– TVs –
– etc –
Interacting
– with each other –
– with technology –
– with biz & govt –
– with brands –
new symbiosis
blurring lines
between self &
technology
Predicting
– commercial sites –
– parking spaces –
– meteorology –
– government –
– healthcare –
– telecoms –
– finance –
– retail –

16. Paradigm shift – love thy customer
Same
Store
Sales
Same
Shopper
Sales
Where do we appeal to the “same shopper”?

17. Facebook
In-store
kiosk
Review
sites
Coupon
sites
Click to
chat
In-site
reviews
Loyalty
schemes
Online
store
Main
social
Blogs
Online
deal sites
Algorithms
Twitter
Email
Twitter
Email
In-site
review
Review
site
Main
social
Blogs
Mobile
app
Online
store
Mobile
app
This is creating a new type of shopper.
Start Browse Research
Discount/
Reward
Transact
Follow-
up
Paradigm shift – love thy customer

18. The Omni-channel shopper
Start Browse Research
Discount/
Reward
Transact
Follow-
up

19. Receives client-specific promo when entering store
Expects preferred items to be in stock
Can research inventory while browsing
Checks reviews online while examining options
Scans barcodes to download coupon
Expects store employees to answer questions
Expects store to “remember them”
That’s a lot of work, why do it?
The Omni-channel shopper

20.  50-70% more spend than single-channel shoppers
(US, UK)
 45-60% choose retailers because they can buy
online and return in stores
(U.K, U.S., Australia, Brazil, France, Germany and Japan)
 Around 40% shopping time done online (US,UK)
 45% of shoppers will use any channel available
and 75% will return if given great service
(U.K, U.S., Australia, Brazil, France, Germany and Japan)
 20%-35% reduction of store systems TCO (when
implementing centralized store system architecture)
(Intl)
 Better data collection for analytics
 Optimized future product planning
Any examples?
The Omni-channel shopper
Source: IDC, Zendesk, eComerce.shopatron, AT Kearney, 2013 and 2014

21. Theme & variation – Korea 3 years ago!

22. Theme & variation – loyalty evolution

23. Theme & variation – making it easy

25. The keyword: integration
 Get online. If online, make it better
- optimize website for mobile devices
- introduce multiple payment options
- integrate online back-end with store systems
 Pilot basic multi-channel services
- loyalty program in-store and online (see below)
- click-and-pick-up (see below)
 Integrate POS and online view with inventory/SCM
- put store and warehouse inventory online
- ensure rapid delivery between the possible
- train staff to offer 5-star, multichannel service
 Rethink infrastructure management to optimize
usage and reduce costs (e.g. perhaps via cloud)
 Leverage and integrate mobility platforms and
access (for internal staff and customers)
Specific steps will depend on store size, location, number of
outlets, current infrastructure and software. But generally speaking…
And weave in the analytics

26. Shopping history Location (via IP)
Content relevance
The keyword: integration

27. Final thought – put customers first
Appoint a customer experience leadership team; make the effort to have
all staff be customer-focused rather than product focused.

28.  Mark Yates
 Lead Analyst
 IDC Insights
 myates@idc.com
 +420 221 423 208
Thank you
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