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Ecommerce and Brick and Mortar Retail in Canada

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Publicada em

- E-com and B&M retail KPIs (Canada & US 2014-2018 est.)
- Extra stats on apparel retail
- Channel preferences and showrooming
- Cross-border shopping trends and consumer sentiment
- Top e-commerce pitfalls and mitigation

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Ecommerce and Brick and Mortar Retail in Canada

  1. 1. The Impact of Ecommerce on Brick and Mortar Retail (Plus Top Ecommerce Pitfalls to Avoid) Fabiana Pereira EVP, Brainpulse Consulting Brainpulse © 2016-2017, All Rights Reserved
  2. 2. Ecommerce Today
  3. 3. 36M Canadians In 2015... Source: Forbes 26M E-Shoppers 21M E-Buyers 80% 69% 58%
  4. 4. Ecommerce Shopping Up Canada 2014 2015 2016 2017 (est) 2018 (est) Shoppers 20.2M 20.9M 21.5M 22.2M 22.5M % Users 79% 80% 81% 82% 83.2% % Growth 3.2% 3.2% 3.2% 3.2% 1.5% Buyers 16.9M 18M 18.6M 19.2M 19.5M % Users 66.2% 68.9% 70.1% 71% 72% % Growth 7.3% 6.1% 3.7% 3.2% 1.4% Source: Emarketer- excludes travel and event tickets
  5. 5. Ecommerce Sales Up Canada 2014 2015 2016 2017 (est) 2018 (est) Sales 25B 30B 34B 39B 44B % Retail 5.2% 5.9% 6.6% 7.4% 8.2% % Growth 17.4% 16.8% 14.9% 13.8% 13.5% Source: Emarketer - excludes travel and event tickets Apparel and accessories represent roughly 17% of all sales Double-digit sales increases are expected until 2019 Meanwhile, total retail sales in the country will continue to grow at only ~2% annually throughout the forecast period…
  6. 6. Category Penetration Source: CIRA 2016 Factbook
  7. 7. Channel Preferences Clothing, Shoes & Accessories Home Goods Food Brick & Mortar 67% 69% 95% Online 29% 29% 3% Other 4% 2% 2% Source: Emarketer
  8. 8. Channel by Gender All Ecom Most Ecom Same Most B&M All B&M FEMALE Footwear 4% 12% 16% 24% 45% Apparel 4% 17% 16% 35% 28% MALE Footwear 3% 19% 19% 29% 36% Apparel 3% 23% 23% 34% 21% Source: Body Labs, 2016 Apparel & Footwear Retail Survey Report
  9. 9. Cross-Channel Interest Up Female Male 19-35 36-50 51-69 Buyers who would like to purchase online and pick up in store 2014 36% 45% 34% 42% 45% 2015 50% 58% 63% 57% 41% Source: King Retail Solutions Report
  10. 10. 50% Of Consumers Showroom The channels are often seen as competing against each other Winning retailers and customers’ treat them as complementary 65% Of Consumers Web-room However… Source: Forbes
  11. 11. The showroom and web-room features of each channel complement to strengthen brand, loyalty, and acquisition strategies… “The big benefit of the flagship stores: they’re terrific marketing vehicles”
  12. 12. Brand vs. Retailers Apparel Electronics Overall Brand 57% 56% 37% Retailers 43% 44% 63% Source: Brandshop 2015 Report Overall, 78% of US digital buyers surveyed said they shopped at Amazon. For 58% of buyers, Google was the top digital source for researching products, followed by brand websites (23%) and digital retailer sites (15%).
  13. 13. The rapid expansion of the online channel added extra competitiveness to retail while empowering consumers with extra choice and increasingly high standards regarding product selection, price, and shopping experience Leading retailers understand the complementing role of each channel and invest accordingly, creating integrated brand and commerce environments In Sum
  14. 14. US Impact on Canadian Ecommerce
  15. 15. In 2014, 51% of total digital spending in Canada remained in Canada. The US accounted for 34%, Asia-Pacific 10%, and Europe 3% Canadians’ Geo Preferences Source: CIRA 2016 Factbook
  16. 16. Financial reasons may play a larger role than reported Canadians’ Geo Preferences Source: CIRA 2016 Factbook
  17. 17. Canada has a very aggressive policy of protection against cross-border online shopping Canada’s current de minimis level is $20, meaning that all purchases above this threshold pay an additional up to 30% in duties and fees Significantly lower than NAFTA peers, US ($800) and Mexico ($300) It costs the federal government close to $170M to collect $40M in duties and taxes for shipments valued between $20 and $80 Duty Protection
  18. 18. ~9K signatures to date 12 US Senators involved in discussion
  19. 19. Canada is being pressured by the US Government, Canadian consumers, and the poor economics of this policy, to rise this threshold - the 2017 budget could reflect these changes Regardless, US retailers still enter the Canadian market with their brick and mortar and online stores at once (Saks, Nordstrom, etc) Trade barriers will not prevent laggards from suffering competition, both national and international In Sum
  20. 20. Ecommerce Pitfalls
  21. 21. In 2016, still over 40% of Canadian small businesses do not have a website Canadian Retailers Lagging Source: CIRA 2016 Factbook
  22. 22. Ecommerce Benchmark Q2 2016 CA AVG Order Value $134 Conversion Rate 1.45% Cost per Click $1.5 Cost per Acquisition $103 New Visitors 51% Transactions/mo 386 Source: Magento Canadian Benchmark
  23. 23. 1 - Lack of Differentiation from Competition 2 - Disproportionately Small Investment vs Brick and Mortar 3 - Non-converting Website (poor speed, design, content, navigation, security…) 4 - Poor Online Marketing Strategy and Environment 5 - Poor Inventory Management Top Reasons for Failure
  24. 24. Many e-commerce businesses did not launch, or launched with the false assumption that it would be cheaper to operate than B&M The cost per acquisition slightly below the average order value, repeat purchases are key for success Cost reduction as a main driver does not create ecommerce success stories, excellent customer experiences do Consumers require great UX and high offer pertinence so they keep engaged, end up buying , and come back for more Overview
  25. 25. Minimizing Retail Risk In the Digital World
  26. 26. Failure Risks & Mitigation RISK MITIGATION Lack of Differentiation Go-to-market Strategy Small Investment ROI Planning Non-Converting Website Analytics & CRO Processes Poor Online Marketing Strategy, Environment, Services Poor Inventory Management Business Intelligence
  27. 27. Increase Conversion Rates Leverage Behavior-Driven Custom Campaigns Automate Customer Segmentation and Profiling (new and existing) Enable Consistent Cross Channel Experiences Deliver Dramatic Sales Growth Generate Insights & Personalization at the Individual Customer level Communicate With Pertinence on a 1 to 1 Basis Business Requirements
  28. 28. Extra Insights on Product Line Expansions Monetize the CRM Database Reach a Mobile Audience Obtain Strategic Online Marketing Support Fully Integrate Store and Online Experiences Optimize Cross-Sell and Site Navigation Ensure Easy and Thorough Web Analytics Tagging Business Requirements(cont’d)
  29. 29. CONVERSION RATE AVERAGE ORDER VALUE TRAFFIC Tactical KPIs
  30. 30. DISCOVERY ROADMAPPING EXECUTION Strategic Governance Goals Current KPIs Environment Capabilities Benchmarks Go-to-market Strategy Technology Processes Services Capacitation Acquisition / DB Growth Personalization Automation Conversion Optimization Lifecycle Management
  31. 31. Minimizing risks in retail credit, including for sports apparel, involves understanding the level of ecommerce-readiness of each player Retailers who do not venture online, or do so with poor planning and governance, have increased risks of failure and obliteration Retailers’ level of differentiation from competition, appropriateness of investment and cash flow, quality of online presence and digital marketing governance is directly correlated to their overall credit risk In Sum
  32. 32. Thanks! Reach out today to fabiana@brainpulse.ca Let’s talk about your digital marketing and grow your online revenue!

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