New technologies, disruptions and business models for online retail, that can change market dynamics. Examples of new digital business models for retail.

1. PwC’s Digital Services
S1e2
„The NewCommerce” - nowa fala e-commerce?
>20 modeli biznesowych, które mają szansę zmienić układ sił
Michał Kreczmar, Director, Digital Transformation, PwC

2. I would say that,
systematically, I’m skeptical of
all trends. Every trend you
could name, I think it’s
overrated. You should be
thinking ‘fraud.’ You should be
running away from it.
Peter Thiel

4. Past
• Traditional BM
• Flash & Private sales
• Subscription
• Deals & Group buying

5. Present
• New marketplaces
• Sharing>Collaborative>Rental
• Mobile First>Only
• Predictive retailing
• On Demand
• Crowdsourcing & Crowdfounding
• Customization
• Makers, 3D Print, Materialization
• Digital Assets & IP
• Hollywood meet e-commerce
• MultiLevel Marketing
• Consumer Merchandised Shops
• Media & Commerce
• Curation & Personalization
• Social curation & lookbooks
• Ecosystems: CCCC
• D2C, vertically integrated
• Online 2 Offline (& reversed)
• Packaging
• Unique assets
• Data > advertising
• Auctions
• Distributed commerce
• Mission

6. Future
all mixed up

7. PwC’s Digital Services
Business/Revenue model + Technology = Something New
7
https://www.slideshare.net/krecz/jak-zarabiac-w-digitalu-czyli-xxx-modeli-biznesowych-generujacych-przychody

8. PwC’s Digital Services
Smart money goes to… „technology enabled”

9. PwC’s Digital Services
Order online, but how?
Domino’s pizza order:
• tweeting pizza emoji
• texting emoji
• smart TV
• Ford Sync
• smartwatches
• apps
• voice - Amazon Alexa, Google
Home
• 0 click app
• FB Messanger

10. PwC’s Digital Services
Interfaces: AR, voice, gestures, computer vision…

11. PwC’s Digital Services
Sensors: Smart, connected devices, IoT

12. PwC’s Digital Services
Digital platforms: cloud, XaaS, SDK, developer ecosystems

13. PwC’s Digital Services
Algorithms: Data Science, Artificial Intelligence, Conversational Commerce,
Natural Language/Image processing

14. PwC’s Digital Services
Automation: autonomous commerce, replenisment economy

15. PwC’s Digital Services 15
Digital Transformation (DX): Connected vessels
Competition
TechnologyConsumers/Clients
Customer
Experience
Customer
Insigths
Customer Journey
Organization
Structure
Strategy
Data
Processes
IT
Business
Model
Infrastructure
Leadership
Organization
culture
Capabilities
Vision
Role
Regulations
Compliance
Ways of working
KPI
Pricing &
promotion
Advertising
& Marketing
Production
Packaging
Sale
Product
information
Inventory
planning
Demand &
supply
modeling
Distribution
Logistics

16. PwC
What to look for

17. PwC’s Digital Services
ASOS (4$B MktCap), Boohoo (3$B
MktCap), adidas, NYX (acquired
by L’Oreal), e.l.f. (1B MktCap),
Face Shop…
• Time to market: design,
production, sales, fullfilment,
distribution, logistics…
• Offshoring > nearshoring
• „Move fast with stable
infrastructure”
Fashion, Beauty… on steroids

18. PwC’s Digital Services
The RealReal (172M$ TEF),
Vestaire Collective (130M$ TEF),
Poshmark (65M$ TEF), momox,
rebuy, musicMagpie, ThredUp
(131M$ TEF), Tradesy (75M$
TEF)…
• Buy sell, trade used products,
electronics, fashion, luxury…
• Matchmaking marketplace or
platforms buy used goods, assess
their quality and sell the product
through their own sites or third party
marketplaces
• Mobile phone scan the barcode
number of the book, CD, DVD and
game, or describe the fashion item for
sale, and receive an immediate
purchase offer as well as payment
once the items are accepted
Re-commerce

19. PwC’s Digital Services
Digitally Native Vertical Brands, V-brands
Bonobos (127M$ TEF), Allbirds
(27M$ TEF), Away (31M$ TEF),
Outdoor Voices (30M$ TEF),
Parachute, Eloquii (21M$ TEF),
Morphe, Rothy’s, Saxx (50M$
TEF)…
• Bonobos founders become fixated
on making a pair of the best-
fitting pants possible, product
was the end result of endless hours
of fascination and minute detail,
enough to hang a brand on.
• Allbirds - brand as a product.
Make one perfect thing, and then
let your work speak for you.
• Start from kickstarter, real
sportsmen CEO, multiple product
changes based on customer
input
• 0 carbon footprints, even packaging,
surprise & delight unboxing

20. PwC’s Digital Services
Radical Transparency & Pricing
Everlane (1M$ TEF)
• Direct-to-consumer brand that sells clothing made in
factories with humanitarian conditions at
wholesale price
• The lowest price covered the cost of making and
shipping the items, middle covered the overhead of
selling, highest provided a profit.
Beauty Pie
• For a $10 monthly membership fee (the way Beauty Pie
takes a profit) and the price of shipping, you can buy
the products at factory cost produced in the same
top labs in Switzerland, Korea, UK, and Italy that
manufacture best-in-category products for designer and
high-end brands.
Maison Standards
• Timeless basics with a policy of transparency
surrounding their fabrication and offering prices
between 30 and 40% lower than its affordable luxury
peers by returning its retail margin to
customers.
• Basic level covers cost of the item and its
transport, a second price integrates development
costs and salaries, while the third allows the brand
to finance new developments.
Hollar (47M$ TEF)
• Reinventing the dollar store for online and mobile shopping, proving you can still buy cheap, high-quality goods online.

21. PwC’s Digital Services
Super Safe
Beautycounter (21M$ TEF)
• Develops and sells highly effective cosmetics that are safe for consumers
• Products formulated with high safety standards excluding more than 1,500 harmful
ingredients linked to cancer, hormone disruption, reproductive toxicity, skin irritation,
cumulative exposure risk and other hazards.
Madison Reed (45M$ TEF)
• At-home hair color experience a more luxurious, fearless, happy process. The direct-to-
consumer line a nutrient-rich hair color formula crafted without ammonia, parabens,
resorcinol, PPD, phthalates, and gluten
• The entire line of color products is enriched with argan oil, keratin, and ginseng root

22. PwC’s Digital Services
Product 2 Service
Philips pay-per-lux, Rolls-Royce
Power-by-the-Hour, Xerox pay-
per-copy, Zipcar, Cadillac…
• Sales of boundles of services &
products rather than products
alone
• Access over ownership, less
expensive access to products
• New revenue streams & revenue
generation model – recurring
payments - make money over
time, on usage, outcome…

23. PwC’s Digital Services
Leasing, Renting, Installment…
Apple Upgrade Program
• Fast and low cost consumer onboarding for new products
• Easy upgrade from old to new products
• Consumer binding

24. PwC’s Digital Services
Mobile only gets the scale
Wish (1B$ TEF), OfferUp (221M$
TEF), LetGo (375M$ TEF)…
• From mobile China products offer
aggregator to direct to consumer,
• New and second hand, global &
local
• Mastering multiple push 2 sell
strategies
• Heavy advertising spend on app
install & reengagement

25. PwC’s Digital Services
YouTube stars meets Subs
ipsy (103M$ TEF)
• Sample 5 beauty
products tailored to you in a
collectible bag, watch product
tutorials from stylists, save up
to 70% through members only
offers
• YouTube creator Michelle
Phan - 8 million subscribers, 1.1
billion lifetime views
• Ships to over 3 mln subscribers
every month; reaches over 20
million people every month

26. PwC’s Digital Services
Influencers meets e-commerce & mobile
Kim Kardashian digital empire
• Shoedazzle - online shoes shop,
style quizz, stylists,
subscription/membership, shop by
item
• Kim website & app - Subscribe for
access to exclusive daily content:
videos, behind-the-scenes pics, live
stream, personal journals for just
$2.99/month
• Kimoji paid app - one of the top 5
most bought apps that week, Kim
Hollywood app - since launching
it’s been downloaded more than 42
million times, netted more than $100
million.

27. PwC’s Digital Services
Brand, with no Brand
Brandless (50M$ TEF)
• Narrowed product line down to a
couple hundred essential items
• Source just the essentials from
partners. Offer just one versions of
the same product, but its selection
also doesn’t seem incomplete.
• Packaging, which seeks to
highlight the important details of
each product. That means pointing
out what’s non-GMO, organic, fair
trade, or kosher, as well as
which things are gluten-free or
have no added sugar.
• In the process cutting all
the distributor costs, breakage
costs, sales trade costs and other
fees associated with retail
distribution, which is the main way
it’s able to offer products so cheaply.

28. PwC’s Digital Services
Multiple global niches
Becca (Acquired by Estee Lauder))
• 55% of Becca’s customers identify as nonwhite
Stature
• An online boutique run by small women for small
women
• Work with individual designers to create custom sizes
on key pieces
Dia & Co (20M$ TEF)
• Plus-sized clothing and accessories retailer delivering
its service via a try-on-at-home model.
Memebox (156M$ TEF)
• Exclusively features Korean beauty
products
• Started out as a beauty box service,
expanded to online store and brick-
and-mortar presence
Bevel
• Men's shaving kit aimed to eliminate
irritation and razor bumps aim to change
the way the black male community
approaches shaving

29. PwC’s Digital Services
Packaging: Small <> Huge
Stowaway Cosmetics (1,5M$ TEF)
• Direct to consumer cosmetics brand
• „Right sized" cosmetics in sizes you can carry and actually finish.
• Products are half the size and half the cost
Boxed (132M$ TEF)
• Favorite big box sized products at pint-sized prices.
• Save on time, gas and membership fees while shopping for items you use every day - all shipped to
your door

30. PwC’s Digital Services
Unboxing
Unboxed (7,5M$ TEF)
• Watch popular unboxing videos on
the coolest tech product
• Ask questions and share product
experiences with other enthusiasts
• Buy new favorites seamlessly in app
with Apple Pay

31. Mashups =
MIX & MATCH

32. PwC’s Digital Services
D2C, vertically integrated, crowdsourced, superfast
Julep (55 mln$ TEF)
• Full-stack beauty brand, controlling
every aspect of product
development – from concept and
testing, to rapid manufacturing
and distribution - 300 new
products a year, 10X faster
than traditional beauty brands
• Leverages crowdsourced
feedback gathered via social
channels such as Facebook,
Twitter, Instagram, Pinterest
• Launching products first via its
Mavens online subscription
community, and then expanding
distribution to Julep.com,
Sephora, QVC, and Nordstrom.

33. PwC’s Digital Services
D2C, customization at scale & algorythms
Function of Beauty (10M$ TEF)
• 12 billion different
combinations of ingredients
• Start by quiz about your hair
type, structure and scalp moisture.
Select 5 "hair goals" like volumize,
deep condition, or lengthen. Pick
which color and scent you'd like
the shampoo and conditioner to be,
along with the fragrance
strength.
• Building your Hair Profile,
which the company saves so you can
easily reorder more products.

34. PwC’s Digital Services
Curated by man & machine, subs + computer generated private label
StitchFix (54M$ TEF)
• Personal styling platform that
delivers curated apparel and
accessory items
• Blend expert personal styling
based on Stitch Fix Style Profile
with proprietary AI technology
• "Fix" of 5 items unique to your
taste, budget and lifestyle. Buy
what you like and return the rest
• Fashion Graph?

35. PwC’s Digital Services
„Size matters not. Look at me. Judge me by my size, do you?”
Amazon (450B$ MktCap): Go,
Prime, Marketplace, Essentials,
Pantry, Basics, Elements, Fresh,
Flex, Fullfilment, Sub&Save, Adv,
Dash, Handmade, Lab, Music,
Studios, Sommelier, Pay, AWS,
Video, @Work…
• >460 brands & trademarks
• Products, technologies, content, IP,
private label brands, hardware,
solutions…
• IMDB, Zappos, CDnow, Audible,
Woot, Kiva, IVONA, Diapers,
Goodreads, Soap, Alexa, Pets,
Souq, Twitch, Whole Foods…

36. PwC’s Digital Services
New Retail, O2O, New/old shop?
Alibaba (427B$ MktCap) from
HEMA grocert to full shopping
mall…
• Grocery store, 10 locations in
Shanghai and Beijing.
• Curated selection of 3,000
products from 100 countries
• Order on mobile app and get
delivery within 30 minutes,
within a 5-kilometer radius
• Digital price tags updated in
real time, shoppers scan bar
codes, pay via app and have
purchases delivered for free
• Customers can also go to the store
to select fresh produce, have it
cooked and eat there

37. “56% or US executives felt
the single greatest obstacle
to growth it’s the corporate
culture”.
Economist Intelligence Unit

38. PwC’s Digital Services
Podsumowując
Nowe katalizatory: Pominąłem
Produkcja np. autonomiczne roboty
Finansowanie np. ICO
Dystrybucja np. automatyzacja
Płatności np. frictionless
Promocja=sprzedaż medium=message
Media/interfejsy np. voice, video, AR, gesty
Technologia, cloud, IoT np. AI wszędzie
Narzędzia np. platformy > dane > produkty
Turystyka, Bilety, Automoto
Bankowość, Finanse, Płatności
Nieruchomości
Ogłoszenia
Fullfilment, Logistics, backend
….
Rethink New Economy: service/outcome/on-demand/gig,
subscription, collaborative/sharing/renting, experience,
assetless/access, reputation/trust, free… again
B2B
Comparison engines

39. PwC’s Digital Services
Thank you
http://pl.linkedin.com/in/michalkreczmar
https://www.facebook.com/krecz
http://www.slideshare.net/krecz
Michał Kreczmar
Dyrektor,
Cyfrowa Transformacja, PwC
michal.kreczmar@pl.pwc.com
Questions, comments, suggestions?