ses hong kong - ecommerce essentials for asia
DESCRIPTION
eCommerce Overview for AsiaTRANSCRIPT
SES Hong Kong 2013Marcelo Wesseler -SVP, Singpost eCommerce
@mwesselerwww.specommerce.com
eCommerce at the heart of your business
Agenda
2
• SingPost Overview
• eCommerce basics
• Key Success Factors
• Marketing Budgets, CLV & Attribution
• Logistics
• Reporting & Analytics
• Traffic Generation
• Onsite Optimization
• Q&A
$2.2 billion market cap.
A+ Credit Rating*
12Logistics
Centers
3Call
Centers
220+ countriesvia Mail Delivery & Courier
Driving
eCommerce
In Asia
HQ
*Rating report by Standard & Poor
3
200+ eCommerce
Clients
Delivery &
Returns
Digital
Marketing
Warehousing
Solutions
Regional
Customer
Care Platform
eCommerce
Technology
eCommerce
Technology
eCommerce
Technology
Managed
End-to-End
eCommerce
Solution
Warehousing
Solutions
Delivery &
Returns
4
5
Some of Our Clients
6
Essential Trends
7
The Basics – Part I
• Range
• Price
• Reliable & Fast Delivery
• Convenience
The Basics – Part II
• Keep it simple but measure daily
• Be Aware of Inventory Risks
• Revenue = Visitors * Conversion * AOV
• Success =
- EBIT or Net Margin or- GM after logistics & marketing spend
9
eCommerce Success Factors
Customer
Experience
Operational
Excellence People
Happy Customers &
a Successful
eCommerce Business
Customer Lifetime Value (CLV)
• Golden Rule => your BUDGET
• Acquire customers until marginal contribution is zero (marginal CLV – marginal CAC)
• Guideposts
• If data is not yet available, then spend up to the average, fully loaded gross profit of a customer’s first order. Alternatively…
• Avg Monthly Revenue per Customer × Gross Margin per Customer
• Monthly Churn Rate
• Also, average order value (AOV) is a leading indicator of CLV
• Rules of Thumb
• At scale:
• If your CLV is at least two times the cost of acquiring a new customer, with at least 1X coming in the first 12 months after acquisition, you’re in great shape.
• If you’re doing any better than that, it’s irresponsible for you not to be spending more aggressively on marketing.
• If your CLV/CAC ratio is less than two, then it’s worth reigning in your marketing spend until you grow into it.
11
��� ����� � � �����1 �������
�
��1� ��� Net present value of
profits from a customer aka
Customer Lifetime Contribution (CLTC) or
Lifetime Value (LTV)
=
CLV Drivers
12
Sources: Custora report derived from 72 million customers from 86 US retailers across 14 industries, June 2013RJ Metrics Summer 2012 E-commerce Benchmark
CLV is slightly higher for customers originating from FB than Google
US$148 US$159
CLV Management Tip: Rubbish In, Bankruptcy Out
CLV can be used to rationalize
upfront marketing investment…
BUT…
beware tomorrow never arrives
1
3
Plan with the possibility that tomorrow is today.
Payback Period < 12 months & NEVER rely on last click attribution only
Regional
Distribution
Center ModelStore & Ship from our
eCommerce Logistics Hub
based in Hong Kong and
Singapore
Manufacturer
SP eCommerce
Logistics Hub
Customer’s Home
Air Freight
Drop Ship
Manufacturer
SP eCommerce
Logistics Hub
Customer’s Home
Air Freight
Drop Ship
Warehouse 14
Local
Distribution
Centers15
Consumers have to
be able to return
items to the satellite
hub in country
“consider returns rates
and cost in your business
case”
16
Tax
Optimisation
Malaysia
Indonesia
Japan
South Korea
Vietnam
India
Thailand
Philippines
Hong Kong
Taiwan
China
Singapore
Country Import duty Sales tax Additional tax
Thailand 30% 7%
Vietnam 20% 10%
China 16% 17%
Indonesia 15% 10%
2.5% (registered) or 7.5%
(unregistered) importers
Philippines 15% 12%
South Korea 13% 10%
Taiwan 11% 5% Trade promotion fee (0.04% CIF)
India 10% 0%
-Landing charges (1% CIF)
-Countervailing duty (12% (CIFD
+ Landing charges)
-Additional countervailing duty
(4% (Duty + Landing charges +
countervailing duty)
Japan 9% 5%
Hong Kong 0% 0%
Singapore 0% 7%
Malaysia 0% 10%
Your supply chain
logic will impact the
duties and taxes
payable across the
region.
*Duties and taxes are based on Levi’s 501 Jeans for men
* * *
High duties & taxes
Moderate duties & taxes
Low duties & taxes
17
Daily KPI Reports
18
Daily SEO Reports not just PPC
Traffic Generation Methodology
19
Marketing Description
PPC• Optimisation based on relevant and
popular keywords to first drive awareness
and then conversion
Phase
SEO• Site structure for higher rankings
• Microdata & product rich snippets
• Breadcrumbs best practices
Display• Retargeting banners
• Recapture funnel bounces
• Ad performance optimisation
Facebook• Facebook ads
• Retargeting in Facebook
Email/CRM• Abandoned cart recovery
• Rewards and loyalty campaigns
• Sales conversion channel
Offline• Direct mail
• Catalog mail
• Partnerships
Key KPIs
• Cost per click
• Click-through rate
• Conversion rate
• Keyword success
• Average search ranking
• % of revenue generated
• Click-through rates
• Assisted conversions
• Conversion rate
• Number of impressions
• Click-through rate
• Conversion rate
• Open rate
• Click-through rate
• Conversion rate
• Assisted conversions
• Brand awareness
• Lead generation
• Lead generation
• Lead generation
• Conversion
• Brand awareness
• Lead generation
• Conversion
• Retention
• Brand awareness
• Lead generation
Affiliates• Active affiliates
• Conversion rate
• Earnings per click
• Affiliate network recruitment
• Engage and educate affiliates
• Affiliation incentivisation
• Lead generation
• Conversion
Partnerships & Press
20
21
The adidas Online Store
was featured in Elle
Magazine’s August 2013
edition
Funnel Analysis
22
Conversion Optimization
23
Summary
• Range, Price, Reliable & Fast Delivery,
Convenience
• CLV is determining your budgets
• Don’t use last click attribution
• Enjoy analytics for breakfast
• Keep it simple & focus on basics
• Scalable delivery network
Inbound to Hong Kong
eFulfillment in China – Direct Injection to ChinaOperative Flow
26
Inbound clearance and
consolidation in HK
Local sorting in
warehouseDelivery to end
customer in China
Pre-clearance by on-site
customs
X-ray scanningRelease of goods
LOGISTICSLOGISTICS WMS (HighJump)WMS (HighJump)
Supplizer
Order processingOrder processing Vendor managementVendor management Returns processingReturns processing
INFRASTRUCTUREINFRASTRUCTURE
Big Data
Scalable
Highly Available
Secure
Open API
Partner Ecosystem
CALL CENTER
EMAIL MARKETING
ANALYTICS
BUSINESS INTELLIGENCE
SOCIAL
User/Role
Database
User/Role
Database
1:1
Marketing
/ Promos
1:1
Marketing
/ Promos
Products /
Categorie
s
Products /
Categorie
s
Shopping
Cart
Shopping
Cart
CheckoutCheckout Shared
catalog
Shared
catalog
Payment
web
service
Payment
web
service
PricingPricing Fraud web
service
Fraud web
service
Tax web
service
Tax web
service
Storefront
manager
Storefront
manager
Content
manager
Content
manager
WEB STOREFRONT
Tracking Shipments Orders Returns
Orders Inventory
Orders Customers
SP eCommerce Technology Architecture
27
Overview of marketing channels available. Size of circles represent
average ROI for eCommerce businesses.
SP Conversion Funnel
28
The 7 “C’s”
CLV Management Traps
29
#2:
CLV
ARPU
Costs
CACWACC
Churn
Marketing department both spends and
monitors (Finance should monitor)
Purchased customers underperform organic on
almost every metric.
The variables are interdependent, not independent.
• Raising price will increase churn
• Increasing marketing spend will increase CAC and churn
• Beefing up customer service to decrease churn will increase future costs.
It’s a metric, not a strategy.
You can’t win a fight with
measuring tape
The 7 “C’s”
CLV obsession creates blinders…instead, BE CREATIVE
CLV obsession creates blinders
that restrict creativeness &
open-mindedness
Scrappy, capital
starved start-ups with
no marketing budget
are more likely to find
ways to scale growth
organically
e.g. a PPT slide from
Skype in its early
days…
30
#2: