for online retail dec 6 th 2012 sports & outdoor online retailer
TRANSCRIPT
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For ONLINE RETAIL DEC 6th 2012
SPORTS & OUTDOORONLINE RETAILER
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ABOUT HEVEREST. RU HEVEREST.RU IS UNIQUE INVESTMENT OPPORTUNITY IN HIGHLY ATTRACTIVE RUSSIAN E-COMMERCE
2
HEVEREST.RU IS ONE OF THE LEADING E-COMMERCE PLAYERS IN THE SPORTS GOODS INDUSTRY
• Launched during summer 2011• Is an Online store and community of experts and fans, who like, support outdoor activities and sports
lifestyle; • Already generates ~ 1 M EUR IN monthly in gross demand• Already hosts ~ 2 mln. visits per month on Heverest.ru website; • We carry more than 300 brands and ~ 9,000 SKUs on our website, most of which is in our inventory
Our big goal is to buildA #1 e-commerce company in online Sports & Outdoor market in Russia and the CIS
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Managing Peaks & Lows in the SPORTS GOODS / APPAREL / FOOTWEAR
business
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This is what retailers would like their cash flow & inventory movement to look like…..
Stable Growth &
Predictable
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But in most cases it looks more like this …………..
BIGGER & UNPREDICTIBLE peaks & low points
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Global & Local Retail trends …………
Most profitable (full price) and bigger share of sales are coming relatively from a very few weeks within the 52 weeks a year
- The few big days of retail during a single year keep getting bigger every year
- Black Friday in USA (and another 10 important days) account for a much larger share of the total annual U.S. retail pie than ever before
- In Russia collectively the similar 10-15 days a year like MARCH 8, BACK TO SCHOOL, January 6th , the week of SNOW FALL, Easter, last 4 days of year end, etc… are generating more revenue within the annual calendar
- Accordingly the low points (slow selling period) keeps getting longer in days or weeks in between this variable peaks
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The challenges for any retail business
MAXIMIZE THE PEAKS !!- On-time stock up of inventory? – PRODUCT !- Attacking the consumer from various media channels ? – PROMOTION !!- Ensuring initial price is correct (full margin revenue) ? – PRICE !!!- Adequate Manpower at the last mile (delivery / sales floor)? – PLACE !!!!
MINIMIZE THE LOWS !!- 52 weeks assortment offers (not just 4 seasons) ? – PRODUCT !- Keeping the consumer interested each day / week / month to visit? – PROMOTION !!- Right level of discounts and promotion to keep stock moving? PRICE !!!- Keeping expenses under control at the last mile (fulfillment / shop floor) ? – PLACE !!!!
Seems to boil down to EXECUTING the 4Ps of MarketingPRODUCT – PRICE – PROMOTION – PLACE
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Key Success Factors…in a super competitive world ………..
PRODUCT – FULL STOCK UP BEFORE SEASONTHE ONE WHO CAN STOCK UP MORE & EARIER HAS A BIGGER CHANCE TO WIN!
PRICES – BEING STRRETCHED UP & DOWNALL SUCCESSFUL BRANDS HAVE FAR BIGGER RANGE OF ENTRY PRICED INSPIRATIONAL PRODUCTS AT THE BOTTOM & SUPER EXPENSIVE EXCLUIVE PRODUCTS AT THE TOP
PROMOTION – ALL DIMENSIONS COVEREDMARKETING HYPE AND ANTICIPATION LIKE NEVER BEFORE
PLACE - CUSTOMER EXPEREINCE LIKE NEVER BEFOREVisual merchandising - customer service - navigationUSER EXPERIENCE IS NOT EXCLUSIVE TO ONLINE, OFFLINE RETAILERS ARE DELIVERING ON THIS AS WELL & ONLINE CAN LEARN A LOT FROM OFFLINE
$150
$ 6000
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The usual drivers behind any on-line retail success……
- Speed of scale up- Finance- Human Resources- Innovation- Aggressive marketing- Assortment- Supplier / Vendor Relationships- Management- Supply chain- Fulfillment- Speed of Delivery
Online retail biggest opportunity for young / small / niche brands market entry +
Closer partnerships based on openness and trust with online retailers=
TURN SUPPLIERS INTO PARTNERSSHARING RISK ON INVENTORY, QUIK REPLENSHMEST, REDUCING EXPENSIVE WORKING
CAPITAL
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The retail rule of 80 / 20 must works the same in online, and should be followed in all angles
Rule should be applied from TOP level brand assortment to BOTTOM level in SKU and QUATITY PLANNING
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Example from Entertainment industry
With shorter window to execute the sale, the best way to succeed is by a much longer & deeper planning stage
~ 2 years of planning & production
~ $ 200m in production cost
~ $ 30m in merchandising sales budget
REVENUE of $221 m in
USA alone ON THE OPENING
WEEKENDNOV 23-25
Lengthy, expensive, professional planningSHORT, QUICK &
POWERFUL EXECUTION
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THE ONLY “CONSTANT” IS “CHANGE”