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Marketplace as a Service :: Growing eCommerce in Canada

Christian Rodericks, founding partner & vp marketplace operationsSHOP.CAchristian@shop.ca@rawdrix

September 22, 2014

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Thanks! – Appreciate The Invite

Born in Toronto, OntarioUniversity of Waterloo Graduate Adult Life Spent in

Toronto, New York, LondonMarried to Colleen and Proud Dad of Ella15+ Years Startup & Consulting Executive

Janna Systems – Acquired by Siebel/OracleDeloitte Consulting – Technology StrategySHOP.CA!

SHOP.CA Joined SHOP.CA in August 2011 w/longtime friends

“Proudly Canadian!”

* according to Comscore

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So, what is Wrong w/Canada – Huh?

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What is Wrong w/Canada – ?!?

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What is Right w/Canada – Huh?

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What is Right w/Canada – Ya Mon!

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To Start - We Noticed A Whole Bunch of Right!

ecommerce in Canada is a very big market and growing quickly

$25 Billion consumer market in 2012, with a 10% CAGR going forward

No extremes in market leadership like their was in the US

2nd globally per / capita spend online

Canadian retailers are investing in Canadian focused ecommerce

Which has/will create faster consumer adoption

There is a ton of talented people in Canada – who want to stay here

People are the core to any great success

Canadians are great partners, and believe in WIN3

Part of building quickly and effectively is great partnerships

Canadians are extremely loyal – i.e. love loyalty programs

Angles of reoccurrence are important to successful ecommerce (10 per house-hold)

Canadians REALLY appreciate transparency and great service

Free shipping, no duty, free returns are core to transparency and service

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Canada continues to be a leader in online engagement

2nd in the world in time on the internet & 1st in terms of monthly page views

Online video grows in importance within our digital ecosystem

2nd worldwide in monthly hours and videos per viewer

Digital ad market is healthy and growing

724 billion display ad impressions were served, +17% year over year

“Social-media –ness” Continues to Increase

Facebook is #1 -- but Twitter, LinkedIn, Tumblr, Pinterest and Instagram are growing!

Canadian’s are digital creatures

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eCommerce Market Opportunity

Sources= StatsCan, eMarketer

2010 2011 2012 2013 2014 2015 2016

$16.75

$18.76

$21.45

$24.49

$27.82

$31.33

$34.78

B2C eCommerce Sales in Canada, 2010-2016

US$ billions eMarketerSignificant Market

Size

Canada projected to be $35 billion in 201610%+ CAGR over next five years

Canadian Market

Growth 2 “Rising Tides”

eCommerce = 1-3% of total retail USA = 11% in 2012UK = 25% by 2014

40-60% of dollars spent online go to US sites

Canadian eCommerce projected to exceeded wireless market

No Canadian market leader exists

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Billion Dollar Disruptions > Break the Rules

Disrupting Canadian eCommerce1. Transparency :: Free Shipping & Free

Returns up to 365 Days

2. Supply :: Largest Selection before the first transaction (13 million SKUs)

3. Platform :: Buying the Ferrari with spare change (IBM)

4. Scale :: infinite growth without betting the farm (Bell)

5. Speed & Ease :: Onboarding Suppliers in Less than 24 Hours

6. Demand :: Generating Awareness with Great Canadian Brands

7. People :: Having 100s of Resources working on SHOP.CA (Multiplier Effect)

Some Billion Dollar Rule Breakers

1. helping customers too much

2. technologies need to look sexy

3. selling athletic equipment is about the sport

4. customers can’t be bought with cheaper prices

5. books are meant to be read in hard copy

6. video is meant for the TV screen

7. banking customers need ATMs and branches

8. consumers wanted to buy their electronics from a retail store

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Challenges Are Only Opportunities in Disguise

Raising Capital in Canada for Consumer Internet is Hard

Attracting Talent to High Risk Ventures is Hard

No way you can attract Supply before Demand, it’s too hard

Canadian’s don’t like to SHOP Online, - myth or fact?

Canadians prefer US Sites – Really?

Canadians pay extra to SHOP and don’t Mind Doing it

Free shipping is hard to adopt broadly

Free Returns 365 days a year – what the hell?

Lack of Transparency for Canadian consumers

Canadians SHOP in the US -- Lack of home grown options

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Time to get busy …

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SHP HAPPY Buyers & Sellers

Customer ExperienceRelentless FocusFree Shipping & Returns

Service

Earn RewardsBuy MORE = Earn MORE Share MORE = Earn MORE

Loyalty

Your Favourite BrandsMillions of Products27+ Categories

Selection

Consumers Happiness

Suppliers Happiness

Biggest Online Mall in Canada Marketplace-as-a-Service (MaaS) Cost Per Order – Know ROI

Retailers, Manufacturers,

Distributors6+ Million ProductsInventory CapacityCoast-to-Coast Reach

Virtual Inventory

No InventoryNo WarehousePick-Pack-n-Ship

Drop-Ship as MOR

Operating Model

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MaaS - Known ROI > Pay on Success

Driving Purchases to the SHOP.CA MaaS

Adds to your Efforts

Search Engine Marketing (SEO)

Cost-Per-Click (CPC) PDisplay Media Cost-Per-Thousand

(CPM) PEmail Marketing

Cost-Per-Thousand (CPM) P

Affiliate Marketing

Cost-Per-Acquisition (CPA) P

Social Media Cost-Per-Click (CPC) & CPM P

Traditional Media Campaign Based P

&

SHOP.CA Marketplace-as-a-Service

No Setup FeesNo Monthly FeesNo Minimum CommitmentsJust Orders on Cost Per Order basis (CPO) You Provide Inventory we buy and sellYou Ship Product (Drop Ship)Customer RewardsIncreased Social Networking

MINIMIZE ONLINE COMPETITIVE PRESENCE

SHOP.CA adds a whole new marketing team,without adding anything to your marketing budget.

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SHOP.CA Marketplace-as-a-Service

SHOP.CA

Making Canadian Consumers HAPPYCreating New Social Customer Experiences Powered by Loyalty and Rewards thru SHOP.CA’s IP via Social Commerce MaaS

Making Canadian Suppliers HAPPYEnabling New Supplier Channels Powered by Applications and Middleware thru SHOP.CA’s IP via Supplier MaaS

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Lots of late nights!

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Challenges We Overcame

Supplier Integration Must be easy for suppliers, scalable and properly address SEO

Scale Very large product catalog, breadth and depth of catalog taxonomy

Performance/Workflow We add 10,000+ new products each week to the marketplace

Shopping Experience Navigating multi-category eCommerce can be challenging

Image Handling We render 60+MM product images into different sizes and compression

Social Commerce We are pushing the envelope and have unique IP

Loyalty and Rewards Engine tied to every purchase and social engagement

Distributed Order Management Multi suppliers per product per order, via cart and checkout

National Distribution Model Working with partners, delivering thousands of products across the country

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Team Culture – Create Happiness