maximize ecommerce lift & logistics roi

MAXIMIZE ECOMMERCE LIFT &LOGISTICS ROI

digital engagement solutions

Speakers

Introduction


Don Davis

• Editor in Chief

• Internet Retailer

Brett Zucker

• Chief Technology Officer

• Bridgeline Digital

Alan Amling

• VP of Marketing

• UPS Global Logistics & Distribution

The Web Outpaces Stores

10%

15%

20%

Consumers are shopping and researching more online


-10%

-5%

0%

5%

Q3 2009

Q4 2009

Q1 2010

Q2 2010

Q3 2010

Q4 2010

Q1 2011

Q2 2011

Q3 2011

Q4 2011

Q1 2012

Total retail

E-commerce

Source = U.S. Department of Commerce

U.S. E-Retail sales

$200

$250

$300

$350

$400

More Growth Ahead


$0

$50

$100

$150

$200

2011

2012

2013

2014

2015

2016

U.S. E-Retail Sales

CAGR=13.3%

Source = eMarketer

And The Web Influences How They Shop in Stores

The sale increasingly starts long before they arrive


Source = NPD Group

Barriers to ordering online

Logistics Matter


Source = Alix Partners Home-Delivery Shopping Survey

What consumers want improved

Logistics Matter


Source = comScore, UPS

Order percentage w/ free shipping – Holiday 2011 v. 2010

30%

40%

50%

60%

70%

52% of Online Orders Shipped Free in Q4 2011


0%

10%

20%

30% 2010

2011

Source = comScore

In-store pickup of online orders: retailers in IR Top 500

Logistics Matter


Source = Internet Retailer Top 500 Guide

Poll Question

How many have an integrated logistics solution?

� Warehouse Management System (WMS) – ERP

� Front-end Web – WMS

� Front-end Web – ERP – WMS

� I don’t know


� I don’t know

An Established Logistics Provider Can Offer Key Competitive Advantages

Why Is Logistics Important to eCommerce?

FINANCIAL IMPACT SPEED TO MARKET RELIABILITY

� Convert fixed capital expenses

into activity based cost

� Reduction in direct operating

expenses

� Visibility to data and

product information

� Flexibility to expand into

new geographic markets

� Improvement in customer

service and responsiveness

� Increase in order and


expenses

� Optimization of transportation

network

� Improvement in labor and

asset utilization

new geographic markets

� Launch new products

faster

inventory accuracy

� Increase in on-time

shipments

What Does a Logistics Model Look Like?

INBOUND

� System Integration

� Receiving/Put away

� Inbound Value-Added Services (VAS)

MANAGE

� Inventory Control

� Inventory Visibility

� Unique Storage Environments or

OUTBOUND

� Order Receipt

� Picking/Replenishing

� Outbound Value-Added

BASIC RETURNS

� Returns Receipt

� Returns Triage

� Returns Disposition

� Return to Stock

It’s not a one size fits all answer


� StorageRequirements

� Data and Physical Security

� Billing

� Reporting andMeasurement

� FTZ (Foreign Trade Zone) and Bonded

Services (VAS)

� Shipping

� Electronic ShippingConfirmation

� Return to Stock

– Return Refurbished

– Hold for Customer or Vendor

– Returns to Vendor

Logistics Enables Your Strategy

What to Look For

Selecting a Logistics Partner

� Financial Stability

� Business Experience

� Management depth and strength

� Commitment to continuous improvement

� Growth potential

� Security


� Reputation

� Strategic Direction

� Technology

� Global Capability

� Chemistry and compatibility

� Ethics

� Cost

Shopping Experience Enhanced by Availability of Free Shipping / Order Delivery Insight

Use Logistics to Improve Customer Satisfaction

7 7

Free shipping on most items

Knowing what day my purchase will be delivered

Factors Influencing Total Purchasing Experience


37

18 14

10

8 Easy to understand returns process

Availability of express shipping choices

Offers environmentally-responsible products

Ability to select a 2-hour delivery window

Ability to re-route packages to an alternate location while in transit

Source = comScore UPS Customer Experience Study, March 2012

Question: Thinking of factors that would influence your total purchasing experience with a retailer, how influential is each of the following factors?

In Addition to Free Shipping Availability, Timely Arrival of Shipments Would Most Often Encourage Shoppers to Recommend the Online Retailer

Customers Want to Know Order Status

“I have told family friends numerous

times about free shipping offers.”

Recommendation of Online Retailers

- Top 4 Factors -



Question: Assuming you are happy with the product you purchased, what service features are most likely to make you recommend an online retailer? Question: Assuming you are happy with the product you purchased, what service features have actually led you to recommend an online retailer?

Shipping Costs and Products Arriving Damaged Are Among Top Complaints Leading Online Shoppers to Make a Negative Recommendation

Customers Will Make a Bad Experience Known

“If I had [a] really bad experience with

a site, I will share with my close family and

Reasons that Would Lead to a Negative Recommendation of the Retailer



Question: What experiences (not including price or the product itself) would most likely lead to a negative recommendation to friends/family?

a site, I will share with my close family and

friends to warn them. It could be anything

from a delayed shipment, or broken items,

refunds not given or I have to pay for

return shipping.”

It’s not just about free shipping

Use Logistics as a Way to Close the Sale

� 40% of shoppers are willing to pay for shipping to get their

products faster

� 48% of shoppers are NOT willing to wait longer than 5 days


for purchase delivery

� 42% of shoppers will abandon their shopping carts because

of delivery time estimates


Ease of Making Returns/Exchanges More Important to Customer than Free Shipping

In Fact…

Higher Importance/Higher SatisfactionHigher Importance/Lower Satisfaction


Lower Importance/Higher SatisfactionLower Importance/Lower Satisfaction


Logistics are essential for after sale support and returns satisfaction

Use the Return Process to Your Advantage

� Retail returns have increased 15% between 2011 and 2012

� In line with the growth in the direct-to-consumer marketplace

� Consumers feel strongly about the returns process

� Rated among the lowest areas of satisfaction in their online shopping


experience

� Rated as a top area where they want to see improvement

� Turn this into an advantage

� Less Inventory

� Better Inventory Management

� Increased Sales

Make it Easy and Watch Customer Satisfaction Increase

Ways to Support Returns

� Make it easy to get a return label

� Let your customer print return labels directly from the web or include return

label in the package

� Drop off a return at a carrier collection point


� Driver, authorized shipping outlet, drop boxes and mailbox

� Instant exchange

� Fulfill the return while simultaneously delivering a replacement item

Growing Your International Customer Base

Logistics Can Take Your eCommerce Operation Global

� Internationalization opens your store to new marketplaces and populations


� Consider critical options

� Support sales in international currencies

� Handle VAT, regulations, tariffs and fees

� Accommodate multi-language environment

� Support foreign shipping address formats

� Unique storage requirements and regulations

What is the current state of your eCommerce platform?

Poll Question

� Current platform meets our needs

� Current platform needs enhancement

� No platform in place

� Not sure


� Not sure

LOGISTICS

eCommerce Requires Two Pieces

COMPELLINGONLINE STORES


� Digital Strategy

� User Center Design

� Web Store development

� Search Engine Optimization

� World Class eCommerce Platform

� eCommerce Marketing Support

� Supply Chain Management

� Inventory Management

� Pick, Pack, & Ship

� Value Added Services

� e.g., Returns and repairs

� Store ready packaging

Order Placed

Order Stored in

iAPPSPushes to

iAPPSPushes to

Warehouse Picks,

Packs &

Tracking Info Sent to

Customer Receives

Customer Creates an

Customer Ships Goods

Warehouse Receives

Warehouse Notifies

iAPPS of

The Lifecycle of an Order

Fulfillment: Getting warehoused goods in an

order put in a box and sent to a customer.

AKA, Logistics, Third Party Logistics, 3PL

ERP: Enterprise Resource Planning is a back-office system to run company

operations including customer, order, invoicing and potentially product/inventory information. Large scales systems such as

Oracle, SAP, etc.

Item Master: Total list of products in catalogue

available to sell. Stored in iAPPS, Product Information

Management system (PIM) or ERP.

RMA: Return Merchandise Authorization is required to tell the vendor you’d like to

return something.

Pick Ticket: Message sent to a warehouse to say what was order and where to ship it.


Placed Online

Stored in iAPPS

Pushes to Warehouse

Pushes to ERP

Packs & Ships

Info Sent to iAPPS

Receives Order

Creates an RMA

Goods Back to

Warehouse

Receives Goods

iAPPS of Return

iAPPS and GWS Together


GWSERP

iAPPS / WMS Out of the Box Integration


Who is This Solution For?

� With $5 - $25mm in online revenue ($50mm+ total revenue – 10% online)

� That are looking for an engaging store, new sales channel or global distribution

� That values brand and user experience as a differentiator

� That may require Value Added Services (e.g., labeling, repair)

The Total eCommerce Solution from Bridgeline and UPS Was Developed for Retailers:


� That now have or may have global distribution needs

� Multi-currency and distributed footprint

One seamless, end-to-end solution gives you the best in:

• eCommerce technology

• Digital strategy know-how

• Logistics and fulfillment expertise

Premier Global Manufacturing Brand

Case Study

The Brand wanted to expand their market sharein the North American market by revisiting theirdistinctive style and design. Leveraging thecurrent in-place dealer network, the team wastasked to approach this new channel as if it werea brand new storefront.

The soon to be launched Total eCommercesolution powered by iAPPS with fulfillment byUPS is the Brand’s first entry into an online B2Cmarketplace.

SolutionChallenge


The solution goals are summed up as follows:

� Build brand awareness� Develop an online catalog� Support Dealer “Brick-and-Mortar” storefronts� Develop infrastructure to

support growth and streamline operations

The end solution will:

� Improve how the company targets, communicates, sells, and fulfills product to its customer base

� Enhance brand awareness� Increase online sales of lighting fixtures and

decorating accessories

Thank you for attending

Q&A


Don Davis

• Editor in Chief

• Internet Retailer

Brett Zucker

• Chief Technology Officer

• Bridgeline Digital

Alan Amling

• VP of Marketing

• UPS Global Logistics & Distribution

iAPPScommerce.com

800.603.9936

maximize ecommerce lift & logistics roi

Technology

digital engagement solutions0

logistics important

logistics provider

integrated logistics

logistics model look

receipt returns triage

web influences

disposition return