omnichannel lessons from value to luxury
DESCRIPTION
Ampersand and Rackspace gathered 25 retailers in a room to discuss the dichotomy of value and luxury retail and whether the two are actually more similar than they seem. Speakers: - Darryl Adie, Managing Director, Ampersand - Roland Breadner, Head of Ecommerce Practice, Rackspace - Tom Lodge, Magento - Sophie Albizua, eNova PartnershipTRANSCRIPT
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Linking Omnichannel Lessons!
From Value to Luxury
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Agenda
! 13:00 : Introduction!Darryl Adie, Ampersand !Roland Breadner, Rackspace
! 13:30 : How to bring a value retailer online!Sophie Albizua, eNova Partnership
! 13:45 : Meeting the demands of the luxury consumer!Darryl Adie, Ampersand
! 14:00 : Coffee Break
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Agenda CONT.
! 14:15 : Retailer-to-retailer session!With synopsis of key discussions from each group
! 15:00 : Panel and Q&A: !Evolving with the connected consumer!Darryl Adie, Ampersand!Roland Breadner, Rackspace !Sophie Albizua, eNova Partnership!Tom Lodge, Magento (& previously Kurt Geiger)
! 16:00 Close
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Introduction Darryl Adie, Ampersand!Roland Breadner, Rackspace
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WELCOME
Roland Breadner, Head of eCommerce Practice
Darryl Adie, Managing Director
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ABOUT RACKSPACE
9 Worldwide Data Centers
5,000+ Rackers
Global Footprint Customers in 120+ Countries
Annualized Revenue Over $1B
60% 100 OF THE
We Serve FORTUNE®
OV
ER
200,000+ 90,000+ Servers 26,000+ VM ≅70 PB Stored
Customers
Portfolio of
Hosted Solutions Dedicated - Cloud - Hybrid
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ABOUT AMPERSAND
! A technical agency focused on retail
! Experts in multichannel integration
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Working in Partnership
! Fanatical Support©®@℗ for all customers 24/7/365. Available on the phone, in person and through the help desk
! Dedicated Magento support team ! Named support and tech teams for Intensive
accounts ! Defined processes and responsibilities
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Performance and Hybrid Hosting
! Best of both worlds ! Performance of physical hardware (with PCI)
! Flexibility of cloud (pay-as-you-go and quick to deploy)
! Repeatable processes ! Standardised image-based provisioning
! Puppet-based configuration
! Repeatable deployment process
! Immediate availability. Profit.
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Hybrid Hosting Explained
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Hybrid Hosting Explained
Reliable, secure, performance
Flexible, scalable
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THE CHALLENGES OF VALUE RETAIL Online Sophie Albizua, eNova Partnership!
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Value retailers and online
Sep 2014
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The maths... ! Revenues: Basket size + delivery revenues
! Costs: Logis>cs and supply chain costs (warehousing, PPD, packaging,
delivery / courier costs), product and head office costs: (Photography,
Marke>ng, head office, IT)
High value item Low value item
AOV £100 £10
Gross margin 50% 50%
GM £ £50 £5
PPD & delivery costs £5 £5
Photography and other fixed costs £4 £4
Net margin per order £41 (£4)
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The maths...
(10)
0
10
20
30
40
50
60
70
80
£5 £10 £20 £30 £40 £50 £60 £70 £80 £90 £100
Profit per order at various AOVs
Gross Margin of 20%
Gross margin of 40%
Gross margin of 60%
Gross margin of 80%
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The HURDLES... ! Low average order value
! Low margins
! Fast rotating lines
! Batch / end of lines
! Supply chain not set up for single picking
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The SOLUTIONS... ! Minimum order value
! Delivery charges
! Click and Collect
! Different product range
! Different supply chain model
! OR…..
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OR...
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OR...
cost revenue revenue cost
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Meeting The Demands Of The Luxury Consumer Darryl Adie, Ampersand
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Luxury Conundrum
! Customer expectations in luxury are often diametrically opposed to the traditional technological, physical and financial requirements of multichannel retailers
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Luxury Conundrum
! As a luxury multi-brand retailer, service may be your only differentiator!
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Consumers Want...
! An exceptional experience! ! Immediate availability
! Fast delivery
! Personal service
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Luxury Decisions
Time
Experience Cost
Luxury
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What That Requires...
! Accurate stock availability, everywhere ! Harder when customer can pull items off shelves
! Silos for stock ! High inventory risk for fashion
! Contiguous service, all of the time ! Hard to achieve without personal relationships or a
significant loyalty-driven initiative
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Combating Those Problems
! Single view of stock ! Requires intimate integration with EPOS and online
! But, what contingencies exist for failures?
! Physical speed (time elapsed) ! Fraud-screening SLA
! Batch or single-item picks? Store processes?
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Draw Boundaries
! Define parameters for cost, time & experience ! If an order can be fulfilled but only from three locations,
should it be?
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Luxury Experience
! Luxury retailers need to focus on time and experience ! Next and same day delivery
! Beautiful packaging
! Returns (easy and free)
! Many delivery and returns services cater for the lowest common denominator
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How Different Are Luxury And Value Retail?
Not a Luxury Experience
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Creating Luxury Experiences
! Click & Collect is not always a luxury experience
! Don’t just ‘keep up’
! Make customer experience your own!
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Video case study
WATCH http://amp.co/hnrax
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Click & Try
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How Different Are Luxury And Value Retail?
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Balancing Priorities
Time
Experience Cost
Luxury Value Retailer
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Value & Luxury
! Product not always differentiated
! Experience is important for both ! Value builds for scale
! Luxury builds for personalised experiences
! Efficient processes key to meeting primary objective ! Luxury designs for exceptional service
! Value designs for low cost
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Remarks Leading Into R2R Session
! What are the differences?
! What are the same?
! What can we learn from each other?
! Where does your business fit now?
! Where would you like it to be?
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Coffee Break
Back to in 15 mins.
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‘Retailer to Retailer’
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‘Retailer to Retailer’ Session
• If you could deploy one thing tomorrow, what would it be?
• What keeps you awake at night?
(Be prepared to feed back key discussion points)
DISCUSS UNTIL 14:45
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Panel + Q & A EVOLVING WITH THE CONNECTED CONSUMER Darryl Adie, Ampersand!Roland Breadner, Rackspace !Tom Lodge, Magento!Sophie Albizua, eNova Partnership!
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THANK YOU Darryl Adie [email protected]!!Roland Breadner [email protected]