pricing and channel management

Channel Friendly Commerce: How to Price & Promote Your Products in a Multi-Channel World

Allied to Win Tour 2014

Agenda

Drive sales through:➤ Price parity➤ Promotions➤ Marketplaces➤ Promotional value cards➤ Powerful brand marketing

Brands’ Approaches to Pricing

Online Price Parity Is Paramount

Channel Disparity Parity

Brand’s Website $219 $199

Amazon $179 $199

eBay $169 $199

Big Box $189 $199

Specialty Retailer $199 $199

Agenda


Promotions: Offer Free Shipping

➤ Persistently offer free shipping➤ Shoppers expect it. ➤ The 2nd most common reason

for leaving a site, behind price.➤ Offer at a threshold near

average order value

Promotions: Get creative

➤ Gift with purchase➤ Add value by offering rewards (loyalty)➤ Product bundles

Promotions: Flexible Fulfillment

When an order has a promotion applied,

brands have options:

1. Brand ships direct➤ Auto-assign to manufacturer

2. Dealers ship ➤ Stores have choice to request order

3. Dealers ship and are reimbursed ➤ Brand subsidizes promotion

Agenda


Marketplace strategy affects a brand’s online sales

How Brands Manage Amazon:

1. Limit Amazon’s product mix

2. Maintain tight pricing control

3. Manage 3P (Third Party) Sellers

* VERO: eBay’s Verified Rights Ownership program

How Brands Manage eBay

1. Limit # of dealers selling

2. Use VERO* to manage pricing

3. Take full control of eBay sales

Easily Extend Your eCommerce Into New Channels

Consumer places an order on eBay.

The order is sent to the Shopatron order exchange.

The closest participating retailer is assigned the order or it is fulfilled by the manufacturer.

Consumer receives the order via shipment or in-store pickup

Make eBay Your Own Channel

Shopatron merchant: Consumer electronics

1. “We cleaned up our distribution channels”

2. Stopped unauthorized eBay activity

3. Launched branded eBay store

4. Increased dealer-fulfilled revenue by 85%

Prior year Current year

eBay SalesWebsite Sales

Case Study➤ 2 Powersports brands selling apparel & accessories on eBay

eBay Customers are a Unique Bunch

* Study based on July-December 2013 eBay sales for powersports brands selling through Shopatron. Customer email addresses were compared to assess new or returning customers.

90% Over 90% of eBay buyers had not

purchased from the brand’s website.

Agenda


Game Changer: Promotional Cards

Powerful tool for online sales➤ Offer attractive pricing without discounting product➤ Opens a new ecommerce revenue stream

➤ A payment method in checkout (Not a promo code)➤ Shoppers perceive these as discounts➤ Brands don’t reduce price below MAP

Effective Online Pricing

Send special offers to:➤ Under-engaged customers

➤ Prospective customers to grow your following.

➤ Loyal customers to encourage repeat purchase

Re-engage and grow your customer base

Dear Shopper,

We want to thank you for being a loyal shopper on our website.

Below is a $25 voucher for your next online purchase.

Code: 1234567891234567Pin: 1234Valid through July 1st, 2014

➤ Perfect for new product launches

➤ Special “pro” and “insider” deals

➤ Use at tradeshows or industry events

➤ Supports $0 order (Customer pays nothing)

A better way to give away

➤ Appease customers with promotional value codes.

Turn customer appeasement into customer-retention

Dear Shopper, We sincerely apologize for your lost shipment. Below is a $20 voucher for your next purchase at our website. Thanks for your understanding.

Code: 1234567891234567Pin: 1234

Independent Studies Show:➤ 72% of card recipients will come back to shop again.➤ Shoppers spend an average of 40% more than card value

Shopatron 2014 Case Study: ➤ $15 codes distributed➤ Average customer spent $27➤ Shoppers spent 80% more than card value.

Gain Incremental Sales

Promotional Cards

Promotional Cards are different from gift cards and promo codes:

Promotional Cards Gift Cards Promotion Codes

Payment Method Payment Method Discount Code

Can Expire Never Expires (Escheatment Liability)

Can Expire

No Stored Value Stored Value No Stored Value

Agenda


Powerful Brand Marketing

Brand marketing aims to:➤ Define brand identity➤ Develop brand equity➤ Drive brand loyalty

Great brands do this through:➤ Content➤ Engagement➤ Growing brand following

When Marketing & eCommerce Teams Work in Silos, Online Sales Suffer

MeasurabilityLow High

Drive Brand➤ Brand Image➤ Sponsorships➤ Engagement➤ Social Media

Drive Sales➤ Search Engine Marketing➤ Traffic Generation➤ Conversion Lift➤ Promotions

Brand Marketing eCommerce

Collaboration Drives Brand & Sales

Drive Brand➤ Brand Image➤ Sponsorships➤ Engagement

Drive Sales➤ Traffic Generation➤ Conversion Lift➤ Promotions

Brand Marketing eCommerce

Drive Both ➤ Search Marketing➤ Content marketing➤ Email marketing➤ Social Media

MeasurabilityLow High

Brands Who Win Understand Customer Acquisition

High

Low

Brand Exposure

Low

High

Purchase Intent

Conversion Funnel

• Headphones• Home theater systems• Outdoor speakers

• On-ear headphones• Bluetooth speaker system• Wireless computer speakers

• Klipsch• Klipsch headphones• Klipsch speakers

• Klipsch image s4i• Klipsch online store• Klipsch.com

Recipe for SuccessAssessment Under-performers Top performers

Top Priority Dealers Consumers

Online Sales Goal None Defined & Measured

Website Purpose Show Product Sell Product

Website Pricing MSRP MAP

Channel Control Weak Strong

Run Promotions Rarely Periodically

Ecommerce as % of Company Sales

< 1% 5%+

Thank You.