evolution at home, revolution abroad
TRANSCRIPT
Presented on 12 October 2017, at Drapers Fashion Forum, London.
Evolution at HomeRevolution AbroadGeorges Berzgal, Vice President, EMEA, Global Ecommerce
Pitney Bowes
Research methodology
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 2
1,275 Retailers
8 CountriesConducted by IDC Research
12,000 Consumers
12 MarketsConducted by ORC Research
UK FRANCE GERMANY
AUSTRALIAINDIAJAPAN
US CANADA
CHINA
HONGKONG
SOUTHKOREA
MEXICO
Our research is unique
The first global ecommerce report to incorporate retailer andconsumer insights, through the lens of both domestic and cross-border ecommerce
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Co
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um
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Re
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Domestic Ecommerce Cross-Border Ecommerce
Amid an abundance of complex answers,
this report seeks to answer a simple question:
How can retailers grow?
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 4
3 growth leversfor retailers today
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 5
01 02 03
01Take a cue (or two)
from marketplaces.Optimising for the domestic market
02Don’t rely on
brand alone.Capturing near-border markets
03Look like a foreigner,
talk like a local.Expanding into global markets
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 6
01 02 0301Take a cue (or two)
from marketplaces.Optimising for the domestic market
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 7
Domestic Ecommerce is reaching maturity globallyChange in online shoppers making ecommerce purchases daily or weekly, 2016-2017
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More than half of UK retailers seeing anaemic digital growthYet most still look to expand via branded ecommerce site
Increased 100% or more
1%
Increased 25% to 99%
13%
Increased 10% to 24%
21%
Increased <10% or
Decreased64%
0% 25% 50%
UK
FR
DE
How European retailers plan to grow domestically, next 12 months
Brick & mortar stores
Own ecommerce site
Online marketplaces
Change in domestic
ecommerce revenue,
2015-2016
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Consumers keen on marketplaces, while retailers hedge bets with site traffic generation
0%
20%
40%
60%
80%
100%
Onlinemarketplace
Searchengines
Retailer'ssite
Socialmedia
Mobileapp
Customerreviews
Promoemail
AU
CA
FR
DE
IN
JP
UK
US
How consumers prefer to shop
0%
10%
20%
30%
40%
50%
Add newsite
capabilities
Increase sitemarketing/
demand gen
Sell onmarketplaces
How retailers plan to grow
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UK retailers want to improve customer delivery experience and fulfil more flexibly
47%
41%
40%
36%
35%
33%
Better customer delivery experience, e.g., more options, lowerprices, on-time delivery, and order status visibility and alerts
Use of store locations as point of distribution/fulfillment
Fast, flexible, reliable execution cycles, i.e., order-received toorder-picked to order-shipped
Better sourcing and optimization of inventory and labor
Better omni-channel inventory utilization—turns, sell-through, average unit retail
Reduced total and per-order carrier costs using, e.g., volumediscounts, negotiated rate structures, and optimal rate selection
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Because consumers really just want free shippingIf they had to chose between ‘fast’ and ‘free’
82% 82% 85% 82% 88% 69% 70% 51% 86% 60% 65% 86%
UK FR DE AU CA CN HK IN JP MX SK US
Free shipping with a longer
delivery time
Shipping at a cost with a
shorter delivery time
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And returns are an obstacle to customer retention
48%Don’t return
purchases because
they don’t know how
or it’s inconvenient.
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01 02 03
01Take a cue (or two)
from marketplaces.Optimising for the domestic market
Takeaways:
Low cost shipping is both a
conversion and profit driver.
Free is more important than fast
shipping—so choose your carriers
wisely.
End-to-end shipping management
is a retail priority.
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01 02 0302Don’t rely on
brand alone.Capturing near-border markets
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 15
Faced with hyper-competitive domestic markets, the majority of retailers have expanded cross-border93% of retailers are planning or already operating cross-border
GLOBAL UK FR DE
Engaged today 62% 59% 57% 59%
Plan to engage within 12 months 31% 34% 35% 31%
Not engaged and no plans within 12 months 7% 7% 8% 10%
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Consumer adoption of cross-border ecommerce is growing in every country surveyed—at a rate of 6% globally.
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Comparing top reasons to sell vs buy cross borderRetailers aligned with consumers in some areas
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For most retailers, “cross-border” means “near-border”
Near-border: markets that are geographically or culturally close (Japan is an exception).
Lines depict top 3 target markets for retailers in each country (excluding China, South Korea, and Mexico)
Lines that curve away from the center of the chart indicate “near-border” priorities.
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Lower cost near-border shipping and D&T drive up AOVCross-border AOV on average 17% higher than domestic AOV—though UK retailers lag average
17%
11%
26%
35%
Retailers Globally
UK Retailers
FR Retailers
DE Retailers
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01 02 03
02Don’t rely on
brand alone.Capturing near-border markets
Takeaways:
Consumers don’t place as high a
premium on brand—because
domestic products are similar.
Operational execution is the key
to near-border success:
better/cheaper/faster shipping,
more complete marketing and
consumer care.
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01 02 0303Look like a foreigner,
talk like a local.Expanding into global markets
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 22
Retailers’ focus on near-border markets may be missing large opportunities
Cross-border Alignment Index:Comparing retailer prioritisation with consumer demand for each country’s products. Index does notconsider consumer spending power and market entry challenges (next slide).
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The most challenging markets for retailers to enterChina and the US vie for top spot
CN
US
IN
BR
AU
AR
IT
JP
CA
RU
DE
FR
MX
SK
Retailers Globally UK Retailers
CN
US
IN
BR
AU
AR IT
CA JP
RU
FR DE
MX
SK
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Barriers to new market expansionExposure to customers, logistics, and marketplaces concern UK retailers the most
40%
37%
36%
33%
30%
27%
25%
16%
15%
0%
Generating demand
Shipping cost calculation
Landed cost and compliance
Marketplace storefront operations
Returns
Site localization
Logistics
Fraud/ risk mitigation
Local payment integration
Customer care
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Barriers to cross-border adoption among consumers
Shipping costs and delivery time are most concerning to consumers in Asia-Pacific.
Returns processes concern North American and European consumers most.
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Marketplaces are the market in AsiaConsumers who make at least half of their online purchases via marketplaces
CHINA
93%INDIA
93%
SOUTH
KOREA
79%
JAPAN
84%
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The most successful cross-border retailers have a senior executive accountable
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 28
01 02 03
03Look like a foreigner,
talk like a local.Expanding into global markets
Takeaways:
Capitalise on brand awareness,
but localise the channel. Translate
and curate.
Sell where consumers shop:
global marketplaces are key.
Diversify your carrier network:
last-mile delivery isn’t the same
as global delivery.
3 growth leversfor retailers today
Pitney Bowes | 2017 Global Ecommerce Report | October 2017 29
01 02 03
01Take a cue (or two)
from marketplaces.Optimising for the domestic market
02Don’t rely on
brand alone.Capturing near-border markets
03Look like a foreigner,
talk like a local.Expanding into global markets
Intro to Pitney Bowes97 years of refining and extending the craft of commerce
1920Company Founded
2009PB Global
Ecommerce Launches
2015PB acquires Borderfree
2017Complete
Cross-Border
PB acquires Newgistics
Mail Ship Identify Locate Communicate Go Global
Technology &
services for
creating, sorting
and sending mail
Shipping solutions
for multiple
carriers and
industries
Enterprise
customer
information
management
Location
intelligence
solutions
Customer
engagement
solutions for
digital
Cross-border
ecommerce and
logistics solutions
L O N G E V I T Y + S C A L E + S T A B I L I T Y
1978PBI
Initial Public Offering (IPO)