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

Allied to Win Tour 2014

Introduction

Greg SquiresVP, Client SuccessShopatron, Inc.

Channel Conflict

Agenda

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

Brands’ Approaches to Pricing

Brands’ Approaches to Pricing

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

Product price varies during its life cycle

A product’s position in its lifecycle will influence pricing strategy

Agenda

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

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 to the sale➤ Product bundles

Promotions: Test Discount Offers➤ Attract new customers. Develop loyalty.➤ Case Study: Testing 3 Unique % Off Promotions➤ Which one performed the best?

10% OFF

15% OFF

20% OFF

Promotions: Test Discount Offers➤ Attract new customers. Develop loyalty.➤ Case Study: Testing 3 Unique % Off Promotions➤ Which one performed the best?

10% OFF

15% OFF

20% OFF

50% More Revenue than the 10% Off Promotion

28% More Revenue than the 20% Off promotion

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

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

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

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

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 $100 voucher for your next online purchase.

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

➤ Perfect for new product launches

➤ Special “pro” and “insider” deals

➤ Use at tradeshows or industry events

➤ Supports $0 order (Customer pays nothing)

Give products to customers through rebates or giveaways

➤ 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

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

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➤ Search Engine Marketing➤ Traffic Generation➤ Conversion Lift

Brand Marketing eCommerce

Drive Both ➤ Content marketing➤ Email marketing➤ Social Media➤ Promotions

MeasurabilityLow High

Brands Who Win Understand Customer Acquisition

High

Low

Brand Exposure

Low

High

Purchase Intent

Conversion Funnel

• Peavey amplifiers• Peavey guitar amps• Peavey electronics

• Peavey revalver mk iii• Peavey online store• Peavey.com

• Amplifiers• Guitars• Microphones

• Professional bass amp• Parlor acoustic guitar• Tom microphones

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.

Greg SquiresVP, Client SuccessEmail: gsquires@shoptaron.comPhone: 805-269-5147