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For ONLINE RETAIL DEC 6th 2012
SPORTS & OUTDOORONLINE RETAILER
ABOUT HEVEREST. RU HEVEREST.RU IS UNIQUE INVESTMENT OPPORTUNITY IN HIGHLY ATTRACTIVE RUSSIAN E-COMMERCE
2
HEVEREST.RU IS ONE OF THE LEADING E-COMMERCE PLAYERS IN THE SPORTS GOODS INDUSTRY
• Launched during summer 2011• Is an Online store and community of experts and fans, who like, support outdoor activities and sports
lifestyle; • Already generates ~ 1 M EUR IN monthly in gross demand• Already hosts ~ 2 mln. visits per month on Heverest.ru website; • We carry more than 300 brands and ~ 9,000 SKUs on our website, most of which is in our inventory
Our big goal is to buildA #1 e-commerce company in online Sports & Outdoor market in Russia and the CIS
Managing Peaks & Lows in the SPORTS GOODS / APPAREL / FOOTWEAR
business
This is what retailers would like their cash flow & inventory movement to look like…..
Stable Growth &
Predictable
But in most cases it looks more like this …………..
BIGGER & UNPREDICTIBLE peaks & low points
Global & Local Retail trends …………
Most profitable (full price) and bigger share of sales are coming relatively from a very few weeks within the 52 weeks a year
- The few big days of retail during a single year keep getting bigger every year
- Black Friday in USA (and another 10 important days) account for a much larger share of the total annual U.S. retail pie than ever before
- In Russia collectively the similar 10-15 days a year like MARCH 8, BACK TO SCHOOL, January 6th , the week of SNOW FALL, Easter, last 4 days of year end, etc… are generating more revenue within the annual calendar
- Accordingly the low points (slow selling period) keeps getting longer in days or weeks in between this variable peaks
The challenges for any retail business
MAXIMIZE THE PEAKS !!- On-time stock up of inventory? – PRODUCT !- Attacking the consumer from various media channels ? – PROMOTION !!- Ensuring initial price is correct (full margin revenue) ? – PRICE !!!- Adequate Manpower at the last mile (delivery / sales floor)? – PLACE !!!!
MINIMIZE THE LOWS !!- 52 weeks assortment offers (not just 4 seasons) ? – PRODUCT !- Keeping the consumer interested each day / week / month to visit? – PROMOTION !!- Right level of discounts and promotion to keep stock moving? PRICE !!!- Keeping expenses under control at the last mile (fulfillment / shop floor) ? – PLACE !!!!
Seems to boil down to EXECUTING the 4Ps of MarketingPRODUCT – PRICE – PROMOTION – PLACE
Key Success Factors…in a super competitive world ………..
PRODUCT – FULL STOCK UP BEFORE SEASONTHE ONE WHO CAN STOCK UP MORE & EARIER HAS A BIGGER CHANCE TO WIN!
PRICES – BEING STRRETCHED UP & DOWNALL SUCCESSFUL BRANDS HAVE FAR BIGGER RANGE OF ENTRY PRICED INSPIRATIONAL PRODUCTS AT THE BOTTOM & SUPER EXPENSIVE EXCLUIVE PRODUCTS AT THE TOP
PROMOTION – ALL DIMENSIONS COVEREDMARKETING HYPE AND ANTICIPATION LIKE NEVER BEFORE
PLACE - CUSTOMER EXPEREINCE LIKE NEVER BEFOREVisual merchandising - customer service - navigationUSER EXPERIENCE IS NOT EXCLUSIVE TO ONLINE, OFFLINE RETAILERS ARE DELIVERING ON THIS AS WELL & ONLINE CAN LEARN A LOT FROM OFFLINE
$150
$ 6000
The usual drivers behind any on-line retail success……
- Speed of scale up- Finance- Human Resources- Innovation- Aggressive marketing- Assortment- Supplier / Vendor Relationships- Management- Supply chain- Fulfillment- Speed of Delivery
Online retail biggest opportunity for young / small / niche brands market entry +
Closer partnerships based on openness and trust with online retailers=
TURN SUPPLIERS INTO PARTNERSSHARING RISK ON INVENTORY, QUIK REPLENSHMEST, REDUCING EXPENSIVE WORKING
CAPITAL
The retail rule of 80 / 20 must works the same in online, and should be followed in all angles
Rule should be applied from TOP level brand assortment to BOTTOM level in SKU and QUATITY PLANNING
Example from Entertainment industry
With shorter window to execute the sale, the best way to succeed is by a much longer & deeper planning stage
~ 2 years of planning & production
~ $ 200m in production cost
~ $ 30m in merchandising sales budget
REVENUE of $221 m in
USA alone ON THE OPENING
WEEKENDNOV 23-25
Lengthy, expensive, professional planningSHORT, QUICK &
POWERFUL EXECUTION
THE ONLY “CONSTANT” IS “CHANGE”