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For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER
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Page 1: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

For ONLINE RETAIL DEC 6th 2012

SPORTS & OUTDOORONLINE RETAILER

Page 2: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE 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

Page 3: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

Managing Peaks & Lows in the SPORTS GOODS / APPAREL / FOOTWEAR

business

Page 4: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

This is what retailers would like their cash flow & inventory movement to look like…..

Stable Growth &

Predictable

Page 5: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

But in most cases it looks more like this …………..

BIGGER & UNPREDICTIBLE peaks & low points

Page 6: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 7: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 8: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 9: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 10: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 11: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

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

Page 12: For ONLINE RETAIL DEC 6 th 2012 SPORTS & OUTDOOR ONLINE RETAILER.

THE ONLY “CONSTANT” IS “CHANGE”


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