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Location Is (Still) Everything: Why The Real World Matters for E-Commerce David R Bell (www.davidrbell.com) YALE Customer Insights Conference New Haven May 9 th 2015
Location Is (Still) Everything: Why The Real World Matters for E-Commerce
David R Bell (www.davidrbell.com)
YALE Customer Insights Conference
New Haven May 9th 2015
18,000 orders per day
1.2m sq ft
$545m Amazon acquisition
ROPO
Warby Parker
1,000,000 No. 1 $100m+
http://www.cbsnews.com/videos/warby-parker-tops-fast-company-
magazines-annual-list-of-most-innovative-companies-in-the-world/
Metaphor and Framework
M AB =DAB
1+PBPA
Aggregate Space-Time Sales Pattern
(Shaded areas: Zip codes and at least
1 customer within the cumulative time
period)
6 months
18 months
30 months
42 months
Disaggregate Space-Time Sales Pattern
(Shaded areas: Zip codes and at least 1
customer within the cumulative time
period)
Philadelphia
New York
Month 1
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 2
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 3
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 4
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 5
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 6
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 6
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Philadelphia
New York
Month 45
San Francisco
Los Angeles
Las Vegas
Phoenix
SaltLakeCity
Adjacency
Crate & Barrel Experiment
Treatment Group Crate & Barrel store
within 50 miles
Control Group No store within 50 miles
Impact of Buy Online, Pick-Up In-Store
7% online sales
1% cart
abandonment store sales
6% store traffic
13%
Resistance
Warby Parker
Channel 1: Online
Channel 1: Online
Channel 2: Sampling SHOWROOMS
Channel 2: Sampling
Channel 3: Showroom
Home Try-On
Traditional Online Showroom
Impact of Showrooms on Sales
Home Try-On Sales
5% Web Sales
3.5% Total Sales
8.8%
Impact of Showrooms on Operational Efficiency
Web Returns
1.2% Home
Try-On Repeat
1.5% Home Try-On Orders
7.8%
Topography
Source: Euromonitor, Morgan Stanley Research; excludes travel
0%
2%
4%
6%
8%
10%
12%
10%
8%
6%
1%
US UK China India
The Importance of Offline
Implications for Offline-Online
Information
Drives Choice
Online needs
Offline
Some products now
best fulfilled online
Mobile changes
the game
Five “Game-Changers’ of Mobile
THANK YOU
SIX PRINCIPLES OF GRAVITY
G EOGRAPHY— Real world options shape
virtual world behavior.
R ESISTANCE— Frictions frustrate — identify
and eliminate.
A DJACENCY—Seed local demand and let
proximity power it.
V ICINITY—Form communities around preferences.
SIX PRINCIPLES OF GRAVITY
I SOLATION— Identify and invest in the isolated.
Y OU
T OPOGRAPHY— Use each world— real and
virtual—to enhance what you do in the other.
SIX PRINCIPLES OF GRAVITY
