Key Trends Impacting Digital Commerce by 2020 Neil Stewart – CEO, Salmon Ltd.

What we will cover today

What we will cover today

What we will cover today

What we will cover today

Black Friday 2015 was the first year it really worked from a customer perspective.

Retailers offered the same

deals online as offline

Delivery and fulfilment not an issue - it

was quicker and better (incl. same-day)

Operations tested

well in advance

Ima

ge

cre

dits

: Da

ily M

ail

2 0 1 4 2 0 1 5

Online saw dominant growth during peak 2015*

Sources *Visa Europe 2015

**National Retail Federation, Dec 2015

This has profound implications for the role of the store in 2020

Stores no longer the primary

destination for consumption

Stores will support the online

purchase not the other way around

28% 3%

In USA, 2015 was the first year when, on Black Friday,

more people shopped online than instore**

Black Friday 2016

Salmon predicts a

record-breaking

5-day online spend

of £5 billion.

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NOVEMBER 2016

23 FEBRUARY 2016 Neil Stewart

Two contrasting online behaviour types

Shopping experience based on

Differentiation Commodity

Utility

Inspiration Transaction

Discovery

Inspiration Transaction

Transaction-led experience

Shopping experience based on

Differentiation Commodity

Utility Discovery

Transactional commerce being led by Amazon

Sources: *InternetRetailing.net 9.12.2014

**learn.scrapehero.com/chart-count-of-products-in-amazon-us-for-major-categories, 2015

• Convenience isn’t just location.

It’s availability, speed of end-to-

end transaction including delivery

• Amazon move into shelf-stable

grocery and B2B

• Delivery is the battleground right

now. But the war is for Data.

48 secs

Premise: Consumers don’t want inspiration

just convenience and efficiency

Amazon has more than

320m items available to order in the USA alone**

On average consumers took an average of 48 seconds to

make a purchase*

BLACK

FRIDAY

#commerce2020

So what do you do about Amazon?

You can

Partner and utilise Amazon’s

delivery capability and customer

access

Compete by creating your own

category-focused marketplace

Compete by differentiation of both

products and experience

Inspiration Transaction

Inspiration-led experience

Shopping experience based on

Differentiation Commodity

Utility Discovery

Inspiration-led commerce equals engagement

Shoppers want to be engaged

It’s not all about an

instant transaction

They’re inspired to share

their experiences

They use a

multitude of devices

Integrated digital offering

Inspirational content

VIP access to product events

Image source: selfridges.com (1.Feb.2016)

Falling short conspires to costly failure

Differentiation Commodity

Utility

Inspiration Transaction

Discovery

The key differentiators

Harnessing the power of data to add

context to the shopping moment

The key differentiators

Developing and serving content that

inspires and leads to purchase intent

The key differentiators

Not just about convenience in terms

of speed and delivery but also the

multichannel experience

The Age of Programmatic Commerce

Where consumers and businesses allow technology

to make purchase decisions on their behalf based on

pre-programmed parameters and learned

preferences.

Growth of intelligent

products and devices + Consumers

comfortable

to share data

Why Now?

= Consumers confident to

allow devices to make repeat

purchases on their behalf

As defined by Salmon

The Age of Programmatic Commerce - Clearer?

Where consumers and businesses allow technology

to make purchase decisions on their behalf based on

pre-programmed parameters and learned

preferences.

Growth of intelligent

products and devices + Consumers

comfortable

to share data

Why Now?

= Consumers confident to

allow devices to make repeat

purchases on their behalf

As defined by Salmon

1. From consideration to automation

*Source: Kantar Worldpanel: Accelerating the growth of e-commerce: 2015 Edition

Instead of making careful considerations of their own, consumers

are relying on automation based on pre-configuration.

If results are within set parameters or tolerance, orders are made

automatically.

Role

Lock-in – Lock-out: What can the seller do to ensure they’re not

locked out?

Welcome to a new dawn for shopper marketing.

55% of online shoppers are using the same shopping list from

one purchase to the next*

Impact

Digital assistants will speed up the

decision-making for both

B2C and B2B buyers.

Continued improvement of voice

recognition will support this.

The new breed of buyers are comfortable

sharing their transactional data and have

digital assistants present options to them.

Role

Search and browse will fundamentally

change away from request-led to

recommend led.

Impact

2. The role of Digital Assistants

Anticipated ordering.

Balanced supply and demand.

Efficiency gains for supply chains and manufacturing.

Impact

Move from a “create demand” marketplace centered on

marketing, to an on-demand marketplace centered on

responding to a future of anticipating demand, based on

known patterns of behaviour.

Role

3. From demand creation to anticipation

What does this mean for you?

More B2B purchasing

will be automated and

role of salesperson

will be to enable

advance configuration

B2B for

Retail for

Online search will be

less of a focus as

automated searches do

the work for the buyer

FMCG for

A new role for brand

marketing as

consumers get locked

in and consideration

disappears

What should you be doing ?

Take Action:

1. Get ready for

Peak

2. Focus on

Transaction vs.

Experience

3. Plan your

response to

programmatic

commerce

Recognize that Amazon will play a

major role across all industries and

have a strategy for this.

Spend time looking at the

opportunities and threats that

programmatic commerce brings.

Recognise that Amazon will play a

major role across all industries and

have a strategy for this. 2

Get ready for Peak (£5bn) and a world

where digital dominates and leads the

other channels.

Get ready for Peak (£5bn) and a world

where digital dominates and leads the

other channels. 1

2

1

3

©2016 Salmon Ltd. All rights reserved. All company and product names, brands and symbols mentioned herein are brand names and/or registered trademarks of their respective owners.

Neil Stewart CEO, Salmon Ltd.

nstewart@salmon.com

Twitter: @salmonltd