E-commerce as a US market entry strategy Taking the first steps
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1 E-commerce as a US market entry strategy Taking the first steps Americas Group (New York OC) CD/Sabrina Ho 6 May 2015
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3 US$11.48T consumer market largest globally; Driven by changing demographics & transformed by technology The New Frugality willingness to spend but focus on value and quality Price sensitivity remains; choices made based on value-for-money mixed with small luxuries/treats Investing in consumer insights critical to accurately defining value Changing demographics drive demand for health, convenience and ethnic products Baby Boomers, followed by Millennials, fastest growing segments Ethnic influence Hispanic, African-Americans & Asians command US$2T market Mainstreaming of ethnic flavours as the American lifestyle diversifies and evolves; opens opportunities to more foreign lifestyle concepts Technology transforming US consumer expectations and experiences Data Analytics enables brands and consumers to be better informed, more targeted High-touch expectation online and offline seamless omni-channel engagement and personalisation Access to technology has helped level playing field for new/foreign entrants, but also increased competition 3
4 E-commerce the natural evolution of the physical retailer US ecommerce sales to reach US$439.1b in 2015 but it will only make up about 7.1% of total retail sales US consumers are spending again, but emphasis is on good value and experience Mcommerce represents only 1.6% of US retail in 2015, but influences 55.6% of retail sales
5 Retail basics apply to e-commerce too Know your customer Men drive nearly as much spending online in the U.S. as women, and men are more likely to make purchases on mobile devices. Millennials, those consumers aged 18 to 34, spend around $2,000 annually on e-commerce. This, despite having lower incomes than older adults. Boomers and seniors have adopted mobile commerce. One in four mobile shoppers in the U.S. is over the age of 55. Online shoppers tend to live in households with higher-than-typical incomes.
6 Creating a seamless commerce experience Data, Data, and more Data What do your current customers think of your business? What do potential customers think of your business? Do they shop by brands or by products? How do they discover brands? What are the customer s expectations for an end-to-end experience? Where, when and frequency of touch points needed for customer retention?
7 Marketplace vs Multilabel Merchants vs Monobrand sites one or all? Mass Marketplaces Amazon, ebay, 11Main, Etsy Aggregated customer base, Streamline market entry, Provide localised offerings Access to customers data, Commoditised product, Brand control Multilabel Merchants Bestbuy.com, Zappos, Birchbox, Furniture.com Targeted customer base & customised service offering Limited branding customisation, Stiff competition Monobrand (D2C) Sites Warby Parker, BlueNile, Bonobos Control over products, pricing and customer experience Brand discovery is more difficult and expensive, resources needed to manage site & vendors
8 Key considerations startup vs established company Launching a brand vs launching a product Comparing brand value and product attributes with perceived value Identifying the right audience & buying habits B-B considerations Contract terms vs cost of financing Brand profiling and product showcase/mix B-C considerations Cost of consumer PR new & ongoing engagement, multichannel management + conversion to sales (?) E-commerce supporting services in-house or outsource Pricing Cost vs value-driven pricing Competitor analysis
9 Leverage resources and partnerships to shape your market entry strategy through ecommerce Establish network of mentors, KOLs, and ambassadors Develop Brand Partnerships: - Identify local partners can help define value, market fit, innovative entry strategy eg. Comarketing, co-branding opps. Adoption of Technology Affordable data analytics, SEO, content marketing Alumni groups, fellowship programmes, interest/meetup groups eg. NYC Fashion Fellows Program, NY / SF Restaurant Association
10 Building institutional ties and networks for SG companies to access strong local partners and key contacts Institutional partnerships with marketplace players, eg. Amazon Create go-to-market platforms for companies to access readily available resources regarding marketplace partners Develop US brand advisory panels to create pipeline of US-ready products Network of stakeholders, professional advisors who can share insights on market entry requirements and process Best practices & innovation showcase/sharing Highlight business innovation and best practice case studies in consumer industries reflecting emerging trends in the US and nuances of the US consumer market. Peer sharing between Singapore/Asian companies in the US to outline cultural differences and localisation needs
11 Useful resources Consumer insights Brands to follow Customs requirements Case studies & Tips
12 Thank You
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