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DAVID JONES BUSINESS to CONSUMER ecommerce STRATEGY Thursday, 29th June 2000 2
Agenda Background Strategy Execution 3
BACKGROUND Background Clicks and mortar is the compelling business model for retail David Jones has the key assets and competitive edge required to compete successfully as a clicks and mortar player Timing is right our business has been successfully re-positioned over the last three years DJ brand, new brand introductions, infrastructure, new stores, process, efficiencies first cycle of e-tail investments made - by others - and learnings clear 4
BACKGROUND Two key business objectives in going online 1. ecommerce Deliver incremental sales through new channel David Jones. com.au 2. Online Marketing/Services Drive incremental store traffic and increased customer loyalty First step towards David Jones multi-channel strategy - a long term opportunity, not a quick win 5
BACKGROUND Economic benefits 1. ecommerce 2. Online Marketing/Services Incremental revenue stream, forecast to grow to ~5% of DJL sales by 2005 Company s profit growth targets will be met, after ecommerce investment taken into account Low marginal cost, targeted means to drive store traffic Grow share of wallet of AB consumer, across broader age bracket Grow customer satisfaction DJ delighted customers spend 15% more p.a. than the satisfied * The Leading Edge, DJ Customer Satisfaction Survey, May-Sep 99 (n=1199) 6
STRATEGY Our online vision To create the leading retail brand online in Australia How? By leveraging our core assets - our brand - our supplier relationships, buying power, and leading and exclusive brands - our marketing strength - our stores and selling staff -- our card business and customer database By utilising the unique properties of the internet - to communicate and interact one-on-one with customers - over time, to personalise our offer around customer needs 7
STRATEGY Our online strategy 1. Structure: separate but integrated 2. Organisation, people and partnerships: flat; team based; flexible; diverse competencies; strategic partnerships 3. Technology development: manage development costs through rapid application development and incremental spend, and by capitalising on low point in market 4. Value proposition: deliver to the DJ target customer an empowering online experience that enhances our brand 8
STRATEGY Separate but integrated structure - harnessing the power of clicks and mortar Operations Merchandise & Marketing Stores Finance Human Resources ecommerce Existing IT systems Logistics expertise Product strategy & supplier negotiation Low cost marketing Sourcing (eg gifts) Low cost marketing Returns & exchanges David Jones card and database Financial mgmt support services HR support 9
STRATEGY Overview of our value proposition Contemporary and distinctively David Jones experience The leading range of products and brands, in the categories David Jones is famous for Empowering service experience, with every encounter, that is increasingly personalised over time 10
EXECUTION 11
EXECUTION 12
EXECUTION Product strategy for launch Cosmetics Christmas Best range of brands online in Australia, in depth Leading brands DJ icon category and entry to our stores Major Christmas gift category Net friendly Hampers David Jones leading hamper range, all available online Catalogue program David Jones leading Xmas catalogues, now available online Essential gifts Those key gift items, available in depth
EXECUTION Spot acquisition: overview Selected assets acquired, primarily strategic IT infrastructure covering the web store and the business system fulfilment capability customer service capability Recruitment of key employees to ensure we transfer learnings and capitalise on our investment Spot sites (toyspot, beautyspot, healthspot) to cease trading 14
EXECUTION Spot acquisition: strategic benefits Buying infrastructure at low point in market, to reduce our development costs Reaping benefits of nine months operating experience - in terms of process, people and technology - to reduce our risks (brand, financial) Buying a proven and quality solution - don t reinvent the wheel - so we can focus our efforts on quality execution delivering a customer experience that is appropriate for our brand 15
In closing... Today s announcement focuses on David Jones B2C ecommerce strategy our objectives, high level strategy and execution to date Concurrently, David Jones B2B strategy in place improving costs and efficiencies eg, 65 suppliers on EDI In B2C, David Jones has the competitive edge to win - our brand, our merchandise offer - and the important fundamentals are in place This is the start of the future in e-tail 16