E-commerce as a US market entry strategy Taking the first steps

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Americas Group (New York OC)

CD/Sabrina Ho

6 May 2015

E-commerce as a US market

entry strategy –

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US$11.48T consumer market largest globally;

Driven by changing demographics & transformed by

technology

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

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”

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

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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

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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.

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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?

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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

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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

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Leverage resources and partnerships to shape your

market entry strategy through ecommerce

• Develop Brand

Partnerships: -

• Identify local partners can help define value, market fit, innovative entry strategy – eg. Co-marketing, co-branding opps.

• Adoption of Technology

• Affordable data analytics, SEO, content marketing

• Establish network of mentors, KOLs, and ambassadors

• Alumni groups, fellowship programmes, interest/meetup groups – eg. NYC Fashion Fellows Program, NY / SF Restaurant Association

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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

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Useful resources

Consumer insights http://www.gallup.com/topic/americas.aspx http://blogs.forrester.com/category/technographics Brands to follow https://bonobos.com/ https://www.birchbox.com/ https://www.warbyparker.com/ http://gopro.com/ Customs requirements http://www.cbp.gov/trade/centers-excellence-and-expertise-information Case studies & Tips

http://www.channeladvisor.com/resource-library/white-papers/

http://www.shopify.com/blog/16692816-5-brand-strategies-to-uniquely-position-your-ecommerce-business-above-the-competition

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