Evolution at Home, Revolution Abroad

Presented on 12 October 2017, at Drapers Fashion Forum, London.

Evolution at HomeRevolution AbroadGeorges Berzgal, Vice President, EMEA, Global Ecommerce

Pitney Bowes

Research methodology

Pitney Bowes | 2017 Global Ecommerce Report | October 2017 2

1,275 Retailers

8 CountriesConducted by IDC Research

12,000 Consumers

12 MarketsConducted by ORC Research

UK FRANCE GERMANY

AUSTRALIAINDIAJAPAN

US CANADA

CHINA

HONGKONG

SOUTHKOREA

MEXICO

Our research is unique

The first global ecommerce report to incorporate retailer andconsumer insights, through the lens of both domestic and cross-border ecommerce


Co

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um

er S

urv

ey

Re

taile

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Domestic Ecommerce Cross-Border Ecommerce

Amid an abundance of complex answers,

this report seeks to answer a simple question:

How can retailers grow?


3 growth leversfor retailers today


01 02 03

01Take a cue (or two)

from marketplaces.Optimising for the domestic market

02Don’t rely on

brand alone.Capturing near-border markets

03Look like a foreigner,

talk like a local.Expanding into global markets


01 02 0301Take a cue (or two)



Domestic Ecommerce is reaching maturity globallyChange in online shoppers making ecommerce purchases daily or weekly, 2016-2017


More than half of UK retailers seeing anaemic digital growthYet most still look to expand via branded ecommerce site

Increased 100% or more

1%

Increased 25% to 99%

13%

Increased 10% to 24%

21%

Increased <10% or

Decreased64%

0% 25% 50%

UK

FR

DE

How European retailers plan to grow domestically, next 12 months

Brick & mortar stores

Own ecommerce site

Online marketplaces

Change in domestic

ecommerce revenue,

2015-2016


Consumers keen on marketplaces, while retailers hedge bets with site traffic generation

0%

20%

40%

60%

80%

100%

Onlinemarketplace

Searchengines

Retailer'ssite

Socialmedia

Mobileapp

Customerreviews

Promoemail

AU

CA

FR

DE

IN

JP

UK

US

How consumers prefer to shop

0%

10%

20%

30%

40%

50%

Add newsite

capabilities

Increase sitemarketing/

demand gen

Sell onmarketplaces

How retailers plan to grow


UK retailers want to improve customer delivery experience and fulfil more flexibly

47%

41%

40%

36%

35%

33%

Better customer delivery experience, e.g., more options, lowerprices, on-time delivery, and order status visibility and alerts

Use of store locations as point of distribution/fulfillment

Fast, flexible, reliable execution cycles, i.e., order-received toorder-picked to order-shipped

Better sourcing and optimization of inventory and labor

Better omni-channel inventory utilization—turns, sell-through, average unit retail

Reduced total and per-order carrier costs using, e.g., volumediscounts, negotiated rate structures, and optimal rate selection


Because consumers really just want free shippingIf they had to chose between ‘fast’ and ‘free’

82% 82% 85% 82% 88% 69% 70% 51% 86% 60% 65% 86%

UK FR DE AU CA CN HK IN JP MX SK US

Free shipping with a longer

delivery time

Shipping at a cost with a

shorter delivery time


And returns are an obstacle to customer retention

48%Don’t return

purchases because

they don’t know how

or it’s inconvenient.


01 02 03



Takeaways:

Low cost shipping is both a

conversion and profit driver.

Free is more important than fast

shipping—so choose your carriers

wisely.

End-to-end shipping management

is a retail priority.


01 02 0302Don’t rely on



Faced with hyper-competitive domestic markets, the majority of retailers have expanded cross-border93% of retailers are planning or already operating cross-border

GLOBAL UK FR DE

Engaged today 62% 59% 57% 59%

Plan to engage within 12 months 31% 34% 35% 31%

Not engaged and no plans within 12 months 7% 7% 8% 10%


Consumer adoption of cross-border ecommerce is growing in every country surveyed—at a rate of 6% globally.


Comparing top reasons to sell vs buy cross borderRetailers aligned with consumers in some areas


For most retailers, “cross-border” means “near-border”

Near-border: markets that are geographically or culturally close (Japan is an exception).

Lines depict top 3 target markets for retailers in each country (excluding China, South Korea, and Mexico)

Lines that curve away from the center of the chart indicate “near-border” priorities.


Lower cost near-border shipping and D&T drive up AOVCross-border AOV on average 17% higher than domestic AOV—though UK retailers lag average

17%

11%

26%

35%

Retailers Globally

UK Retailers

FR Retailers

DE Retailers


01 02 03

02Don’t rely on


Takeaways:

Consumers don’t place as high a

premium on brand—because

domestic products are similar.

Operational execution is the key

to near-border success:

better/cheaper/faster shipping,

more complete marketing and

consumer care.


01 02 0303Look like a foreigner,



Retailers’ focus on near-border markets may be missing large opportunities

Cross-border Alignment Index:Comparing retailer prioritisation with consumer demand for each country’s products. Index does notconsider consumer spending power and market entry challenges (next slide).


The most challenging markets for retailers to enterChina and the US vie for top spot

CN

US

IN

BR

AU

AR

IT

JP

CA

RU

DE

FR

MX

SK

Retailers Globally UK Retailers

CN

US

IN

BR

AU

AR IT

CA JP

RU

FR DE

MX

SK


Barriers to new market expansionExposure to customers, logistics, and marketplaces concern UK retailers the most

40%

37%

36%

33%

30%

27%

25%

16%

15%

0%

Generating demand

Shipping cost calculation

Landed cost and compliance

Marketplace storefront operations

Returns

Site localization

Logistics

Fraud/ risk mitigation

Local payment integration

Customer care


Barriers to cross-border adoption among consumers

Shipping costs and delivery time are most concerning to consumers in Asia-Pacific.

Returns processes concern North American and European consumers most.


Marketplaces are the market in AsiaConsumers who make at least half of their online purchases via marketplaces

CHINA

93%INDIA

93%

SOUTH

KOREA

79%

JAPAN

84%


The most successful cross-border retailers have a senior executive accountable


01 02 03



Takeaways:

Capitalise on brand awareness,

but localise the channel. Translate

and curate.

Sell where consumers shop:

global marketplaces are key.

Diversify your carrier network:

last-mile delivery isn’t the same

as global delivery.

3 growth leversfor retailers today


01 02 03



02Don’t rely on




Intro to Pitney Bowes97 years of refining and extending the craft of commerce

1920Company Founded

2009PB Global

Ecommerce Launches

2015PB acquires Borderfree

2017Complete

Cross-Border

PB acquires Newgistics

Mail Ship Identify Locate Communicate Go Global

Technology &

services for

creating, sorting

and sending mail

Shipping solutions

for multiple

carriers and

industries

Enterprise

customer

information

management

Location

intelligence

solutions

Customer

engagement

solutions for

digital

Cross-border

ecommerce and

logistics solutions

L O N G E V I T Y + S C A L E + S T A B I L I T Y

1978PBI

Initial Public Offering (IPO)

Thank you!

Email: [email protected]


Evolution at Home, Revolution Abroad

Technology

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