ecommerce
DESCRIPTION
The increase in m-commerce has been supported by the growth of services such as click/reserve and collect, which have taken a prominent role in the shopping cycle. According to the Index, purchasing/reserving online and collecting in store, now accounts for 25% of multichannel retailers’ sales. Multi-channel retailers, those with both an online and high-street presence, recorded a month-on-month growth of 16% in December. This strong performance in December was recorded across the Index and not limited to just one particular sector. Clothing and electrical goods recorded particularly solid results, with a year-on-year increase of 17% in clothing and 18% in electricals, fuelled by the popularity of new budget tablet devices, iPhone models and gaming platforms. UK is one of the most mature markets – as consumers most avid ecommerce users 2013 ‘year of the mobile’: twice as much spent on mobile devices in December 2013 compared to December 2012 Supported by the growth of services such as click/reserve and collect – which now accounts for 25% of multichannel retailers’ sales US US eCommerce growth slows as US retailers fail to capitalize on overseas eCommerce market APAC In 2014, for the first time, consumers in APAC will spend more on ecommerce purchases than those in North America China will take the majority of this – will take in six of every $10 spent online in APACTRANSCRIPT
eCommerce
February 2014
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Contents
approach
1. Market overview
2. Case studies
3. M&A market
3
• UK is one of the most mature markets
- Largest market in EU- 39m out of 63.3m of UK population already buy
online
• 2013 ‘year of the mobile’
- Twice as much spent on mobile devices in December 2013 compared to December 2012
• Growth in 2013, supported by:
- Increase in services such as click/reserve and collect
• US retailers fail to capitalize on overseas market
- Over 1/3 of US retailers have not expanded internationally
• In 2014, consumers in APAC will spend more online than those in North America
- APAC will claim more than 46% of digital buyers, onlly16.9% of population
• Growth in 2014 will come from:
- Expanding online and mobile user bases in emerging markets
- Increasing mCommerce sales- Advancing shipping and payment options- Push into new international markets by major brands
eCommerce – key stats
Sources: eConsultancy (January 2014), IMRG (January 2014), International Business Times (October 2013), eCommerce week (January 2014), bpost international (January 2014)
$trn
35%
32%
23%
4%4%
2%
APAC
North America
Wesern Europe
Central & Eastern Europe
Latin America
Middle East & Africa
1.058
1.248
1.5
1.763
2.043
2.345
0
0.5
1
1.5
2
2.5
2012 2013 2014 2015 2016 2017
B2C eCommerce Sales Worldwide
B2C eCommerce Sales Worldwide in 2014, by region
4
Trends – 7 predictions for 2014
1. Tablet first design – default for responsive websites is still desktop – with tablets overtaking PCs in 2016 it is likely that responsive websites will be designed for tablet first
2. Cross-channel purchase journeys – currently cross-channel purchase journeys are being enabled by location and identification tools / solutions, i.e. iBeacons, and wearables such as Galaxy gear
3. Mobile payments won’t take off until 2015 – consumers still need a convincing reason on why they should use mwallets and until then retailers are unlikely to invest in this technology. A large number of different mwallet technologies have come to market recently – still not known which of these will make the biggest impact
4. Consumers learning value of data and privacy – consumers are becoming more savvy about their digital presence and the value of their data to advertisers. Needs to be a clearer value exchange – so consumers are incentivised to provide etailers with data about themselves and are aware on where that data is going
5. Mobile and tablet purchase points – according to some sources one in five store checkouts will take place on a mobile / tablet by 2015
6. Reduce high return rates – etailers currently face high return rates, on average return rates are 25% but some etailers face return rates of >50%. Customers need to have enough information to make an informed purchase and there is too much inconsistency in sizing – solutions such as virtual changing rooms are attempting to combat this
7. Learn how to accelerate growth – for bricks & mortar retailers it was easy to accelerate growth by opening a new store – online retailers need to master how to continue growth of their online stores, by both attracting new customers and retaining existing customers
Sources: The Drum (February 2014), Talk Business Magazine (December 2013),
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eCommerce platform / full solution providers landscape
Platform Providers Full Solution Providers
Provide fundamental eCommerce platform. Re-usable software that can be implemented by third
party or in-house developers
Use either third party or proprietary software as a starting point in delivering a fully functional online
store
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eCommerce agency landscape
Magento Hybris Demandware Other
Ag
en
cie
sA
gen
cie
s &
Syste
ms
Inte
gra
tors
Syste
ms
Inte
gra
tors
Agencies looking to move into ‘full solution provider’ landscape
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Contents
approach
1. Market overview
2. Case studies
3. M&A market
8
What do they do?
Establish a new eCommerce platform
• Developed and implemented solution architecture
• Brand• Creative• Technical strategies• Hybris platform – local
integration hubs, templates and merchandising configurations
• Harmonised digital presence, brand consistency to user experience and product representation
Results
• Roll out of platform in- US (April 2013)- Japan (September
2013)- UK (December 2013)
Platform
Example – Case study
Systems Integrator
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What do they do?
• Magento Gold Solution Partner
• Delivers Magento Enterprise platform but as a Summit Magento solution
- Summit delivers, maintains and hosts this platform
• Integrating back end systems (ERP) e.g. SAP, Navision, Axapta, Sage
• Digital marketing services
- SEO – ensure platform is SEO friendly- UX – optimise user experience and maximise
conversion through MVT, analytics and usability testing
• Provide advice and recommendations to improve platform every month
• Solution architects, developers and testers to improve functionality and performance of platform
• Clients
Platform
Service Offering
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Contents
approach
1. Market overview
2. Case studies
3. M&A market
Adtech
Adtech
2013 Global M&A Deals – Infographic
Geographical Split Subsector Split
Major Buyers
Other – 27 deals
By quarter
Deal type 1Q4
2
9
PE/VC backed deals
Cross border deals
South America0 deals
North America7deals
Africa0 deals
Western Europe6 deals
UK7 deals
Eastern Europe0 deals
Canada1 deal
Middle East0 deals
APAC9 deals
Q1
11
Q3
8
Q2
10
Social Media Agency
Total deals = 30
6
10
14
Marketing services
Digital media
22
eBay Yahoo
12
M&A market overviewDate Buyer
Country of Buyer
TargetCountry of Target
EV (£m)
EV/REVEV / EBIT
Target Description
Oct-13 RIESTER US Search-Werks US n.a. n.a. n.a.Full service eCommerce agency
Oct-13 UK UK 6* n.a. n.a. Digital solutions provider
Aug-13 Newgistics USTacit Knowledge
US n.a. n.a. n.a.eCommerce development and consulting services
Aug-13ICF International
USeCommerce Accelerator
US n.a. n.a. n.a.Multi channel eCommerce integrator
Aug-13Hirschen Group
Germany Tengelmann Germany n.a. n.a. n.a.Full service eCommerce agency
Jun-13 Otto Germany NetImpact Germany n.a. n.a. n.a.Digital agency that specialises in eCommerce
May-13 Accenture UK Acquity Group US 186 2.0x 16.6xFull service eCommerce agency
Aug-13 Publicis France Neev India n.a. n.a. n.a.Technology services provider in eCommerce
Mar-13 Seren UK BaoBaz UK n.a. n.a. n.a.Full service eCommerce agency
Mar-13 St Ives UK Amaze UK 15 1.2x 9.4xDigital marketing and technology agency
Mar-13 BiteDigital UK LoSource UK n.a. n.a. n.a.Magento team – specialists in Magento eCommerce platform
Jan-13 WPP US Salmon UK n.a. n.a. n.a. eCommerce digital agency
Nov-12 LbiThe Netherlands
Sceneric UK n.a. n.a. n.a.eCommerce consultancy and systems integrator
Sep-12 Navarre US SpeedFC US 43 1.1x 35.0x eCommerce service provider
Jun-12 GroupFMG US Pod1 US n.a. n.a. n.a.eCommerce website design & development agency
Jan-12Zeon Solutions
US Grand River US n.a. n.a. n.a. eCommerce development firm
Note:*Deal size rather than EVInitial consideration has been used to calculate EVEBIT is adjusted for exceptionals where appropriate
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News
PFSweb, an ecommerce solutions provider, looks to make both systems integrator and pure-play digital agency acquisitions
Webtise, an eCommerce agency is looking to acquire a specialist eCommerce digital agency to strengthen expertise in SEO, PPC, social media & conversion rate optimisation
Sources: The Business Desk (December 2013), Mergermarket (January 2014)