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Canadian eCommerce Marketplace Opportunity & Challenges

Christian Rodericks, founding partner & vp marketplace operationsSHOP.CAchristian@shop.ca@rawdrix

September 22, 2014

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So, what is Wrong with Canada?

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What is Wrong w/Canada – ?!?

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What is Right w/Canada – Huh?

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What is Right w/Canada – Now we’re talking!

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To Start - We Noticed A Whole Bunch of Right!

eCommerce Globally

Projected to hit $1.9 trillion by 2016Expected to grow by 53% over next 3 years

Significant Addressable Market Size

Canada projected to be $38 billion in 201710%+ CAGR over next 5 years

Canadian Market Growth has 2 Unique

“Rising Tides”

A shift to online :: Canada = ~4% of total retail USA = 8% in 2012UK = 25% in 2014Ger = 11% in 2014

Cross Border Shopping+/-50% of dollars spent online go to US sites

Canadian eCommerce is one of the fastest growing segments of the Canadian economyNo Canadian market leader exists

1

2

3

Sources: StatsCan, eMarketer

2012 2013 2014 2015 2016 2017-0.5%

0.5%

1.5%

2.5%

3.5%

4.5%

5.5%

6.5%

7.5%

$-

$5

$10

$15

$20

$25

$30

$35

$40

$45

$18.36

$21.61

$25.37

$29.63

$34.04

$38.74

eMarketer Retail eCommece Sales in Canada 2012-2017 and % of Total Retail Sales

Retail eCommerce % of Total Retail Sale

% o

f Ret

ail

Billi

ns C

DN

$s

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What makes us unique?

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Multi-Merchant Marketplace?

One Stop SHOPOne Cart/Check-Out

Online Shopping Mall

Relentless FocusFree Shipping & Returns

Customer Experience

Social SharingShare MORE = Earn MORE

Earn Miles

Mix/Match 5,000+ Brands29 Categories

Your Favorite Brands

Consumers

Merchants

Marketplace-as-a-Service (MaaS) Supplier World – P, P, I, OMCost Per Order – Know ROI

Retailers, Manufacturers,

Distributors

MMM Business Model

5+ Million Products$10 Billion in InventoryCoast-to-Coast Reach

Virtual Inventory

No InventoryNo WarehouseNo Pick-Pack-n-Ship

Drop-Ship as MOR

Leverage and ScaleMinimize Cost Per AcquisitionMaximize Repeat customers

Lifetime Value of a Customer

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With Selection, Service and RewardsMassive Product

SelectionVirtual Inventory of Millions of Shippable Products

Leading Loyalty Program

Domain Expertise & Capital Efficiency

Proven Partnership

Abilities 600+ Merchant Partners and Counting

5 Year Exclusive Strategic Alliance with Aeroplan

Strong Talent and Expertise

RapidlyGrowing

+1,200% 2013 vs. 2012+370% 2014 YTD

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But…Managing 600+ DCs isn’t easy!

Supply and Demand UncertaintySupply Chain DisruptionsUnsteady Supplier PerformanceSupplier Cancelled Orders

Customer Loyalty & Retention at riskCost per acquisition > Cost per repeat

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Managing the chaos

Frequent inventory updates

Carve-out inventory (by brand or category)

Inventory Buffers

Regressive and Predictive Analytics

Subscriptions – Accurately measure demand

Service Level Agreements – Monitor and Enforce

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SLAs Drive Customer Loyalty

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Strategies for Joining Marketplaces

Test a new brand or product line – pilot demand before a big buy

White Label - Avoid channel conflicts

Test price elasticity – change in demand quantity / change in price

Clear older product styles

Additional revenue channels (More ore less than SEM)

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At the end of the day….

Deliver a customer experience that drives repeat business through

Great Products

Unmatched Service and

Best in Class Loyalty

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THANKS !!!!