David vs. GoliathAn eCommerce StoryOnline Merchants vs. Brick & Mortar

Stores

David vs. GoliathAn eCommerce

Story

Showrooming

Online Merchants

Brick & Mortar Stores

vs.

David vs. GoliathAn eCommerce

Story

Showrooming

Overview• Who is Vendio and Harry?• What is “Showrooming”?• Why Should I Like It?• How Do I Win?

• Thank You to our mobile partner

Vendio, SingleFeed & Me• Vendio helps businesses grow and be more

efficient selling through multiple channels– Vendio is on the side of the merchant—Always– Marketplaces consider buyers to be their customers,

and they make the rules

• SingleFeed helps businesses be found by purchase-ready shoppers anywhere on the web– Data feed management for Shopping Engines– Google Shopping, Shopzilla, Buy.com… Many More…

• I stand with the Underdogs– Former Navy fighter pilot– One person with the right equipment can cover a lot

of ground and do a lot of damage

Shopping While Shopping

• Shelves in stores are just a showroom– Store to: Touch, feel, size up, try on

• The purchases happen all over the place– Web for: More info than what’s on the packaging,

more than what the clerk can tell them

• Go online while in the store• Take pictures, Scan QR codes• Look at more pictures, reviews• Compare price, Find coupons/deals• Maybe they buy at the store…

Often not!

Like, Everywhere

You’re All 4 Inches Tall

• On a smartphone everybody is the same size

• An online merchant's emporium gets the same “real estate” as Walmart or Target– The same size screen on a smartphone or tablet

• Real estate used to be the weapon of choice for the Big Box stores– Now physical stores can be a liability

“There’s An App For That…”• Actually, there are THOUSANDS of shopping

applications

Statistics and Demographics

Smartphone adoption and e-commerce acceptance

among consumers has driven the showrooming trend.

• Younger, affluent male shoppers.

• “Big ticket” items, clothing and footwear are the most common product categories for showroomers.

• The number of smartphone owners who use their devices to showroom has increased from 15% in 2009 to 59% in 2011.

1 OUT OF EVERY 4VISITORS TO RETAIL

WEBSITES ON BLACK FRIDAY

CAME FROM A MOBILE DEVICE!

Source: IBM’s 2012 Holiday Benchmark Report. 24% of all traffic to US retail websites came from mobile devices

Black Friday Is “Mobile Friday”

What’s In It for Shoppers?Everything

Shoppers are becoming “channel agnostic” and are more concerned about price and convenience.

Showrooming allows shoppers to look at or try on an item, mull over the purchase, and buy when and where they want.

Other benefits include:• Access to product experts• Access to detailed product information• Product reviews, and advice from friends• Ordering out-of-stock items online• Sales tax can sometimes be avoided• Bulky or heavy items can be delivered

The Online Merchant's Weapon

In the battle between larger brick & mortar retailers and smaller online businesses, showrooming levels the playing field.

• Smaller businesses don’t generally get volume discounts offered to larger retailers, but online-only merchants have much lower overhead costs and can compete on price

• Online merchants should optimize their website for SEO so their items can be readily found

• They should provide a clean mobile shopping experience that offers convenience, customer friendly policies, and relevant and timely content.

Strategies to Leverage Showrooming

• Use Google Product Listing Ads strategically• Ensure your website is truly mobile-friendly• Provide excellent and accessible customer service• Offer low-cost shipping and a liberal returns policy• Offer free return shipping (customers rarely use this)• Offer expedited shipping• Provide product reviews and buyer feedback• Use videos to show product details• Maintain a blog to offer product insights and information• Use social media such as Facebook and Twitter to build

relationships• Offer product bundles with value-added and unique items• Provide discounts applied during checkout (avoid MAP

restrictions)

Brick & Mortar Retailers Fight Back

25% of showroomers intended to make in-store purchases before shopping online (survey data)

Petco’s “best defense” is puppies.

“Anybody who comes in with the intent of showrooming, when they look into that puppy's eyes, they're not showrooming anymore.” Petco’s CIO

Brick & Mortar Retailers Fight Back

Other anti-showrooming tactics brick & mortar retailers

are using:

• Creating private label brands• Providing more knowledgeable in-store representatives• Creating in-store apps that help provide an extra level of

service• Offering portable POS systems to avoid checkout lines• Offering in-store pickups• Price-matching• Creating an enjoyable shopping environment

Who Will Win?

Consumers win in the eCommerce battle, but that doesn’t mean you lose.

Online retailers and brick and mortar stores each have advantages they can leverage. – Smaller online merchants are more agile and have less

overhead– Larger retailers have bigger budgets and brand

recognition.

In the end, there is room in the market for every type of business - as long as they keep on top of market trends, embrace new technology, and rapidly adapt to changes.

Contacts

Harry Hirschman

Vendio Marketing, Sales & Customer Support650-293-3500

650-619-5108 mobileHarry.Hirschman@corp.Vendio.com

www.vendio.com

Confidential

North American eCommerce Growing

• >$500BB by 2015; 10% CAGR

• As online steals share

1/8/2013 Slide 19Current Status

GOOGLE’S GAME CHANGER: THEY RECOGNIZE THE MOBILE OPPORTUNITY

SEND YOUR MOBILE SHOPPERS TO MOBILE-OPTIMIZED SITESOR SHOW UP LOWER IN SEARCH RESULTS!

- Google to its advertisers – September 2011

WHY GOOGLE ACTED: NON-OPTIMIZED SITES DON’T CONVERT

NON-MOBILE-OPTIMIZED SITE MOBILE-OPTIMIZED MSTORE

CONVERSION RATES:

VS

≈ 0.3% (AVERAGE) 1% TO 3% (AVERAGE)

BUT… GOING MOBILE IS HARD TO DO!

YOU MUST CONSIDER:• DESIGN & FUNCTIONALITY: Need to build for unique behaviors of mobile shoppers• VERSIONING: Adjust for constantly changing handsets, screens, browsers, interfaces, etc.• IT: Building in-house requires skills and availability most retailers just don’t have• BUDGET & TIME: Current solutions require significant investment and 3 to 6 months• MARKETING: Without marketing tools, few will find your mobile store

NEW MSTORE DESIGN NOW AVAILABLE