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THE BUSINESS OF OMNI-CHANNEL RETAIL

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Presentation on theme: "THE BUSINESS OF OMNI-CHANNEL RETAIL"— Presentation transcript:

1 THE BUSINESS OF OMNI-CHANNEL RETAIL
Our tagline is “Infinite Retail Power” and it reflects a commitment and creation of value focused on perfecting the power of trading partner relationships. In today’s rapidly changing marketplace, we see omni-channel retailing presenting our customers with a tremendous opportunity, and one where we’re uniquely positioned to help them realize this opportunity.

2 SPS Commerce (NASDAQ: SPSC)
Headquartered in Minneapolis, MN 100% retail enterprise cloud services 50 consecutive quarters of growth Profitable, strong balance sheet Retail industry’s largest network 2,000 Retailers, 50,000 Suppliers, 1,000’s of 3PLs, Carriers, Factories SPS Commerce Confidential Information

3 Historically, consumers have found themselves between retailers and their suppliers.
With both exerting significant influence over a consumer who had little influence on the nature of that relationship. And where the business processes of retailing were designed to meet the needs of the retailer and their suppliers.

4 But in today’s market, that consumer has gone digital, and along the way the balance of influence has dramatically shifted. It’s now the consumer who is shaping the business processes of retailing. The balance of influence has clearly shifted to a consumer-driven marketplace.

5 $83,000,000,000 68% 29% 13,000,000,000 Some key figures can drive these points home: -$83B = the total revenue Apple has generated from iPad sales – a business that did not exist four years ago -68% = the share of Apple’s revenue from iPhones and iPads – two products that didn’t exist six years ago. 29% = Window’s share of the worldwide computing device market – down from 95% a decade ago 13B = the number of daily API calls Twitter gets – illustrating application integration on a staggering scale 5

6 In today’s Omni-Channel marketplace, where the digital consumer is driving the tempo of change in the marketplace, we’re rapidly moved from a market where three experiences need to be crafted into a single, seamless experience.

7 OMNI-CHANNEL FUNDAMENTALS
Item Management Adaptability Sell-Thru Velocity Item Sourcing Frictionless Scale From our perspective in retail – with the largest network in the market – we see Omni-Channel as being comprised of four key components: -Adaptability in how items are managed, to embrace the fluid nature of what is required to convince a consumer to buy, and to fulfill that purchase -Increasing the velocity of item sell-thru, ensuring you always have the right product where demand is highest for it -Access to large quantities of new items, to ensure you’re able to anticipate and respond to rapidly changing consumer tastes -In concert this enables frictionless scale. The ability for retailers and consumers to rapidly, easily expand and adapt their businesses

8 AGENDA - MORNING 9:00-9:50 am Omni-Channel Retail: A view from the front Paula Rosenblum, RSR Research 10:00-10:50 am Leaving the Catalog Behind Bill Gratke, Lamps Plus Sanjay Parthasarathy, Indix Mike Lapchick, Shotfarm 11:00-11:50 am Where is the customer and what are they buying? Michelle Landis, UnderArmor 12-1p Lunch 8

9 AGENDA - AFTERNOON 1:00-1:50pm The Key to Infinite Aisle Success
Justin Stevens, Quirky Jim Sustar, Trademark Global 2:00-2:50pm Why Drop-Ship Changes Everything, and Nothing Tanya Tremoulet, SOG Knives Mark Hopkins, Skullcandy Chad Collins, Accellos

10 PAULA ROSENBLUM RSR RESEARCH
Omni-Channel Retail: A view from the front Paula is widely recognized as one of the top analysts in the retail industry. She formerly served as Vice President of Research & Content at Retail Systems Alert Group (RSAG), and as Vice President of Aberdeen Group’s Retail Research practice. She was also retail research director for AMR Research. Previous to that, Paula spent over 20 years as a retail technology executive and CIO. 

11 AGENDA - MORNING 9;00-9:50 am Omni-Channel Retail: A view from the front Paula Rosenblum, RSR Research 10:00-10:50 am Leaving the Catalog Behind Bill Gratke, Lamps Plus Sanjay Parthasarathy, Indix Mike Lapchick, Shotfarm 11:00-11:50 am Where is the customer and what are they buying? Michelle Landis, UnderArmor 12-1p Lunch 11

12 AGENDA - AFTERNOON 1:00-1:50pm The Key to Infinite Aisle Success
Justin Stevens, Quirky Jim Sustar, Trademark Global 2:00-2:50pm Why Drop-Ship Changes Everything, and Nothing Tanya Tremoulet, SOG Knives Mark Hopkins, Skullcandy Chad Collins, Accellos 12

13 THE BUSINESS OF OMNI-CHANNEL RETAIL
Our tagline is “Infinite Retail Power” and it reflects a commitment and creation of value focused on perfecting the power of trading partner relationships. In today’s rapidly changing marketplace, we see omni-channel retailing presenting our customers with a tremendous opportunity, and one where we’re uniquely positioned to help them realize this opportunity.

14 APPENDIX 14

15 KEY CHALLENGE(S) “(In 2012) Amazon posted Web sales of $61 billion, compared to an estimated $7.7 billion for WalMart” -WSJ, June 18, 2013 And it’s more important than ever that retailers and suppliers craft differentiated experiences for their customers: -You can’t beat Amazon in broad ecommerce – they’ve won that. And they’re so far down the experience curve - doing 8x the ecommerce WalMart does – that they will stay in the lead. -You can take advantage of the growing role digital commerce plays in retail to offer compelling experiences across the wide range of methods your customers engage with you.

16 TODAY’S MARKET Change is the new normal Small becomes big, fast
Pace is quickening We’re now in a market where business processes need to be capable of supporting constant change Where small changes in preferences can create large scale shifts in demand And we’re in an environment where the pace of change is increasing

17 DIRECTIONAL INDICATORS
MOBILE CONSUMERS FRICTION REDUCTION, EVERYWHERE SOCIAL…EVERYTHING And you only need to look at a few directional indicators to see how significant this new environment is to retailing. Mobile consumers are changing “ecommerce” to “digital commerce” And where advances in technology are reducing the friction to bring new capabilities to market are diminishing Social is rapidly becoming an attribute of how consumers shop, and how businesses engage with consumers. 17

18 OMNI-CHANNEL FUNDAMENTALS
Item Management Adaptability Item Sell-Thru Velocity Item Sourcing Frictionless Scale From our perspective in retail – with the largest network in the market – we see Omni-Channel as being comprised of four key components: -Adaptability in how items are managed, to embrace the fluid nature of what is required to convince a consumer to buy, and to fulfill that purchase -Increasing the velocity of item sell-thru, ensuring you always have the right product where demand is highest for it -Access to large quantities of new items, to ensure you’re able to anticipate and respond to rapidly changing consumer tastes -In concert this enables frictionless scale. The ability for retailers and consumers to rapidly, easily expand and adapt their businesses

19 In today’s Omni-Channel marketplace, where the digital consumer is driving the tempo of change in the marketplace, we’re rapidly moved from a market where three experiences need to be crafted into a single, seamless experience.

20 And when that digital consumer become social, that influence becomes even more pronounced.
They now expect that no matter where or how they shop, they/re met with a consistent experience, and meet their rising expectations.

21 Manufacturers, Distributors
ONE CONNECTION ERP Complete Cloud-based Integration to 10,000’s Of trading partners RSX = RETAIL STANDARD XML The standard for trading partner integration Retailers Suppliers, vendors, Manufacturers, Distributors The SPS Universal Network is the industry's first true single connection architecture, made possible by our standard, Retail Standard XML (RSX)

22 ITEM MANAGEMENT Hundreds of attributes E-commerce readiness
Retail, ordering, logistics, pricing & more E-commerce readiness Marketing content Image, digital asset management Inventory information Current & future quantity Location Quality item information Strong e-commerce presence Increased consumer sales Our approach to item management is uniquely architected for the requirements of a digital-commerce driven marketplace, enabling rapid adaptation to the changing attribute landscape.

23 ITEM SELL-THROUGH Enable responsive sell-through performance, by location Collaboration between retailers and suppliers Visibility enables successful customer experiences Our Point-of-Sale analytics service provides insight and visibility into consumer demand and inventory, putting retailers and suppliers on a collaborative footing to have the right product in front of the consumer at the time of purchase.

24 ITEM SOURCING Endless-aisle retail = exponential item growth
Annual SKU growth of % Customers “expect” two day delivery Reliance on drop ship due to capex limitations Traditional retailer sourcing & merchandising practices do not scale And through RetailUniverse, we’ve developed the largest item sourcing network in retail, with millions of items available from suppliers that retailers can easily access and provision for sale


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