9. SHOP.CA Overview TECH15 Oct. 14 15
Transcription
9. SHOP.CA Overview TECH15 Oct. 14 15
TECH15 October 14th, 2015 CONFIDENTIAL | 1 Table of Contents ! Introduction ! Strategic Direction ! Strategic Partnerships CONFIDENTIAL | 2 INTRODUCTION CONFIDENTIAL | 3 Market Opportunity Significant Addressable Market Size Canadian Market Growth has 2 Unique “Rising Tides” eCommerce Globally ! Canada projected to be $35 billion in 2016 ! 10%+ CAGR over next five years ! Canadian eCommerce Under-Developed ! ! Canada = 4 to 6% of total retail Cross Border Shopping ! +/-50% of dollars spent online go to US sites ! Stronger USD keeping more dollars in Canada ! Projected to hit $1.9 trillion by 2016 ! Expected to grow by 53% over next 3 years No Canadian market leader exists CONFIDENTIAL | 4 Sources: StatsCan, eMarketer Marketplace :: Aggregate Merchants & Shoppers Merchants Shoppers Connecting Merchants & Shoppers Supplier World Unique IP to Support Multi-Merchant Product, Order Management, Inventory, and Pricing Engine Merchant Products ! ! ! ! Virtual Inventory Price & Promotion Brand Content Channel Control Demand ! ! ! ! Merchandising Single Cart Loyalty Customer Service Send Orders Ship Products ! Pick ! Pack ! Ship Get Orders Receive Product ! Receive Miles ! Write Reviews ! Share Experience ! Merchant of Record ! CRM & Repeat Charge Card Pay Merchant CONFIDENTIAL | 5 Multi-Merchant Marketplace For Canadian Consumers Premium Experience Inspired Discovery Online Inspirational Brands ! Segment Content & Product ! Focused Premium Audience ! Personalized Curation ! Efficient Mix of Luxury-Mass ! Bundles & Easy Subscriptions ! Fashion, Baby, Home & More For Merchants Merchants Customer Experience ! Relentless Commitment to WOW Every Engagement ! Free Shipping & Returns Marketplace-as-a-Service Offering ! Retailers ! Hardware, Software, Pipe ! Brand & Brand Aggregators ! eStore, Demand, Orders ! Distributors ! Customer Support & Loyalty Benefits ! Channel Control of Brand Experience & Price ! Known ROI via Post Order % Loyalty ! Aeroplan Premium Experience ! Share MORE, Earn MORE For SHOP.CA Business Model ! Virtual Inventory / No Capital ! Product Breadth & Drop Ship ! Post Order CONFIDENTIAL | 6 eCommerce Marketplace Importance in Global Landscape Globally, marketplaces are the most successful eCommerce model by sales, growth, profitability and valuation. ! These companies have proven it ! Asset light business model is more capital efficient ! Retailers looking to learn from marketplaces and increase the return on existing customer acquisition and loyalty, and push larger returns on capital ! U.S. Sears.com has run a marketplace for years, and now has over 110 million products on the Sears.com marketplace that it neither holds inventory nor has available for sale in the physical stores And Now… Marketplaces Are Changing the Canadian eCommerce Landscape The SHOP.CA Marketplace = Complete Accelerator and Defense ! ! Complete integrated platform of technology, unique IP, merchant onboarding, CRM and loyalty SHOP.CA’s existing Marketplace-as-a-Service breadth of premium merchants, product categories and brands is: ! ! An accelerator to any global marketplace, global retailer, or Canadian retailer A defensive/early mover position to capitalize on the investment SHOP.CA has made to establish Canada’s first marketplace CONFIDENTIAL | 7 Canadian eCommerce & Marketplace Landscape Company Launched July 2012 ! 27 Merchants ! 25 Product Categories ! 15 Million Products ! Canada’s 1st Marketplace Series A $27.4 million (Pre-Launch) Series B $31 million Launch Aeroplan partnership 500,000 Members 100 Merchants 700 Merchants $100,000 Day 2012 450% YoY Sales Growth 2013 1st Marketplace in Canada Launches Target Canada Opens 1st Store (no online) Series C $13.4 million 1 Million Members $1 Million Day 2014 Signs 1st China Based Merchant 2015 Target Announces Closing in Canada Best Buy & Future Shop Launch Drop Ship Industry Best Buy Closes 66 Future Shop Stores Rakuten Closes Canadian eReader & eBook Acquisition eBay Reports $1 Billion in Canadian Sales Amazon.ca Launches Fulfillment by Amazon in Canada Amazon.ca Reports $1.5 Billion in Canadian Sales Hudson’s Bay | Saks Deal Accelerates Canadian Luxury eCommerce Drop Ship Best Buy Announces Marketplace Canada Post Opens State-ofthe-Arte Vancouver Parcel Facility; Part of $1.7 billion Modernization Walmart.ca Drops Free Shipping CONFIDENTIAL | 8 Market Leadership Opportunity ! eCommerce in Canada has many ‘rising tides’ that support outsized growth for many years to come ! No Canadian market leader exists, yet SHOP.CA is the best positioned: ! ! Team and Expertise ! Growth in Customers, Repeats, Merchants, Merchandise, Profit Margin ! Platform and IP ! Merchant and Supply Network ! Strategic Partnerships ! Customer Demographic ! Focus ! Existing Investors As the leading Canadian pure play eCommerce/marketplace company, SHOP.CA offers investors excellent exposure within a fragmented market CONFIDENTIAL | 9 Marketplace-as-a-Service Technology Platform ! SHOP.CA has combined its own in-house proprietary technology with systems from world-class technology partners to develop SHOP.CA MaaS Technology Platform including SHOP.CA Supplier Word for MaaS Merchant Management ! SHOP.CA’s ability to integrate and deploy the combination of leading-edge eCommerce application and technology components and unique key differentiating solutions is a strong display of the team’s talent and expertise Storefront Marketing Campaigns CRM, Personalization Social Commerce StoreCREDIT Customer Care Campaign Social Loyalty Network LIVEmail EMM Supplier World Software Development Infrastructure & Integration Data Analytics Finance ImagePROCESSING CONFIDENTIAL | 10 Supplier World :: Enables the Marketplace Supplier Word ! SHOP.CA Platform to Connect Merchants to Store Front ! Data Integration for Product Catalog, Price, Inventory with Distributed Order Management Across Multi-Merchant Stores Product Price Inventory Orders ! Robust and Scalable Data Integration Layers with Flexible Technologies to Support Near-Real-Time Flows of Price, Inventory and Order Create, Fulfillment and Ship Notifications Merchant Data Integration ! Merchant User Web-Based Application to Manage All Aspects of Product Catalog, Price, Inventory, and Order Management; right down to Packing Slip Printing if Required. Merchants 800+ Merchants 800+ Merchants 800+ Merchants ! Dedicated Team at SHOP.CA Marketplace Operation Team & Merchant Onboarding Methodology and Daily Operations Management and Supported Wiki Site ! Merchant Reporting & Dashboard for Performance and SLAs ! Product Video Creation by SHOP.CA to Increase Conversion, and Content Tuning for SEO and On-Site Search Optimization ! SHOP.CA Merchandising Team, CRM Team and Marketing Team Dedicated to Merchant SHOP.CA’s World Class IP and Enterprise Global Scale Via Unique Intellectual Property = “Supplier World” CONFIDENTIAL | 11 2015 Key Performance Indicators 9-mths YTD vs PY Visits +1% Conversion +38% Orders +33% AOV +10% Sales :: In-cart +47% Product Margin $ +50% Product Margin % +3% New Members 157K; +36% CONFIDENTIAL | 12 STRATEGIC DIRECTION CONFIDENTIAL | 13 Continue Re-positioning to Premium Market Position Luxury Premium Exclusive Mass Outlet Clearance Wide Selection Narrow Selection Product & Category Selection CONFIDENTIAL | 14 Premium Brands on SHOP.CA CONFIDENTIAL | 15 2015 Initiatives :: Inspired Discovery Transformation to Premium with Inspired Discovery ! More Premium User Experiences & Features ! More Premium Brands, Products and Content ! Responsive Design to Enable Premium Tablet/Mobile ! New SHOP.CA Site Launch | Premium Look-n-Feel ! New Mobile App for iOS and Android ! New Data Analytics and Business Insights ! Enhanced Merchant Alerts and Reporting/Dashboards ! New Social Commerce and User Generated Content ! New Member Sign-Up Experience ! New SHOP.CA Local Pilot including Scheduled Delivery Merchandised Buying Guides Fashion Inspiration Look Books of Local Merchant Products (Grocery, Wine, more) ! B2B Bundling User Experiences Inspire Customers to Discover the Convenience, Quality and Benefits of SHOP.CA CONFIDENTIAL | 16 Customer Base is Highly Affluent; Maturing Stage in Life ! Average customer age of 35-49 ! Families with children at home ! Above average ethnic diversity ! Above average household income of > $96,000 ! 28% of SHOP.CA customers have annual household income above $100K, compared to ~19% of Canadian population $100K+ 27.6% <$50K 37.2% $50K $100K 35.1% Tend to be homeowners, primarily dwelling in single detached homes ! Customer Base by Household Income Customer Base by Age Higher than average home value of $450,000 65+ 13.2% 50 - 64 19.7% 20 - 34 21.7% 35 - 49 22.3% CONFIDENTIAL | 17 Product Category Performance 2014 Sales Top 4 Leaders = 74% of Sales: 24% 26% ! Home ! Family/Baby ! Fashion ! Electronics 2015 Premium Focus on: 6% 24% 20% Electronics Home Fashion Baby ! Home ! Family/Baby ! Fashion Other CONFIDENTIAL | 18 SHOP.CA Business Insights & Data Analytics Business Insights & Data Analytics ! Cohort Analysis ! Media & Campaign Efficiency ! Channel ! Member Life-Time-Value ! Brand and Product Profitability Campaign Management ! Campaign Setup ! Offering Definitions ! Segmentations ! Multi-Wave Campaigns for New Members, Repeat Members and Onboarding Strategies LTV Cohort Analysis Experience ONE (Unica) Exact Target Salesforce.com Coremetrics WCS Media & Marketing Costs Google AdWords ZenDesk GoodData eBay PepperJam Bazaarvoice Share-IN (StoryBox) Data-Mart Google Analytics Supplier World NetSuite Social Integration Layer Aeroplan Rich Relevance Data Sources Enhanced BI & Analytics will Empower Greater Personalization for Customers CONFIDENTIAL | 19 SHOP.CA Margin Opportunities Gross Margin Opportunities Merchandise higher margin categories ‘Launch’ Supplier Agreements rolling off Acquire customers that shop in higher margin categories Listing fees for merchants Merchant funded ‘miles’ Shipping Policies Exclusive inventory to Canada Service businesses EBITDA Margin Opportunities Increase repeat, lower overall CPO Constant cost containment CONFIDENTIAL | 20 STRATEGIC PARTNERSHIPS CONFIDENTIAL | 21 Customized Marketing Value Unique Access to Canadians ! ! ! ! ! 4.8 Million Aeroplan Members 800,000 TD | Aeroplan Members 400,000 AMEX | Members 3.2 Million Shaw Subscribers Other Partnerships Include: CONFIDENTIAL | 22 Exclusive Strategic Alliance ! SHOP.CA launched an exclusive loyalty partnership with Aeroplan on May 2014 ! Aeroplan acquires customers for SHOP.CA, and SHOP.CA offers these customers ‘Aeroplan Miles’ on purchases ! AIMIA, parent company of Aeroplan, is a global leader in loyalty management ! Beyond Aeroplan, AIMIA has 30+ million loyalty customers worldwide Products Platform Innovation Branding Customers New Partnership is Performing Very Well ! Gross Margins and Average Order Value Up Dramatically Since Launch of Aeroplan Partnership in May 2014 ! ! Gross profit up 590% YoY in 2015 Q1, Aeroplan Customer AOV LTD is $238 Very strong over-penetration of high value, high AOV Distinction members (35% of member customers since launch vs. 15% for general Aeroplan base) CONFIDENTIAL | 23 Exclusive Partnership with Aeroplan Drives Growth and Retention SHOP.CA’s Aeroplan partnership provides access to one of Canada’s most desirable customer bases, while helping to increase repeat behaviour. Gross Margin Before / A0er Aeroplan % of Net Revenue Pre-Aeroplan • SHOP.CA launched an exclusive loyalty partnership with Aeroplan in May 2014 • Aeroplan = Customer acquisition & retention • The Aeroplan partnership has been a resounding success for SHOP.CA • Gross Margins and Average Order Value have risen dramatically since launch of partnershi • Gross Margin up 460 bps and AOV up $68 since inception • Aeroplan members tend to spend more online, on premium, high margin merchandise • Very strong over-penetration of high value, high AOV Aeroplan Distinction members (31% of member customers since launch vs. 15% for general Aeroplan base) Post-Aeroplan 11.2% 6.6% Jan 13 -‐ Apr 14 May 14 -‐ May 15 AOV Before / After Aeroplan Pre-Aeroplan C$ Post-Aeroplan $199 $131 Jan 13 -‐ Apr 14 May 14 -‐ May 15 % of Active Members Who Have Repeated in Last 12 Months Before / After Aeroplan % of Active Customers Pre-Aeroplan 27.5% Apr 14 Post-Aeroplan 36.1% May 15 CONFIDENTIAL | 24 Shaw :: Investor & Strategic Partner ! Shaw Communications is one of Canada’s largest telecommunications & media companies and they participated in SHOP.CA’s Series B & C capital raises ! SHOP.CA works closely with Shaw on many strategic initiatives in television and beyond ! Future opportunities include: ! Mobile apps, and possible interactive TV commerce ! Monthly subscription services to Shaw’s 3.2 million customers (home care bundles, pet care bundles, beauty kits, baby care) Products Platform Innovation Television Ad Partner Online/App Partner Interactive TV CONFIDENTIAL | 25 SUMMARY ! One of Canada’s Largest eCommerce Destinations and Fastest Growing Retailers ! Strong Fundamental eCommerce Opportunity in Canada ! Exclusive Partnership with Aeroplan Drives Growth and Customer Retention ! Young and Affluent Customer Base ! Premium Product Offering Enabled by Broad Network of Merchants ! Powerful Technology Platform, Intellectual Property & Data Analytics ! Wide Customer Reach Through Unique Marketing Partnerships ! Significant Incremental Growth Opportunities Available ! Experienced Management Team of Technology, Media, and eCommerce Professionals Canada’s First Multi-Merchant Multi-category Marketplace…..and only Pure-Play CONFIDENTIAL | 26 Thank You CONFIDENTIAL | 27