A look at Digital Transformation trends and a deep dive into Marketplaces and how retailers can balance a direct and marketplace channel

1. Confidential
Digital Transformation &
Marketplaces update
Luke Hilton - Online Strategy Director
The Playhouse Group Pty Ltd

2. ABOUT PLAYHOUSE
The Playhouse Group is a website development, integration and digital strategy company.
With our strong "bricks and mortar" background, coupled with our experience of delivering
over 100 digital and eCommerce projects, we understand how to provide successful web
solutions.
Established in November 2009 in partnership with ex-Woolworth's colleagues, Luke Hilton
and Luke Goldsworthy, Playhouse has grown to be a leader in strategy and implementation
of all things digital.
We plan and implement strategies to ensure our clients businesses are in a better position
to anticipate and respond to rapid changes in customer behaviour, new technologies and
the competitive market. The Playhouse Group takes pride in educating our clients in the
process of delivering the project and how to achieve results in the ever growing digital and
online world.

3. LUKE
GOLDSWORTHY
LUKE
HILTON
OUR EXPERTISE
The 2 Luke’s have over 30 years’ experience in
retail, across Australia, New Zealand, India, Asia
Pacific and Europe. Their passion for retail has
seen them lead teams (offline and online) for
Australian businesses at Woolworths, Dick Smith,
and David Jones to name a few.
Coupled with industry leading knowledge of
eCommerce, Analytics, CRM, Integration and
Email Marketing platforms/systems, ensures the
Playhouse Group has the required understanding
to transform your eCommerce offering.

4. Pragmatic Digital Transformation 2019

5. Pragmatic Transformation
The reality is your favourite retailers, brands
and competitors are on their 3rd or 4th
rendition of digital commerce.

6. Pragmatic Transformation
Forrester is saying as many as 25% of
organisations are going to decelerate their
digital spend as they think they're done or
afraid of the economic headwinds.

7. Pragmatic Transformation
The top 15% of companies are investing more.
They continue to be customer-obsessed,
optimising their processes, building on
modern scalable architecture and hiring the
right people.

8. Survey of Global
Retail CIO’s and their
2019 priorities
1. Digital
2. Revenue/Business Growth
3. Customer Experience
4. Operational Excellence
5. Cost Optimisation/Reduction
Source: Internet Retailer Retailer/Global E-Commerce Forum survey, April-June 2018

9. The continued rise of the Marketplace 2019

10. Why
Are Marketplaces right for me and my brand?

11. Market (place) update
In 2018
1.66T
worth of goods sold on the
largest global marketplaces
Marketplaces account for
more than
50%
of global online retail sales
Marketplace sales grew
20%
in 2018
Source: Internet Retailer 2019 ONLINE MARKETPLACES REPORT

12. Top International
Online Marketplaces
01 | Amazon 75.6%
02 | eBay 29.3%
03 | Tmall 26.8%
04 | JD.com 17.1%
05 | Marcado Libre 17.1%
Source: Internet Retailer Retailer/Global E-Commerce Forum survey, April-June 2018

13. Amazon by the
numbers
375 million products
2 million marketplace sellers (over 10k in AU)
300,000 U.S. based sellers joined in 2017
$320 billion global GMV
100 million Prime members
Source: Internet Retailer Retailer/Global E-Commerce Forum survey, April-June 2018

14. The rise of Marketplaces
Half the global spending on marketplaces is
on shopping portals operated by Alibaba.
Chinese consumers purchased roughly
768 billion worth of goods on Tmall.com and
Taobao.com.

16. Marketplaces
The big question is how should
Marketplaces fit into your wider retail
strategy?

17. Why customers are shopping on a Marketplace
0
1
“I found a lower price on an
international retailer on a
regional marketplace”
0
2
0
3
“I want something unique not
found in a regional store”
“The brands or products I like
are not available regionally”
“The price is better
internationally”

18. We are driving significant sale, but…
1
Many organisations rely on online
marketplaces to drive significant
sales, but its hard to build your
brand when side by side with your
competitors.
2 When you sell across multiple
marketplaces you will be spending a
lot of time on admin as each
marketplace has specific
requirements for content
description and data formats.
3
The number of marketplaces has
grown significantly so it can be
confusing who to align with
especially when looking to grow
your brand internationally.
4 Many organisations don’t have a
clear playbook on how to balance
direct channels and marketplaces in
order to optimise growth and
customer engagement.
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

19. What retailers are saying...
5
Retailers don’t own the customer.
This is owned by the Marketplace
where the customer is buying.
6 Positioning on multiple
Marketplaces can mean highly
manual operations due to
integration challenges with backend
systems.
7
If your logistics and fulfillment
model is not optimised for direct
then this will be exacerbated with
Marketplaces.
8 Marketplaces cut into sellers
margins. Average sellers pay
between 15% and 20% on Amazon
and 2% and 5% on Tmall.
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

20. Marketplace
recommendations

21. Be mindful of the pro’s
and con’s of Direct vs
Marketplaces
01
Find the balance between Direct vs Marketplaces. Your
Digital Strategy should include both, but ensure you
understand the investment and control you will have and plan
your roadmap accordingly.
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

22. Product range
02
Place premium and newer products in direct channels, and
products that entice large volumes of shoppers on
marketplaces.
Marketplace: Most popular, off season, clearance.
Direct: Premium, newer products, bundles, exclusives.
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

23. Leverage the marketing
opportunities
03
Take advantage of major promotional days to drive traffic to
direct channels.
● Singles Day
● Prime Day (local)
● Cyber Monday
● Black Friday
● ClickFrenzy (local)
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019
QUICK TIP
Load testing and
understanding you
platform/fulfillment
breakpoints are a MUST.

24. Follow up and acquire
04
Follow up with you marketplace purchasers directing them to
your direct channels for:
● updating packaging with direct channel hooks
● more content and value-added services
● creating ratings & reviews
● subscription to email and social media pages
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

25. Use technology to
streamline
management
05
Use marketplace integration applications to ease the
management of multiple marketplaces and integrate to
back-end systems.
Source: Gartner - Balance Marketplaces and Direct Channels for Digital Commerce Growth and Customer Engagement 18/01/2019

26. Use a Marketplace to
grow your brand in
another regions
06
Story: You are an Australia based manufacturer and retailer
with aspirations to grow sales in North America.
Services like Fulfillment by Amazon (FBA) allow you to store
your products in Amazon's fulfillment centers, and they pick,
pack, ship, and provide customer service for these products.
Test and trial new regions and then look at investing further.

27. Questions/Next Steps
luke.hilton@theplayhousegroup.com
0423 107 780
www.theplayhousegroup.com
Playhouse website
image

28. Thank you.