![CONFIDENTIAL
38
Personalization is of current paramount importance
“The bottom line is that if you can't identify customers
through the interaction channels, you can't engage with
them in a meaningful way… Businesses must integrate
their customer relationship management (CRM) systems
with data sources from other customer touchpoints, [and]
need to consider new approaches and programs that
will enable them to capture additional customer
behavior information that will provide deeper insights”
-Brian Chung, Head of Global Solutions
Marketing, SAP
“Personalization is helping us build relationships with our
customers that translate into increased engagement,
loyalty and revenue.”
- Simon Pritchard, Group Digital Director,
Arcadia
“59% of shoppers who have experienced personalization
believe it has a noticeable influence on purchasing.”
-Rethinking Retail, Infosys
“77% of consumers have chosen, recommended, or paid
more for a brand that provides a personalized
experience.”
- Forrester Research
“In 2017, personalization will continue to drive customer
engagement for retailers….it will empower sales
associates to build stronger connections, increased
brand trust, and loyalty.”
- Oscar Sachs, CEO, Salesfloor
“70% of retailers cited personalization of the customer
experience as a leading customer engagement priority
for 2017.”
- Boston Retail Partners 2017 Customer
Engagement Survey
“In-store shopping is far from dead — but it does have to
change to keep up with the trends. Instead of telling
customers how, when and where to shop, retail stores are
catering to their customers’ individual shopping
requirements — the shopper is in charge, and retailers
must adapt.”
Gary Ambrosino, CEO, TimeTrade
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Guide to NRF Jan 2018
- 1. CONFIDENTIALCONFIDENTIAL STRICTLY PRIVATE & CONFIDENTIAL ComCap discussion materials for NRF January 2018 Draft All securities transactions are offered by and conducted through ComCap LLC, a broker-dealer registered with the SEC, and a member of FINRA and SIPC. This communication is for information purposes only and should not be regarded as a solicitation or offer to buy or sell any security or financial instrument and any email received with instructions to purchase or sell securities will not be acted upon. Pursuant to SEC and FINRA regulations, all incoming and outgoing email of persons associated with the broker-dealer are subject to review by the firm’s compliance administrators, principals, and its regulatory agencies. STRICTLY PRIVATE & CONFIDENTIAL
- 2. CONFIDENTIAL Welcome to NRF 2018! ▪ NRF provides an unprecedented platform to network with CEOs and executives of early stage companies, technology providers, commerce disruptors, and established retailers and brands. ▪ With a plethora of investors present, this is prime time to network in support of fundraising efforts, and meet with larger and smaller strategic industry players that can help you to achieve your strategic objectives. ▪ ComCap is a premier boutique investment bank focused on the intersection of commerce and capital, with key subsectors including B2C ecommerce, B2B SaaS, B2B services for retail (IT and marketing services, fulfillment and logistics and call center), payments, mobile commerce and marketplaces. ▪ With offices in San Francisco, Europe, and Asia, our firm works with mid-cap public companies on buy-side initiatives and public and private growth companies on financing and strategic M&A. ▪ In addition to being the only boutique focused on disruptive commerce models, we differentiate by bringing bulge bracket techniques to emerging models, a strong and uncommon buy-side/strategy practice, deep understanding of industry drivers and synergy analyses, deep relationships across the sector and worldwide coverage with closed transactions in the US, Japan, China, ASEAN region, Western and Eastern Europe and Latin America. ▪ We hope this deck is helpful to you to summarize the landscape and learn more about the players present at the conference. ▪ If you’d like to meet to discuss your strategic initiatives or if you would like to submit an addition for this package, please contact the team: 2 Aron Bohlig Managing Partner M: +1 415-235-8270 E: aron@comcapllc.com Steve Terry Managing Director M: +1 415-971-3794 E: steve@comcapllc.com Collin Rice Associate M: 612-578-7512 E: collin@comcapllc.com Fermin Caro Director M: +1 650-743-7825 E: fermin@comcapllc.com Chris Nealey Analyst M: 949-887-3846 E: chrisn@comcapllc.com Swetha Vijay Director M: +65 9326-4726 E: swetha@comcapllc.com Carlos Gonzalez Director M: +7 915-413-1911 E: carlos@comcapllc.com
- 3. CONFIDENTIAL ComCap’s current thematic focus areas 3 Theme Description Select companies Analytics & AI Focus on disruptors in the analytics space focused on ecommerce, logistics, retail, predictive, payment, risk and marketing Ecommerce SaaS Emerging and disruptive SaaS businesses in the ecommerce sector. End-to-End ecommerce Service Providers Companies that provide end-to-end ecommerce services for retailers, such as platform, marketing, photo services, logistics, warehousing etc. Logistics Emerging platforms in the digital marketing and logistics space, who focus on innovation in supply chain and optimization in digital marketing Marketing Suites Emerging platforms in the digital marketing space Mobile Focused on mobile solution providers optimizing the mobile experience from desktop-to-mobile website conversions, targeted mobile marketing, to simplifying the mobile checkout experience. Personalization Emerging players in the ecommerce personalization space Retail instore technologies and retail IoT The internetworking of physical devices, vehicles, buildings, and other items – embedded with electronics, software, sensors, actuators, and network connectivity that enable these objects to collect and exchange data. System Integrators Focus on large SIs covering multiple platform as well as smaller SIs covering just one or a handful of platforms. Beauty, Health and Wellness Universe of beauty companies, including product manufacturers, retailers, disruptors and new entrants. Digitally Native Vertical Brands (DNVBs) D2C digitally native brands covering clothing, accessories, personal care, home and kitchen, furniture, and other consumer-focused products. Fintech Retail and commerce-related disruptors in the fintech universe. Current focus areas include payments, risk analytics, false declines and retail POS. Red=Not a focus for NRF 1 2 3 4 5 6
- 4. CONFIDENTIAL 4 ComCap – Active in 13 countries, including 11 of the top 22 global ecommerce markets $672.0 $340.6 $99.4 $89.6 $61.8 $42.6 $38.9 $26.8 $19.5 $19.0 $18.9 $15.9 $14.0 $13.4 $9.6 $9.4 $9.4 $8.5 $6.9 $5.7 $5.0 $3.2 Retail Ecommerce Sales Worldwide – 2015 (In $bn)
- 5. CONFIDENTIAL 5 NRF Attendee Landscape – Selected Companies AmountRaised Seed $100m Publiccompanies $200m $50m Mobile technologies $40m Logistics Retail in-store Technologies Marketing suiteseCommerce SaaSAnalytics and AI Other1 2 3 4 5 6
- 6. CONFIDENTIAL 6 NRF attendees – Analytics and AI Company: Retail Next Booth number: 3165 Amount raised: $183.5 Company: Inkling Booth number: 3861 Amount raised: $102.1m Company: Antuit Booth number: 447 Amount raised: $59.9m Company: Revionics Booth number: 3513 Amount raised: $56.8m Company: Shyft Booth number: 1060 Amount raised: $39.0m Company: O9 Solutions Booth number: 4407 Amount raised: $25.0m Company: DynamicAction Booth number: NA Amount raised: $23.0m Company: Twiggle Booth number: 947 Amount raised: $17.2m Company: Celect Booth number: 933 Amount raised: $15.0m Company: Profitect Booth number: 4253 Amount raised: $14.5m Company: SimpliField Booth number: 1155 Amount raised: na Company: CB4 Analytics Booth number: 2346 Amount raised: $6.0m Source: Crunchbase, NRF Big Show
- 7. CONFIDENTIAL 7 NRF attendees – Analytics and AI (Continued) Company: Nextail Labs Booth number: 1233 Amount raised: $2.0m Company: Venzee Booth number: 1259 Amount raised: $1.2m Company: Mercaux Booth number: 438 Amount raised: $0.8m Source: Crunchbase, NRF Big Show
- 8. CONFIDENTIAL 8 NRF attendees – eCommerce SaaS Company: Bigcommerce Booth number: 1035 Amount raised: $155.2m Company: Kibo Booth number: 4145 Amount raised: na Company: Brightpearl Booth number: NA Amount raised: $41.1m Company: Moxie Booth number: NA Amount raised: $35.0m Company: Mirakl Booth number: 238 Amount raised: $23.0m Company: OrderDynamics Booth number: 240 Amount raised: $10.4m Company: Bstock Solutions Booth number: NA Amount raised: $8.2m Company: Weblinc Booth number: NA Amount raised: $6.0m Company: Brandlive Booth number: NA Amount raised: $5.1m Company: Coremedia Booth number: 2433 Amount raised: na Company: Borderlinx Booth number: NA Amount raised: na Source: Crunchbase, NRF Big Show
- 9. CONFIDENTIAL 9 NRF attendees – Logistics Company: Flexport Booth number: 844 Amount raised: $204.0m Company: Optoro Booth number: IL26 Amount raised: $169.4m Company: aCommerce Booth number: NA Amount raised: $93.8m Company: Temando Booth number: 2237 Amount raised: $56.0m Company: Relex Booth number: 715 Amount raised: EUR 20.0m Company: Starship Booth number: IL21 Amount raised: $17.2m Company: Shiphawk Booth number: NA Amount raised: $10.0m Company: Zenput Booth number: 345 Amount raised: $1.7m Company: Texbase Booth number: 1260 Amount raised: $1.6m Source: Crunchbase, NRF Big Show
- 10. CONFIDENTIAL 10 NRF attendees – Marketing suites Company: Emarsys Booth number: 608 Amount raised: $55.3m Company: Dynamic Yield Booth number: 609 Amount raised: $45.3m Company: Mist Booth number: 915 Amount raised: $42.4m Company: AgilOne Booth number: 2339 Amount raised: $41.0m Company: Amplience Booth number: 2725 Amount raised: $31.3m Company: Zynstra Booth number: 237 Amount raised: $14.8m Company: Tinyclues Booth number: 1155 Amount raised: $7.4m Company: Bluefox Booth number: 2246 Amount raised: $7.0m Company: Zappar Booth number: IL17 Amount raised: $3.8m Company: Linnworks Booth number: NA Amount raised: na Company: 42 Technologies Booth number: 653 Amount raised: na Source: Crunchbase, NRF Big Show
- 11. CONFIDENTIAL 11 NRF attendees – Mobile Company: Slyce Booth number: IL9 Amount raised: $39.5m Company: Shopgate Booth number: 1207 Amount raised: $24.4m Company: First Insight Booth number: 3053 Amount raised: $23.4m Company: Unbxd Booth number: 1238 Amount raised: $14.5m Company: Scandit Booth number: 561 Amount raised: $13.0m Company: Nudge Rewards Booth number: 1245 Amount raised: $6.8m Company: Deposco Booth number: 611 Amount raised: $2.1m Company: Teamwork Retail Booth number: 723, 827 Amount raised: $1.5m Company: TransactionTree Booth number: 335 Amount raised: $185K Source: Crunchbase, NRF Big Show
- 12. CONFIDENTIAL 12 NRF attendees – Retail In-Store Technologies Company: Trax Image Recognition Booth number: IL30, 2883 Amount raised: $138.5m Company: Altierre Booth number: 1135 Amount raised: $111.6m Company: Mojix Booth number: 542, 2803 Amount raised: $85.5m Company: Reflexis Booth number: 1620 Amount raised: $47.5m Company: Tellermate Booth number: 303 Amount raised: na Company: ID.me Booth number: 3961 Amount raised: $45.8m Company: Shelfbucks Booth number: 3767 Amount raised: $20.5m Company: One Door Booth number: 4158 Amount raised: $16.5m Company: Theatro Booth number: 1121 Amount raised: $8.8m Company: Revieve Booth number: IL11 Amount raised: EUR 0.6m Company: Salesfloor Booth number: 222 Amount raised: $3.0m Company: TalentReef Booth number: 472 Amount raised: $4.0m Source: Crunchbase, NRF Big Show
- 13. CONFIDENTIAL 13 NRF attendees – Retail In-Store Technologies Company: Aila Booth number: 360 Amount raised: $5.6m Company: FindMine Booth number: IL7 Amount raised: na Company: Fidzup Booth number: 1155 Amount raised: EUR 3.3m Company: Focal Systems Booth number: IL15, 1239 Amount raised: $2.7m Company: Perch Booth number: 454 Amount raised: $1.5m Company: Keonn Technologies Booth number: 1223 Amount raised: $0.5m Company: Glass Media Booth number: IL1 Amount raised: $30K Source: Crunchbase, NRF Big Show
- 14. CONFIDENTIAL 14 NRF attendees – Other Company: RichRelevance Booth number: 555 Amount raised: $95.8m Company: Astound Commerce Booth number: 2534 Amount raised: na Company: Ecrebo Limited Booth number: 250 Amount raised: $23.1m Company: 7thonline Booth number: 1414 Amount raised: na Company: OneView Commerce Booth number: 1503 Amount raised: $2.6m Company: Attune Booth number: 2729 Amount raised: $2.0m Company: Everseen Booth number: 1243 Amount raised: EUR 1.3m Source: Crunchbase, NRF Big Show
- 16. CONFIDENTIAL CONFIDENTIAL 10 Select retail in-store disruptors can help retailers compete in an amazon world ` Analytics Display and signage Fintech Loyalty Marketing Store Mgmt OtherMobile TotalCapitalRaised $50m $10m $25m $75m $100m+ $5m Source: PitchBook, CrunchBase CONFIDENTIAL 26 ComCap’s strategic partner landscape Software and Service Leaders Payments & Fintech Email Service Providers / Other Marketing Global Logistics Leaders Agencies and Systems Integrators Retailers Corporate VC’s eCommerce leaders CONFIDENTIAL ComCap: Retail Market Overview June 2017 ComCap’s perspectives on retail in-store technology is shared with 250+ financial and 100+ strategic investors ▪ ComCap’s perspectives on various industries, including retail in-store technology trends, is being shared with our large network of strategic and financial investors globally ▪ This facilitates a better understanding of sweet spots for these investors; and ultimately helps to better position a mandated client with selected players ▪ Unique disruptors are gaining additional global coverage via ComCap’s reach CONFIDENTIAL Note: Based on SF / Bay-area store visits Feb 2017. 9 Physical stores slowly adopting in-store tech (con’t) Select Broadline / Specialty Retailers Digital Capabilities Beacon technology Click & collect Cross channel inventory view Digital signage / price tags E-Receipts Free in-store Wifi Online reviews / pins in store Unique digital payment (Samsung, Apple Pay) Mobile Integration: ▪ Associate Mobile App (selling tool / check-out) ▪ Customer mobile app integration ▪ Mobile deals ComCap proprietary analysis 16
- 17. CONFIDENTIAL Retail in-store technologies – key themes for 2017-2018 Offline retail accounts for roughly 90% of retail purchases and represents a multi-trillion dollar market, yet ecommerce penetration is steadily increasing and driving the need for improved customer experience and efficiency in-store Store productivity declining as ecommerce grows Physical stores still not digitized Technological advancement is needed to keep brick and mortar competitive Retail in-store technology disruptors can help retailers compete in an Amazon world Customer experience is still king Analytics focused on retail and risk management have attracted significant capital IoT applications present unique solutions for retailers 17 5 4 8 7 1 2 3 6
- 18. CONFIDENTIAL Offline retail remains a multi-trillion dollar market, yet ecommerce penetration is steadily increasing and driving the need for improved customer experience and efficiency in-store Source: eMarketer Total retail sales worldwide, 2015-20 Retail ecommerce sales worldwide, 2015-20 US$ trillions and percent change US$ trillions, percent change, and percent of total retail sales Note: Excludes travel and event tickets Note: Includes products or services ordered using the Internet via any device, regardless of the method of payment of fulfillment, excludes travel and event tickets $20.795 $22.049 $23.445 $24.855 $26.287 $27.726 5.8% 6.0% 6.3% 6.0% 5.8% 5.5% 2015 2016 2017 2018 2019 2020 Total retail sales % change $1.548 $1.915 $2.352 $2.860 $3.415 $4.058 25.5% 23.7% 22.9% 21.6% 19.5% 18.7% 7.4% 8.7% 10.0% 11.5% 13.0% 14.6% 2015 2016 2017 2018 2019 2020 Total retail sales % change % of total retail sales 18 1
- 19. CONFIDENTIAL Amazon is taking one third of total commerce growth… Estimated Amazon North America GMV growth vs US retail GMV growth1 and Amazon prime membership2 $8 $19 $14 $17 $19 $39 $41 $79 $131 $108 $91 $127 $120 $128 25 40 54 70 2010 2011 2012 2013 2014 2015 2016 ($billions) Y/Y change in Amazon GMV Y/Y change in US Retail GMV excluding non-Amazon categories Prime members (in millions) Source: Channel Advisor, Census.gov, ComCap LLC estimates2 Note: (1) US Retail GMW Growth = US Retail (ex-Autos & Food Services) + Automotive Parts / Tires – Fuel Dealers – Gasoline (2) Recode 10% 33% 15% 32% 15% 13% 19% AMZN % of US Retail Sales Growth Growth has doubled over the past 2 years and prime now penetrates nearly half of US households 19 1
- 20. CONFIDENTIAL Recognizing the value of online, Amazon bags the elephant, acquires Whole Foods Market 1.4% 1.7% 1.7% 2.1% 4.2% 5.2% 5.3% 6.9% 7.2% 16.6% United States The Netherlands Spain Czech Republic China Taiwan France UK Japan South Korea Online grocery sales have yet to take off in the US FMCG: Fast-Moving Consumer Goods Figures for the 12-month period ending June 2016 Source: Kantar Worldpanel US online food and drink sales (excl. sales tax, $bn) Source: Whole Foods, Amazon.com, Statista 4.8 7.6 12.2 4.0 5.0 6.0 7.0 8.0 9.0 10.0 11.0 12.0 13.0 2010 2011 2012 2013 2014 2015 2016E 2017E 2018E 2019E 2020E Will the whole foods deal boost Amazon fresh availability? Alaska Hawaii Whole Foods currently operates 444 stores in 43 U.S. States 20+ 10-19 3-9 1-3 0 ✓Seattle ✓Sacramento ✓San Francisco ✓Denver ✓Los Angeles ✓San Diego ✓Dallas ✓Chicago ✓New York City ✓Philadelphia ✓Baltimore ✓Boston Washington DC ✓ Amazon Fresh is currently available in selected cities including but not limited to ▪ Amazon acquires Whole Foods Market for $13.7bn Whole Foods Market could turbo charge Amazon Fresh, which has a limited reach given its $14.99 / month fee for Prime members Amazon gets access to 400+ Whole Foods stores across 43 states 62% of Whole Foods customers have Amazon Prime accounts, enabling Amazon to observe consumer shopping tendencies both online and in store Whole Foods brings expertise in category and SKU in food and healthy living The overall grocery spend in US is around $1.5t of out which just $17bn is online (1.4% of total sales) ▪ Whole Foods’ typical customer earns $100k-$125k+ annually, which Amazon hopes to target ▪ Whole Foods has underinvested in ecommerce technology, and stands to benefit from Amazon's ecommerce and logistics expertise, and will bring to bear its own last mile connectivity capabilities 20 Number of Whole Foods stores in the US (as of June 2017) Top 10 markets with the highest e-commerce share of FMCG sales 1
- 21. CONFIDENTIAL Prime wardrobe could decrease footfall to legacy retailers ▪ Amazon’s launch of Prime Wardrobe curates clothing and accessories, delivers them to Prime members to “try before they buy” Customers have seven days to choose products they’d like to keep, and get 10% and 20% discount if they keep more than two or four items, respectively Amazon's logistics network enables efficient and convenient delivery and returns for consumers vs. traditional retailers ▪ Prime Wardrobe service is combined with Prime membership fee Prime Wardrobe service is expected to further boost Amazon’s online apparel segment, which contributed 12% of sales growth last year ▪ Amazon launched seven private-label clothing lines in 2016, excluding Zappos and Shop Bop Amazon also acquired a on-demand clothes manufacturing patent to shorten lead times and minimize inventories Amazon’s Style Check feature and Echo Look and data on items kept will drive improved personalization of curated items for consumers $56.9 $63.3 $69.6 $78.9 $83.8 $90.3 $96.4 2015 2016 2017 2018 2019 2020 2021 Amazon can accelerate penetration of a leading ecommerce segment Source: Satistica $7 $8 $8 $13 $10$10$11 $17 $13$13$13 $20 $15$16$17 $20$20$21$22 $32 $23 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Prime wardrobe can contributed to Amazon’s expanding share of global retail revenue ($bn) Source: BI Intelligence Amazon’s private clothing labels SOCIETY NEW YORK Apparel, footwear and accessories retail e-commerce revenue in the United States from 2015 to 2021 ($bn) 21 1
- 22. CONFIDENTIAL Google has previously integrated partner technologies into its product offerings with great success 22 DescriptionPartnership ▪ DigitalGlobe is a key player in the global commercial satellite- imagery industry ▪ Much of Google Earth and Google Maps’ high resolution- imagery is provided by DigitalGlobe ▪ Google acquired ITA Software in July 2010 for $700mn ▪ Google’s acquisition of ITA Software aimed to create a new, easier way for users to find better flight information online, turbocharging online purchases of flight tickets ▪ The acquisition was projected to benefit passengers, airlines and online travel agencies by making it easier for users to comparison shop for flights and airfares and by driving more potential customers to airlines’ and online travel agencies’ websites ▪ Integrated ComScore’s validated Campaign Essentials (vCE) for US Google DoubleClick customers to help improved digital advertising’s problems such as viewability ▪ Developed audience delivery metrics such as Gross Rating Point (GRP) measurements for digital media ▪ In Feb 2016, it was forecasted that ComScore vCE will deliver $100m in 2017 revenue to ComScore, largely attributable to DoubleClick Source: Press releases and articles 1
- 23. CONFIDENTIAL Store productivity declining with ecommerce growth… ▪ Online sales have hampered brick and mortar stores’ ability to increase productivity. Digital sales have grown double digits annually The U.S. Census Bureau estimated that total e-commerce sales for 2016 were $395 billion, an increase of 15.1% over 2015 ▪ Productivity rankings for the 2016 for leading U.S. retailers, as compiled by E-Marketer show large format and specialty retailers are among the most productive ▪ Returns create further headwinds for retailers – The National Retail Federation says that returns have increased 52% from $171 billion in 2007 to $260 billion in 2015 ▪ Free delivery is often an incentive to buy online, forcing traditional retailers to make up the losses on returned items through higher productivity ▪ Lower productivity retailers need innovation urgently to drive foot traffic back to brick-and-mortar locations Declining store productivity 2014 - 2016 Source: Forbes. Note: Some companies do include their online sales in their productivity figures since they fulfill their omnichannel sales in their stores. While department stores have benefitted from online sales, they have not included them in their productivity statistics. 23 2 The Amazon effect – US eCommerce sales growth, year over year $0 $200 $400 $600 $800 $1,000 $1,200 2014 2015 2016 Retailers avg. sales per square foot Note: Saks, Lord & Taylor and Hudson’s Bay are brands of the parent company Hudson’s Bay company. Hence the Store productivity data is for each brand Belk 2016 store productivity is sourced from Forbes Source: eMarketer, Forbes
- 24. CONFIDENTIAL Select broadline / specialty retailers Digital Capabilities Beacon technology Click & collect Cross channel inventory view Digital signage / price tags E-Receipts Free in-store Wifi Online reviews / pins in store Unique digital payment (Samsung, Apple Pay) Mobile Integration: ▪ Associate Mobile App (selling tool / check-out) ▪ Customer mobile app integration ▪ Mobile deals Note: Based on SF / Bay-area store visits Feb 2017 …Creating a huge opportunity for adaptive retailers (yet many are slow to do so) ComCap proprietary analysis 24 3
- 25. CONFIDENTIAL Select broadline / specialty retailers Digital Capabilities Beacon technology Click & collect Cross channel inventory view Digital signage / price tags E-Receipts Free in-store Wifi Online reviews / pins in store Unique digital payment (Samsung, Apple Pay) Mobile Integration: ▪ Associate Mobile App (selling tool / check-out) ▪ Customer mobile app integration ▪ Mobile deals Note: Based on SF / Bay-area store visits Feb 2017. Physical stores slowly adopting in-store technology (con’t) ComCap proprietary analysis 25 3
- 26. CONFIDENTIAL Customer experience is still king… Increasing dependence on CX to generate higher revenue, better customer loyalty, a bigger market share, and even higher stock prices ▪ Shopping is no longer treated as a need- based activity, but has become an experience, providing a unique opportunity for retailers to develop strategies for delivering the experience customers desire and boost their business ▪ At 52% in ForeSee’s experience index, the appeal, variety, and availability of products make merchandise one of the top drivers of improving CX ▪ Customers who then have a great CX are 50% more likely to purchase from that retailer’s store and 60% more likely to buy from that retailer the next time they buy similar merchandise ▪ Now more than ever it is essential for retailers to offer an experience to their customers that they couldn’t receive via mobile or online ✓ With the advent of digital marketing, in addition to the abundance of in- store advertising, creating lasting impressions on customers is becoming a significant challenge ✓ Fierce competition, has been exacerbated by the rise of ecommerce, making the need for retailers to differentiate both themselves and the in-store experience all the more urgent Source: ForeSee’s 2016 Experience Index, press releases. Priority map ▪ 56 cents of every dollar spent in a store is influenced by a digital interaction (Deloitte, 2016) ▪ 75% shoppers now prefer to browse online then buy in store (PWC, 2015) ▪ In the apparel sector, over half of shoppers who browse online still prefer to go in store to complete the purchase (PWC, 2016) ▪ 76% of Millennials use their mobile phone while in store (ForeSee, 2016) 82 7879 79 76 80 2011 2016 Store Web Mobile Changes in channel CX Despite clear evidence that CX drives customers, store CX it has dropped four points since 2011 according to ForSee’s experience index. Chart above is a reference point for what retailers need to improve as it relates to the customer experience. Merchandise and price remain top priorities Outcomes of a great store CX Monitor Top priority ImproveStatus quo Low Impact High Impact Price Merchandise Service Store environment Elements Top priority elements 26 4 LowScoreHighScore
- 27. CONFIDENTIAL … Yet retailers struggle to understand consumers’ multi-channel journey due to poor integration of online/offline data Source: A commissioned study conducted by Forrester Consulting on behalf of RetailNext, November 2015 Consumers turn to different channels at different stages of the buyer journey Retail stores struggle to integrate online and offline data 15% 14% 57% 51% 24% 32% 33% 60% 10% Purchase products Interact with customer service agent or store associate Research products Mostly or exclusively in -store Online and in -store equally Mostly or exclusively online But when it comes to making purchases, 51% of consumers do so online and in-store equally followed by the 33% who prefer to make purchase in-store 60% prefer to interact with sales associate in-store Most Consumers (57%) prefer to research products online 20% 17% 23% 13% 19% 14% 17% 23% 18% 21% 25% 28% 27% 45% 41% 46% 44% 39% 47% 45% 41% 39% 36% 27% 25% 31% 31% 31% 25% 24% 13% 15% 14% 12% 13% 9% 7% 6% 8% 9% 1% 1% 1% 1% 1% Able to understand online touchpoints and the… Can take orders in-aisle via mPOS Know what tasks are the highest priority Know what amount of interaction is the right amount to… Place orders for items that are located in another store or DC Offer ongoing training based on their performance Able to understand past customer behavior and make… Access to rich content and information in order to help… Access to robust reporting that helps them understand store… See inventory in all store and distribution center locations Strongly agree Agree Neither agree or diagree Disagree Strongly disagree 27 4
- 28. CONFIDENTIAL Creating a unique experience differentiates retailers and drives repeat foot traffic ✓ Emergence of robots in retail enhances customer experience ✓ Rise of sensor technology streamlines the experience ✓ New in-store technologies including analytics, intelligent merchandising, associate augmentation, way-finding, personalized virtual experiences, and augmented reality experiences are being offered by innovative disruptors ✓ Services to drive online customers to the store such as buy online & pick up in store, interactive kiosks, create digital GIF booth, virtual rails, interactive dressing room, digital fitting room and others create a differentiated experienced Retail in-store technology disruptors can help retailers compete in an Amazon world… Source: CB Insights Technology provider Technology overview ▪ Offers a centralised SaaS platform, that automatically collects shopper behaviour data ▪ Improves attribution of online to offline campaigns with comprehensive in-store analytics ▪ The analytics software and retail expertise assist in increasing same-store sales, reducing theft and eliminating unnecessary costs ▪ One Door provides Merchandising Cloud, a SaaS-based application that enables localized merchandise campaign planning, communication, in-store execution, and compliance tracking; ▪ Enables merchandising plans tailored to each store which provide a guided associate experience, improving sales conversion while reducing inventory and operational costs ▪ SES-imagotag offers retailers with an all-in-one solution to connect their stores: electronic shelf labels, jeggy software and MultiCom infrastructure ▪ Shelfbucks is an in-store smart shelf and smart display platform ▪ The company allows CPG's and retailers to measure, manage and improve the effectiveness of in-store product merchandising programs A robotic selling machine installed in a Best Buy store in Manhattan Rebecca Minkoff established a digitally connected store collaboration with eBay, optimizing the use of space Virtual rail mounted by M&S in its store allows customers to browse life-sized imagery of merchandise, simulate a real life clothing rail 28 5
- 29. CONFIDENTIAL … and transform brick-and-mortar retail Selected in-store innovators ▪ Recent advancements include robotics, personal recognition, digital wallets, artificial intelligence, consumer analytics and other tech driven initiatives in order to make shopping easier instore and online ▪ Instore operations have been transformed by new developments such as interactive kiosks, mobile payments, BLE technology, RFID tagged products and smart shopping carts ▪ Innovations such as virtual mirrors and interactive kiosks can also refuel customers’ desire to shop instore ▪ A range of ancillary services are popping up for instore, such as POS financing, guest wifi, and POS interviews Source: CB Insights 29 5
- 30. CONFIDENTIAL Select retail in-store disruptors ` Analytics Display and signage Fintech Loyalty Marketing Store Mgmt OtherMobile TotalCapitalRaised $50m $10m $25m $75m $100m+ $5m Source: PitchBook, CrunchBase 30 5
- 31. CONFIDENTIAL Technological advancement is needed to keep brick and mortar competitive… Strategies Description Offline stores Assist in improving the buying experience at physical stores: ▪ Kiosk implementation: Shares the image of a particular product either through Bluetooth/ Wi-Fi and the kiosk pops up with the exact product / similar products present in the store ▪ Virtual trial mirror: If a client stands in the front of mirror, he can have a view of the entire catalogue in the front of the mirror. The customer can view different products on themselves, change the background, the colour of the product, take a selfie, match the product with complementary products and see the entire collection without actually wearing it ▪ Localization: Using assortment planning to choose optimal products for each location and digital merchandising execution to ensure precise placement and presentation of optimal products and their related VM/POP can be executed in less time by lower cost in-store labor Virtual reality ▪ Through VR, the user can visit various stores, view their entire catalogue, and look for all the latest collections from their favourite brands or designers ▪ VR store is very well arranged to locate the category of the products and helps the consumer find what they are looking for Video analytics ▪ Provide useful insights on how much time a user spent on each product, who is taking the product from the shelf and without putting it to the cart keeping it back on the self ▪ This information assists in analysing the offers to be given and to increase the footfall in the physical stores Augmented reality ▪ Various brands / retailers can promote their product using AR. The consumer can launch a user manual in a short video while hovering the camera over the logo on the packaging ▪ For example: For home decor, the user can scan the barcode of the item they likes and after returning home can see the product in the real world with the camera positioned in the space where they want to keep the product Personalized online shopping ▪ Personalised shopping experience has given a rise to personalised pages, personalised search results, personalised product recommendations, and personalised offers ─ Personalized pages: It can be the landing page as well as the product page. By tracking the user’s past activities on the website, the company can analyse and predict the likes and dislikes of the user ─ Personalized product recommendations: After understanding the behaviour of the consumer, the company can make recommendations on potential purchases 31 6
- 32. CONFIDENTIAL … fueling the demand for in-store technology which continues to attract venture capital $45 $67 $103 $184 $134 $114 $183 $297 $59 $314 $275 $137 $238 $229 $275 $137 $190 $229 18 22 30 46 36 30 34 41 28 46 40 35 47 56 40 35 45 32 0 10 20 30 40 50 60 $- $50 $100 $150 $200 $250 $300 $350 Q1'13 Q2'13 Q3'13 Q4'13 Q1'14 Q2'14 Q3'14 Q4'14 Q1'15 Q2'15 Q3'15 Q4'15 Q1'16 Q2'16 Q3'16 Q4'16 Q1'17 Q2'17 Disclosed funding ($m) Deals Source: CB Insights 32
- 33. CONFIDENTIAL IoT applications present unique solutions for retailers ▪ According to Juniper Research, the number of IoT-connected devices will reach 38.5 billion in 2020, a 285% increase from 13.4 billion in 2015 ▪ The devices include smartphones, tablets, smart signage and wearables. Using data from a smartwatch, retailers will be able to gain insight into how long a customer stands near a product, or the speed at which they wander down the aisle ▪ To make in-store digital signage even more interactive, avant-garde retailers are integrating beacon technology to detect users with Bluetooth-enabled smart devices as they approach the digital displays. For example: Zatar and Samsung are creating an engaging customer experience by affixing RFID tags within labels on wine bottles The start-ups in this market map have raised $900m in aggregate to bring IoT into retail Source: CB Insights 33 7
- 35. CONFIDENTIAL ComCap’s perspectives on Personalization in retail is shared with 250+ financial and 100+ strategic investors ▪ ComCap’s perspectives on various industries, including personalization in retail, is being shared with our large network of strategic and financial investors globally ▪ This facilitates a better understanding of sweet spots for these investors; and ultimately helps to better position a mandated client with selected players ▪ Unique disruptors are gaining additional global coverage via ComCap’s reach 35
- 36. CONFIDENTIAL 36 eCommerce personalization services landscape ▪ Personalization capabilities are now viewed as critical in achieving a unified customer experience − B2C, and increasingly, B2B sellers are investing in customer individualization and intimacy ▪ Historically a poorly defined category, Personalization Services is now entering its “Version 2.0” − First generation solutions were characterized as being complex and difficult to implement resulting in delays as marketers had to rely solely on IT − Next generation SaaS providers are now leveraging big data, AI and machine learning to create meaningful one-to-one consumer and buyer profiles − This new generation of providers puts the marketer in charge, allow DIY implementations ▪ Some early consolidation occurring as larger platforms strive to meet retailers agendas ▪ In addition there has been very active investment by the venture / PE community driven by the strong ROI in the space ` Personalization Companies TotalCapitalRaised $50m $10m $25m $75m $100m+ N/A Source: Pitchbook
- 37. CONFIDENTIAL Personalization disruptors are emerging across a wide range of sectors, representing an attractive investment opportunity for financial and strategic investors Personalization is quickly becoming a cornerstone of corporate marketing strategy Personalization is evolving rapidly as retailers react to consumer demand to provide a “frictionless” customer experience Consumers are prepared to pay a premium for a customized product or service Personalization is bridging the gap between online shopping and in-store experience Data is transforming how companies approach personalization The CMO is wielding more power when it comes to technology spend, with personalization becoming a focus area Retailers are engaging with customers through personalized in-store technologies including beacons and in-store ads 5 4 7 1 2 3 6 8 37 Personalization in Retail – Key themes for 2018
- 38. CONFIDENTIAL 38 Personalization is of current paramount importance “The bottom line is that if you can't identify customers through the interaction channels, you can't engage with them in a meaningful way… Businesses must integrate their customer relationship management (CRM) systems with data sources from other customer touchpoints, [and] need to consider new approaches and programs that will enable them to capture additional customer behavior information that will provide deeper insights” -Brian Chung, Head of Global Solutions Marketing, SAP “Personalization is helping us build relationships with our customers that translate into increased engagement, loyalty and revenue.” - Simon Pritchard, Group Digital Director, Arcadia “59% of shoppers who have experienced personalization believe it has a noticeable influence on purchasing.” -Rethinking Retail, Infosys “77% of consumers have chosen, recommended, or paid more for a brand that provides a personalized experience.” - Forrester Research “In 2017, personalization will continue to drive customer engagement for retailers….it will empower sales associates to build stronger connections, increased brand trust, and loyalty.” - Oscar Sachs, CEO, Salesfloor “70% of retailers cited personalization of the customer experience as a leading customer engagement priority for 2017.” - Boston Retail Partners 2017 Customer Engagement Survey “In-store shopping is far from dead — but it does have to change to keep up with the trends. Instead of telling customers how, when and where to shop, retail stores are catering to their customers’ individual shopping requirements — the shopper is in charge, and retailers must adapt.” Gary Ambrosino, CEO, TimeTrade 1
- 39. CONFIDENTIAL 39 Organizations employ a variety of personalization tools to drive consumer engagement Email and social media personalization Consumers tend to identify themselves to a business by signing up for some form of notification such as a newsletter or following the business on social media. As a result they will provide information about themselves and their preferences. This allows targeted communication using segmentation based on the data the consumer provided. For example this might occur through targeted email campaigns or Facebook advertising. Campaign personalization Campaign personalization describes website content personalised to support online and offline campaigns. This typically involves the creation of a custom landing page to support the campaign. These pages would include a call to action such as making a donation or signing up for an event. Geographical personalization Geographical personalization customises content based on the consumer’s geographical location. The technology can also send consumers geo-located messages about special offers or discounts close-by. Internet protocol address customisation IP customisation attempts to identify the user through their IP address. Knowing where a user comes from allows the customisation of content to reflect their needs. It involve changing homepage content to provide quick links to content of specific interest to that consumer. Account customization The consumers can personalise content once personalise content once they have created an account. By logging in the consumer identifies himself and so content can be tailored according to the requirements. It is possible to do account customization without a consumer logging in by relying on cookies. Related content personalization This type of personalization is used by Amazon. It refers to recommendations based on what content a consumer has previously viewed and the behaviour of other consumers. 1
- 40. CONFIDENTIAL 40 Organizations are quickly implementing personalization strategies ▪ Personalization is widespread, but techniques remain relatively basic: roughly 90% of senior marketers worldwide are implementing personalization strategies, but only 6% rate their strategy as advanced ▪ Email remains the most common channel that retail marketers personalize: two-thirds of US marketers personalized email content, followed by 56% that personalized elements of their website ▪ 48% of US marketers reported that personalization on their websites or apps lifted revenues in excess of 10%; only 11% reported no lift ▪ Integration of data across devices, channels and functions is essential, but most companies lack this capability: data from customer relationship management systems is often the hardest to tap for personalization purposes ▪ A recent survey from eMarketer, found that 55% of US internet users ranked Amazon as the digital platform having the best personalized customer experience Implementation of Personalization StrategyOrganizations define Personalization Differently According to Senior Marketers Worldwide, Dec 2016 (% of respondents) In process, 56%Just starting out, 28% Not doing anything, 10% Advanced, 6%61% View personalization as a business strategy 80% Feel that personalization has gotten more complex in last 3 years 75% View segmentation as the minimal effort to claim “personalization” View personalization as a marketing tactic 39% Source: eMarketer 1
- 41. CONFIDENTIAL Personalization is evolving rapidly as retailers react to consumer demand to provide a “frictionless” customer experience Plans to implement personalization services among North American Retailers Most retailers expect to implement a personalization strategy within the next 3 years 9% 4% 2% 27% 18% 21% 16% 38% 60% 44% 42% Personalized rewards based on customer loyalty Suggested selling based on previous purchases Personalized promotions Personalized digital content Implemented and working well Implemented and needs improvement Implement within 3 years ▪ Personalization of the eCommerce experience is proven to increase sales ▪ 60% of US consumers want to receive real-time promotions and offers ▪ Yet many North American retailers have not implemented a personalization strategy − Vendor integration problems − Additional analytics required − Inability to create personalized content 41 Source: Boston Retail Partners (% of respondents) 2
- 42. CONFIDENTIAL Marketers view personalization as critical to drive their most important metrics… 24% 24% 22% 20% 17% 15% 14% 12% 10% 10% 0% 5% 10% 15% 20% 25% 30% Returnvisits Conversionrate(e.g., purchase) Timeonsite Pageviews Registration/signups Numberofleads Downloads(e.g.,whitepapers) AverageOrderVolume(AOV) LifetimeValue(LTV) Bounce/exitrate ▪ Web personalization is becoming democratized and is providing ROI for large, medium, and small businesses ▪ Web personalization has proven to affect bounce rates, time-on-site, page views, conversions, etc. ▪ Over 85% of marketers report seeing a lift of at least 5% in their most important metrics − Roughly 40% have seen increases of at least 20% in their metrics What are the primary metrics marketers use to improve web personalization efforts? 42 Source: VentureBeat 2
- 43. CONFIDENTIAL 43 …and consumers are prepared to pay a premium for a customized product or service 34% 31% 26% 25% 24% 23% 22% 22% 21% 21% 19% 16% 15% 14% 12% 33% 34% 36% 36% 35% 36% 38% 32% 33% 33% 32% 29% 28% 27% 31% 10% 15% 19% 17% 19% 18% 21% 21% 20% 18% 23% 20% 22% 24% 25% 7% 3% 7% 6% 8% 9% 9% 7% 8% 12% 11% 14% 12% 12% 11% 3% 4% 2% 4% 3% 3% 2% 5% 5% 3% 4% 5% 4% 5% 5% 3% 5% 3% 4% 4% 5% 2% 4% 6% 5% 6% 9% 10% 11% 9% 10% 8% 7% 8% 7% 6% 6% 9% 7% 8% 5% 7% 9% 7% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Soft drinks Books, music & entertainment Restuarants Beer, wines & spirits Hotels Flights Food & groceries Electrical products Health & Welness Beauty products Holidays Fashion accessories & jewellery Furniture, homeware & DIY Footwear Clothing 0% more 10% more 20% more 30% more 40% more Over 50% more Don't know Premium consumers are willing to pay for a customized product or service Source: Deloitte 3
- 44. CONFIDENTIAL The CMO is wielding more power when it comes to technology spend, with personalization becoming a focus area Overview CIO vs. CMO Spending (% Revenue) CMOs (Chief Marketing Officers) emerge as the primary technology consumer in the Enterprise ▪ CMOs are wielding increasing purchasing power and influence over marketing software solutions ─ CMO-directed IT budgets are expected to grow at 11% per year, compared to 4% for CIO (Chief Information Officer) - directed IT budgets ─ Solutions that demonstrate rapid time-to-value and robust integration will be beneficiaries of the CMO- directed spend ▪ According to Gartner CMO Spend Survey 2016-2017, CMOs oversee or heavily influence customer experience, technology spending and P&L performance as means to deliver growth ─ Digital commerce continues to be an important driver of growth, with 62% of companies reporting that digital commerce rolls up to CMO ─ Marketers have started to spend heavily on technology. This has narrowed the gap between IT spending by CIOs and CMOs Data and personalization becoming a focus area: ▪ Personalization is rooted in tracking and analyzing every customer interaction point, identifying the next best action and triggering that action through engagement applications ▪ The majority of marketing organizations are personalizing content in social media and owned web, email, and eCommerce channels Source: Gartner, Wall Street Research Digital Marketing Market Size (In $bn) 3.2% 3.8% 2.5% 3.8% 2013 2017 CIO IT Spend CMO IT Spend $14.2B $20.2B $33.3B $- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 2010 2012 2016 eCommerce Sales CRM Automation Email WCM Social CRM Analytics 44 4
- 45. CONFIDENTIAL The consumer and the data they generate is driving mass personalization ▪ Direct input from the customer is key to creating compelling and relevant personalized retail experiences ▪ Retailers can use information from online buying behaviour to serve customers at the point of sale based on the relevant input he or she requires ─ This closes the gap between online and physical shopping experiences that previously created headaches for a lot of retail brands ▪ Email and website personalization allows retailers to deliver a hyper- relevant online experience to every customer ▪ Hyper personalization relies on additional dimensions about the customer; these dimensions relate to their activity, interest, opinion (AIOs), attitudes, values and behaviour. ▪ The loyalty program allows customers to set up a profile in which they input specific attributes relevant to a provider of beauty products, such as skin tone ▪ This information is then used to serve special offers to the customer relevant to their requirements ▪ In addition, shoppers can save ‘loves’ and purchases in a ‘beauty bag’ both online and in store. This information in available across devices, including in store via the provision of iPads at store counters. Source: Smart Insights; ComCap analysis Case Study: Sephora’s Beauty insider loyalty programme 45 Need for Customer Input 5
- 46. CONFIDENTIAL Data is transforming how companies approach personalization Source: 2017 Customer Experience / Unified Commerce Survey ▪ Today retailers have unprecedented access to data that can potentially enhance customer experiences ─ Data from devices (such as smartphones and tablets), ecommerce and point-of-sale systems, loyalty programs, inventory systems, contact centres, geographic, demographic, social behavioural and others ─ The larger the amount of data a retailer can collect and analyse, the better the possibilities are to deliver a better and relevant omnichannel experiences ▪ In 2017, Gartner predicted that 89% of marketing leaders expect customer experience to be their primary basis for competitive differentiation ─ The main aim of the companies is to create focused direct-to-customer relationships, both to protect profits and raise the barriers to new market entries ▪ Companies do face significant hurdles in realizing the full benefits of personalization, such as: ─ Technical barriers such as poor data centralization ─ Legacy technology that does not support one-to- communication at scale ─ Insufficient measurement capabilities 37% 52% 61% 64% 67% 69% Use data extracted from loyalty and customer value programs to create relevant personalized offers Use behavior-based data to develop the right content based on insights and emotions Use customer data to create individualized content and offers on a channel-specific basis Integrate customer data to create individualized content and offers that span across channels Use customer data to create targeted content and offers by demographics Use demographic categories to create at least some level of personalization for unidentified prospected customers 46 Approaches to personalized marketing according to senior marketers in the US and Western Europe 5
- 47. CONFIDENTIAL Personalization is bridging the gap between online shopping and in-store experience Retailers can combine online buying behaviour with in-store location data gathered via beacons to serve customers with relevant information or offers right at the point sale. This helps cross sell and up-sell as well as enhances customer experience ▪ Direct input from the customer is a key to create compelling and relevant personalized retail experiences ▪ Retailers can use information from online buying behaviour to serve customers at the point of sale based on the relevant input he or she requires ─ This closes the gap between online and physical shopping experiences that previously created headaches for a lot of retail brands ▪ Email and website personalization, the retailers can can deliver a hyper- relevant online experience to behaviour. ▪ The customer experience is manifested by who you are - your people; what you do - your products and services; and how you do it - your business processes, methodologies & service levels. ▪ The goal marketing leaders is to attract and grow customer relationships, earn customer loyalty, and activate their advocacy. Source: Gartner ValueVoice Valence Product PeopleProcess What you do Customer feedback and sentiment How you do it Lifetime value of the customer Who you are Positive or negative affinity over time Attraction Growth Loyalty Advocacy Content 47 6
- 48. CONFIDENTIAL 48 Retailers and brands are using beacons for marketing campaigns Retailers Description • Macy’s introduced beacons technology in combination with ShopKick, an iPhone app that offers location-based coupons • This technology recognizes consumers as they enter or pass one of their stores • Shoppers receive personalized deals, discounts and product recommendations • Even reward points can be generated for entering their stores or buying a product • Lord & Taylor launched a beacon program to offer more personalized approach of targeting the users with specific sections of store sales in addition to short range for individualized products based on past information collected on the visitors shopping preferences • The technology anticipates what the customer will like about the products while they are near the store • Target is implementing beacons across 50 selected stores • It plans to limit the number of beacon notifications to two push notifications per shopping trip, so as not to overwhelm customers with alerts • Carrefour has extensive iBeacon networks across a range of its hypermarkets in Romania through which the retail chain offers its consumers an app for orientation inside hypermarkets from area to area • The app p automates the commercial content delivery and collects essential data about in-store consumer behaviour • Eat, the food-to-go chain, partnered with Weve’s beacon-enabled consumer loyalty app, Pouch, designed to store a retailer’s loyalty cards and push out offers to customers • The action allowed the company to access more information about customer behaviour and drive business intelligence to make precise decisions about how consumer behaviour can be influenced • Hammerson rolled out beacons across their shopping centres to improve personalization of consumers’ shopping experience • Currently, over 80,000 customers have downloaded the Plus app already and Hammerson has over 6,000 beacons situated throughout its shopping centres in the UK and France 7
- 49. CONFIDENTIAL 49 Retailers and brands are using beacons for marketing campaigns (cont’d) Retailers Description • In 2016, Rite Aid has installed beacons in over 4,500 US stores for retargeting and personalization of user experience • It plans to employ these beacons to focus on creation of a digital infrastructure base that will enable the drug-store chain to link its stores to IoT, collection of beacon-level proximity data to strategize their retargeting plan, and achieve personalization capabilities similar to those that have been used in eCommerce • Woolworths has implemented iBeacon technology to improve customer service around click-and-collect • In 2016, Woolworth announced its plans to roll out beacons across all of its 254 click-and-collect stores with the aim of allowing consumers to place their order online and pick them up in-store • American Eagle Outfitters partnered with Shopkick, to launch beacon networks in more than 100 of its top performing stores located in states such as Chicago, Dallas, Miami, New York, and San Francisco • The main purpose was to implement iBeacon technology at the stores with highest traffic levels and best traction with Shopkick • Waitrose started using iBeacon technology at its relatively new experimental Swindon store to deliver price promotions to consumers when they were near a particular aisle or food counter • The app also allows a consumer to scan barcodes, read customer reviews of products, add items to a virtual shopping basket, and pay via a mobile wallet • Tesco launched its “biggest trial” of iBeacon technology, in partnership with consumer goods company Unilever, by deploying beacons in 270 stores across London • They launched the ‘Mpulse app’ as a part of the Pink and Black marketing campaign • Alex and Ani used beacons in all of its 40 stores to optimize store layouts and product placement • It used beacons to educate consumers about its jewellery. 30% of the customers who saw the notifications, visited the store • The brand’s focus was primarily to capture analytics and enhance store layouts for better business. 7
- 50. CONFIDENTIAL 50 Retailers and brands are using beacons for marketing campaigns (cont’d) Retailers Description • American Eagle and Aerie introduced beacons across its various stores to target people with promotional offers • The company will use pre-populated orders via beacons to get people ordering without even opening the app itself • Neiman Marcus has adopted a strategy for beacon implementation is to focus on in store events • The high end fashion retailer will use their beacons to alert customers of events in store where they can learn fashion tips, find specials or learn about clothing care and others • The company can also pair up a personalized offer that relates to the event to an to attract more participation and engagement from the consumers • Best Buy has implemented a beacon strategy to drive its sales and gain more business with a person touch • It has implemented beacons through their application as well as Shopkick retailing app to offer rewards to shoppers, simply for stepping foot in the door • Meadowhall Shopping Centre used iBeacon technology to gamify the Ladies’ Night event with brands providing offers, discounts, freebies, and prize giveaways • Customers had to download Meadowhall’s beacon-enabled app to receive a notification on their smartphone whenever they came into range of a beacon • McDonald’s planned to enhance personal relationships with customers as well as promote a new line of coffee-flavored beverages by leveraging a new proximity marketing strategy via beacons at its 15 cafés in Istanbul • The chain tapped a popular Turkish loyalty app called Shopping Genie, to target customers while they were around the premises of a local McD Café • Kenneth Cole is using beacons to create more compelling, personalized customer experiences with an aim to “provide value and offers at the time of need when customers are in the store” Source: Styla.com, blog.beaconstac.com 7
- 51. CONFIDENTIAL Showrooms are getting personal ▪ A customer that spends a considerable amount of time in a single area of a store can be picked up by Beacon’s, which then cross-check that information with the store's floor plan and ascertain what product they are interested in − The customer can then be messaged later on with relevant offers based on what products they were researching in store ▪ Beacons provide a way to bricks-and- mortar retailers to deliver offers and notifications to consumers' smartphones via a Bluetooth low energy (BLE) signal while they're in-store − The devices provide a unique advantage for bricks-and-mortar businesses as they continue to try to deflect the threat from eCommerce-only retailers − They won't keep people from using their smartphones to price compare but they could send people the kind of incentives that will entice them to convert in-store Beacons allows retailers to send personalised messages which link the in-store and online shopping experience. A customer may plan to buy a Smart TV may spend a considerable amount of time looking at the different Smart TV options in Currys PC World, then go home and do a bit more research online. Later that day they get an email from Currys PC world with special offers on the TVs the customer spent time browsing in-store. The customer then purchases a TV online, which is then delivered to their home. Source: Smart insights.com, Business Insider 51 7
- 52. CONFIDENTIAL Personalized in-store ads are increasing in prominence Retailers are engaging with customers through personalized in-store ads based on demographic information and preferences ▪ Snack food giant, Mondelez, makers of Oreo, Ritz crackers, Wheat Thins and other snacks has invented Smart Shelves ▪ Smart Shelves can identify basic demographic information about the shopper as they browse the store ─ Smart shelves use the information to display personalized ads on video displays near the checkout that customers would see when queuing before purchase ▪ Smart shelves can also detect when a shopper picks an item up from a shelf to get a closer look ▪ Ads are also targeted based on items almost bought, and special offer coupons are displayed to close the deal ▪ Coca-Cola has collaborated with Google Technologies to target consumers in US grocery stores ─The system is powered by Google Cloud technologies and works on any HDMI- ready display that serves as grocery store aisle “end caps” (a term used to describe advertisements at the front of grocery store aisles) ▪ These endcaps, using a combination of Google’s DoubleClick and location-based technologies, serve ads and e-coupons to passing consumers based on their smartphone data ▪ The data includes anything from consumer’s basic gender or age demographic to previous browsing history ─An ad could change from Coke Zero to Glacéau Smartwater, if it recognizes a preference for healthier products ▪ The aim is to connect and engage with consumers to drive sales of the brand in retail stores Mondelez’s Smart Shelves Coca Cola’s personalized in-store displays Source: Smart insights, Business insider, Netimperative.com 52 7
- 53. CONFIDENTIAL Mobile is the key to customer engagement Mobile apps can help drive sales by engaging with the customer through personal experiences by providing special promotions or recommendations based on buying behaviour ▪ According to a mobile marketing study conducted by Vibes, 89% people agreed to sign up for mobile messaging if they were personalised based on their preferences, location, timeliness and others ▪ 86% of consumers say personalization influences their purchasing decisions, and 53% think it is important for retailers to recognize users in all the channels available − Retailers must offer cross- channel personalization in order to combat showrooming ▪ According to Rich Relevance Survey: − 52% are open to receiving pop up offers on their mobile device, triggered when they enter a store − 43% would like to receive a digital coupon for a product they looked at but didn’t buy after leaving the store 50% 20% 13% 8% Uses consumer’s preferences – favourite shopping categories, brands, sizes Timeliness – when consumers are getting ready to purchase that item Location – when consumers are in the store or around the store Uses consumer’s name Most important aspects of personalization 186% Year-over-year increase in consumers who make purchase based on in-store text message or QR code scan 89% of consumers would sign up for mobile messages if they were personalized 18% of consumers frequently see personalization from retailers and brands Source: Vibes Mobile Consumer Survey 53 7
- 54. CONFIDENTIAL Beauty players are actively focusing on personalizing their mobile strategy ▪ L’Oréal’s luxury brand Kérastase made a move into the IOT with the world’s first smart hairbrush, to prove its innovation credentials and attract “hundreds of thousands” of new customers ▪ This will allow the beauty brand to communicate directly with consumers and provide “much more personalised marketing” ▪ It uses algorithms to score the quality of the user’s hair and to monitor the effects of different hair care routines ▪ An app that provides additional insights and customised product recommendations ▪ The product aims to drive traffic to salons, with certain treatments only available in store ▪ Benefit Cosmetics launched eyebrow-related invention, a mobile optimized site that details how users should style their brows, to promote its brow-shaping products and services ▪ It has planned to rolled out a range of services & promotions all in relation to eyebrows, to take advantage of the trending beauty theme ▪ The Brow Genie is mobile optimized and allows users to take or upload a selfie to the site where it uses face- mapping technology to decipher where and how the user’s brows should be shaped and styled ▪ The company has essentially put a department store makeup counter in the palm of every woman’s hand, with only their products stocked on the shelves 54 L’Oréal Benefit Cosmetics 7
- 55. CONFIDENTIAL “Hyper personalization” is growing rapidly Digital technologies, Omni channel growth and rising consumer expectations are driving hyper personalization across various industries Attribute Analysis uses a map to describe a customer, using demographic, physical, psychological, functional, professional, aspirational attributes. Each attribute is mapped to a product, service, or piece of communication which helps in making recommendations that go beyond product and service Event Sequence Analysis observes the sequence of events a customer goes through to understand the lead indicators for certain positive action or negative action Computational Techniques Clustering Bayesian Systems Timeseries Modeling Regre- ssion She works as a teacher in the local primary school She lives in St. Louis Television is her primary media influence They like traditional family sit down dinners She is a health freak Statistical Model She transacts at multiple stores Her average basket size is $45 She is Brand Loyal She lingers the longest in section which have promotions/offers On an average she spends 63 minutes per trip in the store Source: Wipro.com 55 7
- 56. CONFIDENTIAL Personalization Platforms 56 Adobe Cxense Evergage Google IBM Localytics Mixpanel Optimizely SAS Webtrekk 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 -1.0 0.0 1.0 2.0 3.0 4.0 5.0 6.0 DigitalIntelligenceUserExperience Digital Engagement Optimization Emerging players Majors Avg. deal size Forrester Key Engagement and UX Rankings Source: Forrester Wave: Digital Intelligence Platforms Q2, 2017, Pitchbook as of 12/14/2017. Note: Scale represents average deal size from a low of 0 to a high of 5.0. Score based on average of Forrester Digital Intelligence User Experience and Digital Engagement Optimization scores.. Score Company Employees Market Cap ($mn) 3.8 15,706 67,897.3 2.5 10,538 641.6 2.1 380,300 145,791.1 1.8 73,992 658,773.5 Score Company Employees Total raised ($mn) 4.3 85 26.3 2.8 400 146.2 1.9 212 77.0 1.6 88 35.1 1.0 138 48.7 0.9 201 59.7 Emerging platformsMajor platforms 8
- 57. CONFIDENTIAL Source: MatterMark Overview of personalization disruptors across sectors Big Data/Predictive/AI eCommerce Marketing Personalized UX Others TotalFundsRaised ` $20m $60m $40m $80m $100m $120m+ Seed 57Acquired Companies 8
- 58. CONFIDENTIAL 58 Conclusions ▪ For retailers: − Personalization is an effective tool to increase your yield on marketing and ecommerce platform investments – the big question is which subsectors within personalization should be your focus – as today the sector remains fragmented ▪ For investors: − 2018 will be a year of continued “hyper growth” for many personalization players. That said, not all will be suited to scale into a platform eligible for a major acquisition. Investment decisions should focus on both a “niche solution” takeout scenario and the potential for continued investment (and potentially acquisition of smaller personalization players) ▪ For personalization vendors: − As personalization becomes an increasingly hot topic for retailers, expect the major platform/suite providers to both offer their own solutions and acquire best of breed solutions − Expect that in 2019, the industry will begin to mature with a limited number of independent pureplays competing against marketing suites as well as major platform players
- 60. CONFIDENTIAL Value Proposition Unique, Focused, Global, Strategy and Investment Banking Boutique Recent transactions completed or underway in the United States, Japan, China, Singapore, Argentina, UK, Sweden, Belgium, France, Germany $2B revenue Japanese ecommerce BPO company #3 Russian internet company #1 UK ifsnternet company Multiple private B2B ecommerce systems integrators Selected ComCap Clients #1 Asian ecommerce B2B company $200M rev US public company Multiple US and EU private equity funds Many ecommerce SaaS companies Previous Clients Sakshi Goel Associate Back office Team Shiv Ng PPG Sabeeh Mohsan Analyst Charlotte Brook Administration and Ops Selected Team Members Experience Education Location Fermin Caro Director US 14 years Credit Suisse SVB Capital Yale MBA San Francisco Aron Bohlig Managing Partner Global 23 years Credit Suisse Become, Nortel Wharton MBA San Francisco Steve Terry Managing Director Software 20 years Credit Suisse Battery Ventures Robertson Stephens McCombs School of Business MBA San Francisco Matt Nemer Senior Advisor B2C 20 years Wells Fargo Securities Thomas Weisel Vanderbilt San Francisco Swetha Vijay Director Asia 9 years DBS, Deloitte Avista/Houlihan Lokey IIM Ahmedabad MBA Singapore ComCap – A leading boutique at the intersection of capital and commerce 5 years Ultra Capital Wells Fargo Securities University of Southern California San Francisco Collin Rice Associate US 60 Carlos Gonzalez Director Europe 10 years IGC Holdings LEK Consulting Wharton Stanford Moscow I London
- 61. CONFIDENTIAL Onsite Search 61 eCommerce SaaS and Services market map Feed management Social eCom Platform Reviews PIM Logistics Software OMS International Fulfillment Mobile Payments Payment Gateways Call Center Logistics/FulfillmentPayments BPO Cross Channel Campaigns Loyalty / Rebates Search Sites & SEM Vendors Affiliate Networks Marketing and Analytics Retargeting Comp Shopping Email Suites Consumer Traffic Analytics Content Management Data and Data Quality Marketplaces Email Service Providers Marketing Agencies Personalization Infrastructure Systems Integration
- 62. CONFIDENTIAL 62 Financial and corporate investors US Stage agnostic Buyout / Alternate Early stage Late stage Corp. VC International