Consumer To Business E-Commerce Presentation

Consumer To Business E-Commerce Presentation

Consumer To Business E-Commerce Presentation Youre Just a Few Clicks Away... ...From Consumer Bliss Joe Statum III Stacy Kelley Jim Hughes MS480 - 2003 1 Overview What and Who is Business-toConsumer E-commerce?

How Big is It, Where is it Headed? Demographics Tax Implications Security & Impact of September 11 What has it Done for You Lately? 2 Quiz Questions What/who is quixtar.com Country with Highest percentage of athome internet use On-Line Industry

Hardest hit by Attacks of September 11 3 What is Business-toConsumer E-commerce? In the broadest terms... Business-to-Consumer Ecommerce could be defined as transactions and interactions between consumers and businesses where some part of the exchanges are conducted over the internet. 4 Who Makes up the Business-to-Consumer ECommerce Market Segment? Traditional Hybrid Retailers E/Retailers

Borders Pottery Barn ToysRUs Sears Home Depot Kmart Talbots Merrill Lynch

Lands End Gateway L.L. Bean Grizzley Scwabb Pure ETailers Amazon E-bay Travelocity Dell

Martha Stewart Hugger Mugger Datek Online Et al. 5 Top 20 Internet Retailers eBay (ebay.com) Amazon.com (amazon.com) Dell (dell.com)

Buy.com (buy.com) Egghead.com (egghead.com) Gateway (gateway.com) Quixtar (quixtar.com) uBid (ubid.com) Barnes & Noble (bn.com) Cyberian Outpost (outpost.com) 6 Top 20 Internet Retailers* (continued)

Value America (va.com) MicroWarehouse (microwarehouse.com) Office Depot (officedepot.com & vikingop.com) eToys.com (etoys.com & babycenter.com) Lands End (landsend.com) The Spiegel Group (spiegel.com, eddiebauer.com, & newport-news.com) Fingerhut (fingerhut.com, andysauctions.com, & andysgarage.com) CDW (cdw.com) JCPenney (jcpenney.com) Gap (gap.com) *Internet.com (9/25/01) 7 How the Internet is used for Shopping How internet is Used for Shopping Shop Online,

51% Purchase Offline Shop Online, 40% Purchase Online Shop Offline, 9% Purchase Online 8 How Big is Business-toConsumer E-commerce? Worldwide, GarterG2 expects 2001 online holiday shopping sales to reach $25.3 billion this year, a 39 percent increase over last year, despite an uncertain economic climate. In the US, more than 106 million people will

shop online in December, and they will spend a record $9.9 billion during the holiday season, an increase over last year's $6.9 billion, according to Nielsen//NetRatings and Harris Interactive. 9 Where has it been and? 10 Forrester Online Retail Index http://www.forrester.com/NRF/1,2873,0,00.html . Where is it headed? Projected Worldwide E-Commerce Growth*

http://www.forrester.com/ER/Press/ForrFind/0,1768,0,00.html *Both B2B and B2C 11 E-Commerce Sales US retail E-commerce sales for the second quarter of 2001 were $7.5 billion An increase of 24.7% from the second quarter of 2000 Total retail sales increased 3.8% from the second quarter of 2000 12

What Makes up the Businessto-Consumer Market Segment in US Top Online Spending Categories November and December 2001 Online Spending(in millions) Category Estimated Apparel $2,445 Books/Music/Video $1,696 Auctions $1,364 Toys $1,053 Computer Hardware $973 Source: Nielsen/NetRatings and Harris

13 US E-Commerce Retail Quarterly Results $10.000 $9.000 $8.000 Billions of Dollars $7.000 $6.000 $5.000 $4.000 $3.000 $2.000 $1.000 $0.000 1999-4th Qtr 2000-1st Qtr 2000-2nd Qtr 2000-3rd Qtr 2000-4th Qtr 2001-1st Qtr 2001-2nd Qtr Series1

$5.266 $5.526 $5.982 $6.898 Year/Quarter $8.881 $7.592 $7.458 14 Total Spent on US On-Line Retail Sales-June, July, August & September (1000s) June

Apparel $217,611 Books $136,567 Music $107,484 Software $101,288 Office Supplies $119,704 Videos $91,207 Linens/Home$62,376 Dcor Jewelry $84,339 Footwear $51,317 Flowers $40,168 July $224,743

$151,561 $118,318 $112,759 $82,716 $109,814 $72,479 $88,198 $67,656 $38,777 August $262,642 $202,494 $124,185 $121,727 $108,375 $92,582 $82,344 $76,999 $71,880 $37,922

September $288,420 $183,288 $136,408 $136,031 $109,059 $100,636 $97,013 $97,671 $86,589 $52,753 15 Retail Sales Graphic Comparison (June, July, August & September) 1000s $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000

September August July June $0 Apparel Books Music Software Office Supplies Videos Linens/Home Dcor Jewelry Footwear Flowers 16

Size of Business-to-Consumer Market Segment Worldwide Worldwide Internet Retailing Sales Forecast Estimate for Fourth Quarter 2001 Billions of U.S. Dollars) Q4 2001 Region Revenue North America Europe Q4 2000 Percent Growth

Revenue 11.86 Market Share 46.9 9.13 Market Share 50.1 8.58 33.9 6.15 33.7

39.6 AsiaPacific Japan 2.46 9.7 1.60 8.8 53.4 1.40 5.5 0.83 4.6

68.0 Rest of World Total 0.99 3.9 0.52 2.9 90.1 25.29 100.0 18.23

100.0 38.7 30.0 Notes: Figures in millions and exclude travel-related purchases and movie and event ticket sales. Source: GartnerG2 17 Worldwide Internet Retailing Sales Forecast Estimate for Fourth Quarter 2001 Billions of U.S. Dollars) Worldwide Projected Online E-commerce 12 North America 10

Europe Asia-Pacific 8 Japan 6 Rest of World 4 2 0 Q4 2000 Revenue Q4 2001 Revenue Notes: Figures in millions and exclude travel-related purchases and movie and 18

event ticket sales. Source: GartnerG2 Demographics 19 Demographics In US there are over 168 million Internet Users Expanding online population is an opportunity and threat to Ecommerce vendors 20 Worlds Online Population Internet Universe by Country At-home users, July 2001

Current Internet Active Internet Sessions Time Spent Universe Estimate Universe, July 2001 per Month per Month Global 426,491,303 236,258,612 18 9:36:12 United States 165,180,807 102,077,288 20 10:19:06 Japan 45,659,923 20,061,849 19 9:27:04 Germany 27,914,911

15,144,455 17 7:49:23 South Korea 26,590,004 13,098,235 13 19:20:17 United Kingdom 23,870,341 13,098,235 13 6:22:21 Italy 18,697,197 8,321,314 12 5:48:17 Canada 14,445,047 8,754,653 19

9:36:12 Brazil 11,937,559 6,038,867 13 8:10:48 Taiwan 11,602,523 5,021,109 13 8:04:21 France 11,107,974 5,468,447 15 6:58:58 Australia 9,674,157 5,640,427 13 7:41:43 Netherlands

8,671,316 4,526,370 15 6:44:11 Sweden 5,543,193 3,048,001 12 5:29:16 Source: Nielsen//NetRatings 21 Worlds Home Online Population Top 30 Countries Percent Home Internet Users of Total Population 70% 60% 50% 40%

% Users of Total Population 30% 20% 10% United Kingdom New Zealand Canada Switzerland Australia Singapore Taiwan Netherlands

Denmark South Korea Norway Hong Kong United States Sweden 0% 22 Worlds Home Online Population Top 30 Countries cont. Percent Home Internet Users of Total Population

40% 35% % Users of Total Population 30% 25% 20% 15% 10% 5% Finland Austria Japan Belgium

Germany Ireland Italy Israel France Spain Argentina Global Brazil South Africa Mexico

0% 23 Worlds Online Gender Distribution Internet Audiences by Gender 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% Germany France Italy Spain

Belgium Netherlands Brazil UK Australia 0.0% Canada Percent Percent Country Male Female Germany 63.40 36.60 France

61.88 38.12 Italy 60.91 39.09 Spain 60.88 39.12 Belgium 60.60 39.40 Netherlands 59.81 40.19 Brazil 59.71 40.29 UK 57.17 42.83 Australia 51.57

48.43 Canada 49.00 51.00 United States 47.28 52.18 Percent Females Percent Males United States At-home users, June 2001 Source: Nielsen//NetRatings 24 Race Does Matter US Department of Commerce found: A child in a low-income White family is three times more likely to have

web access than a low-income Black child and four times more likely than a low-income Hispanic family 25 Race (cont.) 26 Income The average online household annual income is 50% higher than average nonuser 27

Age 65% of those under age 30 have internet access. Age 18 to 30 age group is the most active online users. By 2004 almost 91% of this group will be online 28 Age The Senior Years 87% of those 65 and over do not have

internet access Seniors that are active on the Internet spend more time online Adults 55 and older represent the fastest growing group of Internet users Ages 45-64 years old is one of the most desired Internet markets 29 Internet Tax Freedom Act Internet Tax Freedom Act- passed by Congress October 1998 Establishes a moratorium on direct and indirect state or local taxes on the Internet or interactive computer services or the use of

those services. 30 State Revenues that could be generated from an Internet tax This year State and local governments will lose $13.3 billion An estimated $45.2 billion loss in annual revenue in 2006 and $54.8 billion by 2011 31 Reasons for Internet Tax

Toll on State Revenue Government should not be in position of creating incentives to buy online Uneven Playing Field for Offline retailers E-commerce has advanced Based on what you buy not where you buy 32 Other Interesting Facts About E-Commerce Sales

Average amount spent per person June: $247.00 July: $270.00 August: $273.00 September: $262.00 Number of households shopping on-line June: 13.1 million

July: 14.7 million August: 14.8 million September: 15.2 million 33 September 11 and Security 34 September 11, 2001 Impact on Business-to-Consumer ECommerce Sales 35 News Traffic vs. ECommerce Visitors to news sites 1 week prior to attacks: 6 million daily 1 week after attacks: 11.7 million daily

ABCNews.com- 360% daily increase in daily visitors to news site Sales volume before and after attack Immediately following attack-complete halt As of 9/24/01-97% of normal sales volume 36 Top News Sites in Wake of September 11 Attacks

CNN.com MSNBC.com ABC News CBS.com sites NYtimes.com WashingtonPost.com Slate.com USAToday.com 37 For E-Commerce: A return to Normalcy! Week ending 10/21/01: Internet sales 7% below average week observed during the 5 months prior to the September 11th attacks. Entirely attributable to the continued softness in one area..

38 Hardest Hit: Travel Sector Travel Sector Sales remain approximately 17% Below Pre-Attack Levels 39 Travel Sector News Priceline.com expected $341 million 2001 revenues - changed to $280-$300

million. Expedia.com-travel bookings had declined 60-65% as of 9/19/01. Travelocity-travel bookings had declined approximately 50% as of 9/19/01. 40 Analysts Predictions 2001 Online Travel Industry forecast lowered to 25% growth from 35-40% previous to attacks. 2002 forecast lowered to 15-20% growth from 25-30% previous to attacks. 41 Security of E-Commerce KPMG surveyed 1250 Large Companies In 12

Countries* When a security breach occurred 83% reported no legal action was pursued because: Inadequate Legal Remedies Available Loss Not Quantifiable No possibility of recovery Lack of evidence Other reasons * KPMG 2001 Global [email protected] Survey 42

Security of E-Commerce KPMG surveyed Large Companies Countries* In 12 Less than 35 % had security audits performed on their ecommerce systems Only 12% reported their web site bears a seal identifying their web site has passed a security audit. 88% reported the public perceives the brick and mortar businesses to be were more secure and less prone to fraud than ecommerce dot.com companies, yet only 9% reported a security breach had occurred in the last 12 month. (There is evidence these events are under reported.) National and Geographic Boundaries are non-existent in ecommerce - Security related risks affect businesses in all regions

* KPMG 2001 Global [email protected] Survey 43 What has it Done for You Lately? Demonstrations Lands End / Virtual Model Staples E-bay 44 landsend.com myvirtualmodel.com 45 Lands End Summary

Revenues $1.5 Billion Income $52.8 Million % Margin 3.30% Model Direct Merchant Employees 4,700 $/Associate $319,150 46 47 48 49

staples.com 50 Staples Summary Revenues $10.674 Billion Income $60 Million % Margin .50% Model Traditional Merchant Employees 48,458 $/Associate $361,836 51

52 ebay.com 53 ebay Summary Revenues $582.4 Million Income $84.7 Million % Margin 14.50% Model Auction Employees 1,927 $/Associate $302,023

54 55 56 Quiz Questions What/who is quixtar.com Country with Highest percentage of athome internet use On-Line Industry Hardest hit by Attacks of September 11

Prize Dishwasher Philips Color Printer Washer & Dryer 57 Questions? 58 References

ComScore Networks-Reston, VA (10/26/01) Internet.com (9/24/01 & 9/27/01) Goldman Sachs Analysts-Internetnews.com (9/19/01) Internet.com (9/25/01) Cyberatlas.internet.com (10/02/01) E-commerce.times (11/05/01) emarketer.com (5/28/00) emarketer.com (5/22/00) cyberatlas.internet.com (10/29/01)

cyberatlas.internet.com (10/29/01) U.S. Department of Commerce News (8/30/01) Russell Reynolds Associates (10/27/01) www.stores.org 59

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