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Al McClainCEO, Co-founder, RetailWire

Al McClain has spent 30+ years in the retail, tech, and CPG spaces. Al's career highlights include sales and management stints with Luzianne-Blue Plate Foods, Bestfoods, Red Rose Tea, and Progressive Grocer (Trade Dimensions and Retail Insights divisions).

Al has also spoken extensively at industry events for the National Grocers Association, the Institute for International Research, the Magazine Publishers Association, and the Category Management Association. He has written for publications such as Nielsen Wire, Loyalty Management, and Forbes.com.

Moderating

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Presentation (25 min)

Online marketplaces and their growing impact• Ken Cassar, VP, Principal Analyst, Slice Intelligence

Panel discussion (20 min)

• Ken Cassar, VP, Principal Analyst, Slice Intelligence• Kiri Masters, Founder and CEO, Bobsled Marketing

Audience Q&A (10 min)

Today’s agenda

Ken CassarVP, Principal Analyst, Slice Intelligence

Ken oversees Slice's research agenda, identifying and contextualizing e-commerce industry trends from Slice's panel of over 4 million U.S. online consumers.

Ken brings a rich online retail background to Slice Intelligence. Most recently, he was the senior vice president, media analytic solutions at Nielsen, where he developed several innovative digital commerce measurement and advertising effectiveness solutions.

Prior to Nielsen, Ken was an analyst at Jupiter Research, where he was an early thought leader, trusted adviser and media source on e-commerce. His prescient outlook on fledgling e-commerce industry was a key contributor to Jupiter’s dominance as a digital media zeitgeist at the dawn of the Internet.

Our presenter

Slice Intelligence confidential. Do not copy or distribute without prior written consent.Slice Intelligence confidential. Do not copy or distribute without prior written consent.

online marketplaces and their growing impact September 20, 2017

Slice Intelligence confidential. Do not copy or distribute without prior written consent.

• marketplaces 101

• Nike & Amazon: a complicated relationship

• introducing Acumen Marketplace

• a Reckitt Benckiser case study

• closing thoughts

agenda


where does Slice get its data?

8

• who made the purchase

• what was bought

• where it was bought

• when it was bought

• how much was paid

• how quickly it was shipped

largest consumer

e-commerce

purchase panel in

the world

passive tracking of

e-commerce sales from

consumer inboxes

across all platforms

longitudinal tracking of

the consumer, with

two years of history

we know:

Slice Intelligence confidential. Do not copy or distribute without prior written consent. 9

Slice is the standard in e-commerce measurement


commerce circa 1930


commerce circa 1990


commerce in 2017


what is a marketplace?

14

• type of e-commerce site where product or service information is

provided by multiple third party merchants

• transactions are processed by the marketplace operator

• delivered and fulfilled by the participating merchants or

marketplace operator

pure marketplaces hybrid marketplaces


marketplace is at the core of Amazon’s ‘flywheel’ strategy

18

customer

experience

traffic

sellers

selection

growth

lower priceslower cost

structure


why would retailers sell on competitors’ marketplaces?

19

Amazon

59%Google

20%

somewhere

else

21%

where do you start when shopping online?

and secondarily…

→ highly qualified opportunities

for exposure

→ easy integration with

fulfillment

→ pay for transactions, not for

brand development

source: Internet Retailer


marketplaces are a charged environment for brands

20

+ broader product

assortment

+ direct selling

opportunities

- lose pricing control

- risk of fraudulent

product

- risk of brand

degradation

pluses minuses

+-

+

+ +

+

++

+

+ -

--

--

+


Walmart.com’s marketplace has expanded assortment and helped grow revenue

6.1%7.3%

9.3%

13.0%

15.6%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017

Walmart.com marketplace % of sales

Chart source: Slice Intelligence, Jan 2016 – Jan 2017.

10M items

50M items


marketplaces represent a significant chunk of sales across categories, across merchants

marketplace penetration by category – Jan. 2016 – Jun. 2017

22


like many other brands, Nike refused to sell to Amazon

24

• concerns about price

control

• concerns about counterfeit

products

• concerns about brand and

product commoditization

• desire to drive Nike.com

sales


similarly, Nike and Walmart.com do not have a wholesale relationship

25


yet, Nike is the leading sneaker brand on Amazon and Walmart

26

share on Amazon

Adidas Nike Puma Reebok Under Armour

share on Walmart.com

Adidas Nike Puma Reebok Under Armour

44% 76%


what’s going on?


marketplaces have filled the gaps where wholesale relationships don’t exist…

28

0% 20% 40% 60% 80% 100%

Adidas

Nike

PUMA

Reebok

Under Armour

direct v marketplace sales

Amazon: Jan ‘17–Jun ‘17

Direct Marketplace

0% 20% 40% 60% 80% 100%

Adidas

Nike

PUMA

Reebok

Under Armour

direct v marketplace sales

Walmart: Jan ‘17–Jun ‘17

Direct Marketplace


…and this is a trend that is not abating

29

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1/4/16 2/4/16 3/4/16 4/4/16 5/4/16 6/4/16 7/4/16 8/4/16 9/4/16 10/4/16 11/4/16 12/4/16 1/4/17 2/4/17 3/4/17 4/4/17 5/4/17 6/4/17

direct v. marketplace sales on Amazon

Adidas, Nike, Puma, Reebok, Under Armour

Direct Marketplace


finally, Nike capitulated

30

Nike will start selling sneakers

through Amazon


so why did Nike come around?

31

online footwear sales

(Jan – July 2017)

Amazon all other merchants


illuminate the biggest blind spot in the online channel

gain a complete understanding of your buyer base with data from

direct sales vs. third-party sellers

identify the products driving buyers to shop third-party vs. direct

understand the volume of sales driven by third-party sellers

uncover which third-party sellers are selling your products

AcumenMarketplace


let’s take another example

33


Reckitt Benckiser and Amazon have a strong wholesale relationship

34


…as do Reckitt Benckiser and Walmart

35


1. Air Wick, Clearasil and Durex

brands are big online sellers

with heavy Amazon

marketplace composition

2. Dettol sales are almost

exclusively through

marketplaces

3. Gaviscon’s sales on Amazon

are largely marketplace,

while sales on Walmart and

Jet are largely first party

however, marketplaces constitute a significant portion of RB sales on Amazon and Walmart

findings


Amazon’s marketplace accounts for a growing share of Finish sales on Amazon

38


1. Finish All In 1 Powerball tabs

dominate top first party items

on Amazon, while Quantum

Max is a more significant

part of the mix on the

Amazon marketplace

2. leading marketplace items

are not underpricing Amazon

first party pricing

findings

$.21/tab$.15/tab

$.21/tab$.19/tab

top first party v. third party items sold


The Saving’s Depot accounted for the largest share of marketplace volume for Finish in August

40


they seem to be well-regarded by Amazon shoppers

41


how does Finish compare with competitive brands?

42


the Finish brand is lighter on marketplace sales than any of its automatic dishwashing competitors

43


perhaps The Go-To Store, top marketplace seller of Cascade, warrants some investigation as well

44


the findings here suggest that collaboration with marketplace sellers warrants consideration

45

outreach to The Saving’s Depot

1. make sure they’re selling legitimate product and consider selling to

them directly

2. see if they’re interested in carrying other key items that Amazon is

not taking inventory of

3. send cease-and-desist letters if they’re not legitimate

repeat with

Habitat Unionrepeat with

The Go-To Store

repeat with

The Go-To Store

sell directly on

Amazon’s

marketplace

encourage Amazon to

expand their selection of

Quantum Max


whatever your view of marketplaces, they’re here to stay


• overt hostility to all marketplace vendors is not advisable

• brands need to have a marketplace strategy rooted in data

• identify new wholesale partners to round out brand assortment

in key retail marketplaces

• identify illegitimate sellers

• consider selling some of your products directly on marketplaces

where retailers are unwilling to take inventory

• employ marketplace data to support negotiations with retailers

closing thoughts

47

thank you

48

www.sliceintelligence.com

Slice information

[email protected]

follow Slice Intelligence on Twitter

@SliceIntel

follow Ken on Twitter

@Kcassar

mailto:[email protected]

Panel discussion: Online marketplaces

Ken CassarVP, Principal Analyst

Slice Intelligence

Al McClainCEO

RetailWire

Kiri MastersFounder and CEOBobsled Marketing

Kiri MastersFounder and CEO, Bobsled Marketing

Bobsled is a digital marketing agency that helps established consumer product brands grow and protect their sales on the Amazon marketplace.

Launched in 2015, Bobsled Marketing has worked with over 100 brands to launch on Amazon, optimize their product presence, PPC (advertising) campaigns, as well as manage operational aspects around fulfillment, fees, and unauthorized sellers.

Kiri grew Bobsled as a solo consultant in 2015 to a team of 15 Amazon specialists today, who manage millions of dollars in monthly sales for Amazon Vendor and Seller accounts.

Before her career in e-commerce, Kiri was in the commercial banking world in New York at JP Morgan Chase.

BrainTrust panelist

Audience Poll Question

In your opinion, was Nike wise to make the decision to sell directly through Amazon?

QUESTION #1:Of the common misconceptions that brands have about marketplaces, which do you think is the most self-defeating?


Ken Cassar Kiri Masters Al McClain


To what extent are major brands losing control of pricing on the big online marketplaces?

QUESTION #2:In coming years, do you expect brands to regain leverage in the tussle with marketplaces over pricing control and presentation? Or will they cede more control to marketplaces?




Do you personally favor buying directly from a marketplace operators vs. getting fulfillment via third parties?

QUESTION #3:How savvy are consumers about fulfillment through the marketplace operator vs. third parties? Do you see different generational groups being more conscious of the differences?




Agree or disagree? The growth of third party marketplace sales should signal brands to focus more on product distinctions vs. price.

QUESTION #4:When launching a new brand or product line, how important is it for brands to push for direct wholesale relationships with Amazon and Walmart.com vs. allowing third parties to list them in marketplaces?



Audience Q&A

Ken CassarVP, Principal Analyst

Slice Intelligence

Al McClainCEO

RetailWire

Kiri MastersFounder and CEOBobsled Marketing

Your questions for the panel...

thank you

60

www.sliceintelligence.com

Slice information

[email protected]

follow Slice Intelligence on Twitter

@SliceIntel

follow Ken on Twitter

@Kcassar

mailto:[email protected]

For more information

For RetailWire:

Al [email protected](561) 627-4974

For Bobsled Marketing:

Kiri [email protected](646) 561-9936

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