THE FUTURE FOR RETAILERS ONLINE IN AUSTRALIA

Presented by: Robert Wong, CEO , CCMEDIA

Robert Wong – CEO

Case Study– Catalogue Central Database

Development Some Australian households receive in excess of 40 kilos of paper a year. There are around 6 million reachable households in Australia.

On average less than 20% ever get read (Roy Morgan Single Source)

It’s not junk if it’s relevant

Case Study– Catalogue Central Database

Development How to tell people about the service and keep them coming back?

Content is a given.

Soon realised, we needed a permission database to allow us to remind them that their nominated brands had new offers.

We tried press, TV, radio and online, but it was the affiliate networks that we found to be most successful for database development.

Case Study– Catalogue Central Database Development

Affiliate partners were consistently the most effective because they were online, committed to results, offered strong and diverse reach without cross over, and a variety of creative options.

We worked strongly with the affiliate networks to ensure creative was effective.

Catalogue Central and Stylehunter.com database is now over 260,000

The future of Retailing Online - Our Immediate Past

The online retail market until recently in Australia has been the domain of niche businesses  and small e-tailers (often who have developed from eBay garages.

The biggest business are no more than one or two major retailer stores. ( $M 0-80,000), but there is traction.

Why Large Retailers are cool on e-tail It’s small potatoes.

Why Large Retailers are cool on E-tail Too hard to manage:

Franchise relationships Distribution of stock Computer systems People/Capabilities Small revenue, difficult to implement Besides – sales have been good.

Market Dynamics – Australia Specific: Population concentration around major cities

Westfield 8,000,000 weekly visits. Low product differentiation (China effect)

Why Big retailers are warming to online as an alternative media.

Decline in Traditional Media Consumption Newspapers/Magazines/TV/Radio/Direct

Mail/Directories

Small advertisers have been switching budgets to online directories and search.

The Rise of online as a Retail Advertising media. Rising in Internet consumption and audience growth.

Google, You tube, Facebook, blogs, Twitter, everywhere in diverse locations and interests.

Over 80% of broadband users use the Internet as a primary source of product information, from multiple devices. ACRS Google Study 08.

Broadband is an essential service – newspapers are not.

Online advertising is growing in share.

Internet advertising now accounts for 12% of all advertising share. $12b Ad market. (Not including the $2b catalogue market)

Mature online spend for property, motor, finance, telco, employment,

but not retail - yet

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Why Big retailers have been cool on Internet Advertising

Online Brands like oo.com.au are not being challenged from major retailers for online eyeballs

Adding in estimated $2b catalogue spend and POS advertising, online spend by major retailers is weak.

Why Big retailers have been cool on Internet Advertising

Retail was doing okay up until October 08. Website sales are not important, so internet

advertising is waste of time. “Banner ads don’t give the “bang” like a full

page ad or 24 page catalogue. We need to drive store traffic”

Big portals owned by traditional media players, so zero sum game unless forced.

Perceived difficult to deliver mass campaign reach due to fragmentation of online networks.

But there is clear evidence Big Retailers are looking at online.. CC revenue growth is 80% up YOY. JB HiFi regularly use search and the

Adconian Network Harvey’s dabbled in Dec 08. Clive Peeters Angus & Robertson Good Guys Freedom Myer

So what’s the Online future for Retail and for Affiliates

Retailers will adopt significantly more online advertising strategies as they learn it’s potential and technology enables better ad formats to be served and better access to broad reach through multichannel network buys.

Online sales will develop, but will be slow and hard for major retailers. Focus will be on database development, driving store traffic efficiently and more accountability. Aggregated distribution and fulfilment centres will evolve.

Affiliate and content sites that have core and regular audiences will attract significant advertising dollars from retailers as they realise the value of online eyeballs. Retailers will bring significant budgets allowing affiliates to capture budget that will be shifted from slowly declining traditional media.

If 10% of retail advertising budgets are moved online the industry has new money in excess of 500,000 million to compete for.

Consumers will eventually shy away from being on multiple retail databases, because retailers will over communicate.

Key Points There is significant underdeveloped opportunity for major

retailers is to use online as an advertising channel to drive both off and online sale activity.

E-tailing will grow, but be slow and difficult for major retailers. Pure play e-tailers will do well, but hit growth limits.

Consumers will not want to be on multiple retailer email databases ensuring plenty of competition for eyeballs residing on affiliate content sites.

Website publishers and affiliates who attract regular quality traffic, will attract advertising dollars from major retailers if they are networked and offer flexible content serving.

Thank you..

Robert Wong – CEO Robert.wong@cataloguecentral.com.au Mobile: 0419 238768 www.ccmedia.com.au

Please contact me personally if you have any questions.