ECOMMERCE & CLIENT SERVICES
SUMMARY 1. A STRATEGIC DECISION 2. REINTEGRATING ECOMMERCE WHILE SETTING UP THE OMNICHANNEL FOUNDATIONS 3. CLIENT SERVICES ECOMMERCE & CLIENT SERVICES 2
IN 2012 WE CREATED A JOINT VENTURE WITH A WORLDWIDE PUREPLAYER TO ACCELERATE OUR ECOMMERCE… COMMUNICATIONS MERCHANDISING CREATIVE DESIGN & MARKETING ROADMAP BUSINESS USER MANAGEMENT INTELLIGENCE EXPERIENCE TECHNOLOGY LOGISTICS INVOICING Back-end info-structure In-bound & Out-bound Acquiring & Frau d Front-end development Packaging Omnichannel services … ACHIEVING GREAT RESULTS ECOMMERCE & CLIENT SERVICES 3
…. AND NOW WE ARE EVOLVING FROM MULTICHANNEL TO OMNICHANNEL EXPERIENCE ONLINE MARKET STORE PLACE CLIENT OMNICHANNEL MULTI- CHANNEL SOCIAL STORE CLIENT SERVICES MULTICHANNEL OMNICHANNEL • Customers experience a brand and not a channel • Customers see multiple touch-points act independently within a brand • Each channel is operated in a silo • Brands leverage their “single view of the customer” in a coordinated and strategic way ECOMMERCE & CLIENT SERVICES 4
SUMMARY 1. A STRATEGIC DECISION 2. REINTEGRATING ECOMMERCE WHILE SETTING UP THE OMNICHANNEL FOUNDATIONS 3. CLIENT SERVICES ECOMMERCE & CLIENT SERVICES 5
A HIGHLY COMPLEX PROGRAM… 5 72 > 300 70 BRANDS COUNTRIES STAKEHOLDERS EXPERTS 6 33 14 19 AMER EU APAC ROW ECOMMERCE & CLIENT SERVICES 6
… INCLUDING SETTING UP NEW SYSTEMS, PROCESSES AND TEAMS… 1 2 3 4 5 B2C & ECOMMERCE INVOICING CHANGE CHINA OMNICHANNEL PLATFORM OPERATIONS Central & local Real-time integration Secured payment Target organization Local Ecommerce warehouses Customer 360° view Tax management Impact analysis platforms BtoC fulfilment Ecommerce Platform Fraud management Stakeholder Local invoicing Stock optimization Order Management Legal Compliance management processes Ship from store System Communications Local operations Carrier management New product referential Training Digital asset management ECOMMERCE & CLIENT SERVICES 7
… TO PROPOSE AN ENHANCED EXPERIENCE TO OUR CUSTOMERS VIA… FULL DATA INTEGRATION CONSISTENCY ACROSS CHANNELS BETWEEN ONLINE & OFFLINE Online store ORDER IN STORE One omnichannel account per customer Client allowing a 360° data view Store CLIENT Services .COM WEBSITES SERVICES 1 2 ACCESSING A WIDER MORE DELIVERY SERVICES INVENTORY & ASSORTMENT 4 3 Ship from store Local Future DC inventory DC fulfilment (pre-order) Local Global DC DC Pickup Inventory (DC inventory) Shops Pickup (Store inventory) ECOMMERCE & CLIENT SERVICES 8
…. LEVERAGING KERING DISTRIBUTION CENTERS AND STORE NETWORK… GLOBAL DISTRIBUTION CENTER LOCAL DISTRIBUTION CENTERS Global reach Fulfil only to the country they are based in ECOMMERCE & CLIENT SERVICES 9
CHINA: A DIFFERENT ECOSYSTEM REQUIRING DIFFERENT SOLUTIONS… DISTRIBUTION LANDSCAPE INVOICING/PAYMENT OPTIONS Marketplaces Specific payment methods Social commerce Invoicing VAT Fapiao, VAT special Fapiao, e- Fapiao… LOCAL OPERATIONS PLATFORM SPECIFICITIES Social login: integration to local solutions Personal data: Local inventory must be stored in China (Cybersecurity law) Local carriers to cover all tier cities Product content High service level expectations ECOMMERCE & CLIENT SERVICES 10
….RESULTING IN PARTNERING WITH LOCAL SPECIALISTS AND BUILDING A LOCAL TEAM OF EXPERTS LOCAL LOCAL INVENTORY PLATFORM AND DISTRIBUTION LOCAL HOSTED IN CHINA CENTER IN SHANGHAI LOCAL TEAM PAYMENT METHODS OF EXPERTS & INVOICING PROCESSES INTEGRATED TO LOCAL MARKETPLACES CARRIERS ECOMMERCE & CLIENT SERVICES 11
ECOMMERCE INTERNALIZATION TIMELINE BRANDS GO-LIVES 2018 2019 2020 Test, Migration Rollout Global design Roadmap & Training & Hypercare Iterative implementation OCT NOV Q1 Q2 Q3 ECOMMERCE & CLIENT SERVICES 12
OMNICHANNEL BOOSTING ECOMMERCE REVENUE LEVERS • Ship from store (larger assortment and faster delivery) DIRECT • Improving depth and breadth of assortments available for sale INCREMENTAL • Inventory optimization to reduce shortages (inventory transfer, quicker replenishments etc.) SALES • Remote sales from stores and Client services order from ecommerce inventories • Fraud and payment optimization (acceptance rules + new payment methods) • Integration within our ecosystem: customer centric approach in-house, single data lake INDIRECT IMPACT • Internalization of Roadmap allowing multiple enhancements and evolutions ON SALES • Unified omnichannel set-up across all brands and all CRM & communications activities • Insourcing key ecommerce competencies ADDITIONAL BUSINESSES • China local business solution ENABLED BY • Marketplace integration facilitator IMPLEMENTATION OF NEW TOOLS ECOMMERCE & CLIENT SERVICES 13
FINANCIAL IMPLICATIONS NEUTRAL IMPACT ON EBIT AT GROUP LEVEL IN 2021 / ACCRETIVE TO EBIT MARGIN FROM 2022 GROUP IMPACTS Direct Opex: Replacing variable revenue share Revenue with lower direct costs Gross Margin Central costs: Replacing independent JV (% of revenue) structure with dedicated Kering Omnichannel team Fulfillment & Shipping costs D&A: some depreciation vs. none in previous (% of revenue) situation Marketing costs & Contact center (% of revenue) Direct operating expenses (% of revenue) Replacement of revenue share by a combination of lower direct opex and fixed costs of dedicated Central costs (finance, omnichannel structure technology, digital and media) Depreciation and amortization (% of revenue) Revenue uplift and operating leverage will be NEUTRAL IN 2021 accretive to Group EBIT margin from 2022 EBIT (% of revenue) ACCRETIVE FROM 2022 ECOMMERCE & CLIENT SERVICES 14
IN A NUTSHELL… FROM TO UNINTEGRATED PLATFORMS A SEAMLESS EXPERIENCE, & POINTS OF CONTACTS FROM AWARENESS TO PURCHASE Limited Multichannel services Seamless integration across Web & Retail Larger product assortment Differences in product assortment leveraging retail & online inventory between online & offline OMNI- CHANNEL Separate stock between online & offline Real-time inventory view in store across all channels EXPERIENCE Broader range of order, payments (e.g. Alipay) Smaller range of order & delivery methods & delivery methods Greater item return/exchange flexibility One global omnichannel account per customer Less customer data consistency Enriched and customizable online experience ONLINE MARKET STORE PLACE CLIENT MULTI- OMNICHANNEL CHANNEL SOCIAL STORE CLIENT SERVICES ECOMMERCE & CLIENT SERVICES 15
CLIENT SERVICES HAVE BEEN INTEGRATED AS THE FIRST STEP TO SUPPORT OMNICHANNEL OMNICHANNEL CLIENT SERVICES ECOMMERCE & CLIENT SERVICES 16
SUMMARY 1. A STRATEGIC DECISION 2. BRINGING BACK ECOMMERCE WHILE SETTING UP THE OMNICHANNEL FOUNDATIONS 3. CLIENT SERVICES ECOMMERCE & CLIENT SERVICES 17
CLIENT SERVICES - A STRATEGIC MEETING POINT MISSION Provide to all our customers around the world a direct CLIENT connection to Kering Houses – seamless, always EXPERIENCE accessible and personalized CLIENT CLIENT INCREMENTAL QUALITATIVE SALES SERVICES FEEDBACK A “CLIENT FIRST” STRATEGY CONTRIBUTE to the omnichannel experience GUIDE and answer clients along their journey CLIENT ENGAGEMENT ENHANCE the long-term relationship ECOMMERCE & CLIENT SERVICES 18
CREATING A DIGITAL RETAIL STORE CLIENT BENEFIT Retail staff stay Provide a 360° client experience focused on client- facing activities across all touchpoints Extend the client experience out of the store ECOMMERCE & CLIENT SERVICES 19
MAIN REASONS FOR CONTACT 10% Brand Information 40% Product enquiry ALL CHANNELS 50% Purchase ECOMMERCE & CLIENT SERVICES 20
A CORE MODEL DEVELOPED ON A SCALABLE AND SUSTAINABLE APPROACH CLOSE TO OUR BEST-IN-CLASS UNIQUE CUSTOMERS TECHNOLOGY MANAGEMENT CULTURE ECOMMERCE & CLIENT SERVICES 21
CLOSE TO OUR CUSTOMERS MAINLAND EUROPE AMERICAS APAC KOREA JAPAN CHINA 2017 2018 2019 2020 8 6 >300 >12 BRANDS REGIONAL HUBS DIGITAL ADVISORS LANGUAGES Live ECOMMERCE & CLIENT SERVICES 22
BEST-IN-CLASS TECHNOLOGY CRM MANAGEMENT INTELLIGENT TELEPHONY SYSTEM LUCE & RETAIL 360° CUSTOMER SYSTEMS VIEW TO ENGAGE WITH AUTHENTICITY INTELLIGENT LIVE CHAT ECOMMERCE & CLIENT SERVICES 23
360° CUSTOMER VIEW a a a ECOMMERCE & CLIENT SERVICES 24
INTELLIGENT LIVE CHAT See the Brand website and its activity as in a store Visualize client data See the customer journey ECOMMERCE & CLIENT SERVICES 25
INTELLIGENT LIVE CHAT DEMO ECOMMERCE & CLIENT SERVICES 26
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