Go Global, Go Direct!Why a Global Direct-to-Consumer Channel is Right for Your Business

http://www.digitalriver.com | @digitalriverinc

WE LIVE IN THE CUSTOMER AGE

CUSTOMERS HAVE MORE CHOICE THAN EVER

AWARENESS CONSIDERATION PURCHASE SERVICE LOYALTY

PR

WORD OF MOUTH

ONLINE ADS

EMAIL

DIGITAL SIGNAGE

SEARCH

SOCIAL MEDIA

BLOGS

USER REVIEWS

DIRECT MAIL

STORE

3RD PARTY WEBSITES

CALL CENTER

MARKETPLACE

DIRECT

ONLINE RETAILERMOBILE

CHAT

CALL CENTER

PROMOTION ON INVOICE

BLOG

EMAIL

NEWSLETTER

3RD PARTY APPSTV, RADIO, PRINT

CUSTOMERS HAVE

ACCESS TO MORE

INFORMATION

THAN EVER

CUSTOMERS

EXPECT TO HAVE

A RELATIONSHIP

WITH YOU

MULTIPLE SELLING CHANNELS CO-EXIST

Branded manufacturers are developing three sales channels that

co-exist and each channel has its own unique strategy.

CHALLENGES FOR SELLING DIRECT

FINANCIAL!

EXPERTISE!

SYSTEMS & OPERATIONS!

CULTURE!

PARTNER NETWORK!

Digital River is a leading global provider of

commerce, payments and marketing solutions.

20+ years of experience

200+ payment methods

1300+ commerce experts

22 offices around the world

$35B annual online transactions

More than 240 countries and

territories where we do business

JAMES GAGLIARDI

James Gagliardi is vice president of strategy and

innovation at Digital River. He is responsible for

the strategy behind the company’s global

product roadmap and ensuring its suite of

commerce, payments, and marketing solutions

meet, exceed and anticipate the needs of Digital

River’s world-renowned clients.

http://driv.ws/jamesgagliardi

@jamesgagliardi

Source: A commissioned study conducted by Forrester Consulting on behalf of Digital River, March 2014

CUSTOMER RELATIONSHIP+

DEMAND+

COMPETITION+

DRIVERS FOR SELLING DIRECT

CUSTOMER EXPERIENCE+

ASSORTMENT+

FINANCIAL+

Source: A commissioned study conducted by Forrester Consulting on behalf of Digital River, March 2014

IMPACT OF SELLING DIRECT

CUSTOMER ACQUISITION+

BRAND AWARENESS+

COMPETITIVE

DIFFERENTIATION+

CUSTOMER SATISFACTION+

ASSORTMENT+

FINANCIAL+

INNOVATION+ BUSINESS INTELLEGENCE+

89%

89% of people visit a brand’s

website when shopping onlineSource: Digital River

MORE THAN A THIRD OF CONSUMERS GLOBALLY HAVE

PURCHASED PRODUCTS DIRECTLY FROM BRANDS

35%

Sources: PWC, Demystifying the online shopper 10 myths of multichannel retailing | Forrester, The Marketing Case For A Branded Sales Channel

• KNOWLEDGE

• CERTIFIED PRODUCTS

• WARRANTIES

• BRAND LOYALTY

• UNIQUE SELECTION

• UNIQUE OFFERS

• PRICE

BRANDED CONTENT has a higher potential to

drive conversions than

expert content

or user-generated content

Source: Nielsen/inPowered, The Role of Content in the Consumer Decision Making Process, $50-$499

Selling direct is the channel

most highly correlated with

spending premiums in several

industries.

PURCHASE

INTENT

CONTENT

IS QUEEN

43% of customer put off

buying a brand’s product

through another channel if

they can’t buy it through

the brands own website

Source: Digital River

43%

CALL-TO-ACTION

IS KING

Purchasing directly from the

Brand’s website converts three

to five times more than a

retailer.

Source: Digital River

50% of customers end up purchasing

competitive or unrelated product

50%

Source: Digital River

RECOMMENDATIONS & STRATEGIES

WHERE-TO-BUY

PARTNER FULFILLED ORDERS

OUTLET STORES

PRIVATE STORES

HIGH-VALUE PRICING

PRODUCT DIFFERENTIATION

GEOGRAPHICAL TARGETING

WHERE-TO-BUY

WHERE-TO-BUY

SHIP FROM STOREPICK-UP IN-STORERETURN IN-STOREPARTNER SERVICES

PARTNER-FULFILLED

ORDERS

30

%

OUTLET STORE

REFURBISHED

OPEN BOX

SCRATCH-AND-DENT

OUTDATED

EXCESS INVENTORY

SLOW MOVING

END-OF-LIFE

30%

UP TO 30% OF REVENUE

FROM OULET STORES

OUTLET STORE

50%

Source: Digital River

EMPLOYEES

PARTNERS

FRIENDS & FAMILY

LOYALTY & FAN CLUBS

STUDENTS & FACULTY

EVENTS

PRIVATE STORES5%

Create custom shopping experience with differentiated

product assortment, pricing and merchandising offers

UP TO 50% OF REVENUE

FROM PRIVATE STORES

MSRP INTEGRITY

PREMIUM SERVICE

HIGH-VALUE

PRICING

PRODUCT

DIFFERENTIATION

PERSONALIZATION

UNIQUE COLORS

CUSTOM BUNDLES

ENDLESS AISLE

ADD-ONS

ACCESSORIES

REPLACEMENTS

CONSUMABLES

PRODUCT

DIFFERENTIATION

PRODUCT

DIFFERENTIATION

LOW BARRIER

LOW CONFLICT

LEVERAGE PARTNERS

GEOGRAPHIC

TARGETING

GLOBAL

Three billion consumers are

expected to drive cross-

border ecommerce revenue

to more than $300 billion by 2018.

.

On average today,

18% of online

revenues come from international sales

40%

18%

Source: Forrester Consulting, Global eBusiness and Channel Strategy Survey | Digital River

INTERNATIONAL SALES

GOING GLOBAL MEANS GOING LOCAL

OPPORTUNITIES & CHALLENGES

OPPORTUNITIES CHALLENGES!+

LEGAL ENTITIES+

TAX COLLECTION AND REMITTANCE+

COMPLIANCE+

FRAUD MANAGEMENT+

CUSTOMER SERVICE+

FINANCIAL+

CUSTOMER ACQUISITION+

COMPETITIVE DIFFERENTIATION+

BRAND AWARENESS+

CUSTOMER SATISFACTION+

BUSINESS INTELLEGENCE + SYSTEMS & OPERATIONS+

FOREIGN EXCHANGE+

CRAWL / GOOD WALK / BETTER RUN / BEST

Local Entity

• Local credit cards

• Local payment types

Cross-Border Payments

• International payments

• PayPal

Off-Shore Warehouse

• Customer is importer of record

• Customer pays landed costs of

duties & taxes

Localization

• Language

• Currency

Local Warehouse

• Client is Importer of Record

and pays duties and taxes

Localization

• Language, currency

• Site flow, experience

• Address validation

Cross-Border Payments

• International payments

• PayPal

Marketing

• Local marketing expertise

and services

Off-Shore Warehouse

• Customer is importer of record

• Customer pays landed costs of

duties & taxes

Localization

• Language, currency

• Site flow, experience

• Address validation

Customer Support

• Local language support for

email, phone, chat

Customer Support

• Local language support for

email, phone, chat

GOING GLOBAL

CARDS VS. ALTERNATIVE PAYMENTS

GERMANY NETHERLANDS SWEDEN FINLAND

30%

20%

30%10%

ADDING LOCAL PAYMENTS CAN

DRAMATICALLY INCREASE REVENUES

CHANNEL BALANCE

OPPORTUNITIES & CHALLENGES

OPPORTUNITIES CHALLENGES!+

FINANCIAL!

CHANNEL RELATIONSHIPS!

EXPERTISE!

SYSTEMS & OPERATIONS!

CULTURE!

FINANCIAL+

CUSTOMER ACQUISITION+

COMPETITIVE DIFFERENTIATION+

BRAND AWARENESS+

CUSTOMER SATISFACTION+

ASSORTMENT+

INNOVATION+

BUSINESS INTELLEGENCE +

Source: A commissioned study conducted by Forrester Consulting on behalf of Digital River, March 2014

91%

IMPACT TO THE CHANNEL

91% OF BRANDS SEE A POSITIVE

IMPACT TO THEIR CHANNEL

RELATIONSHIP

BRAND AWARENESS

INCREASED SALES+

BRAND AWARENESS

INCREASED LEADS+

REFERRAL SALES+

INVENTORY MANAGEMENT+

FOCUSED

PRODUCT ASSORTMENT+

Go Global, Go Direct!Why a Global Direct-to-Consumer Channel is Right for Your Business

http://www.digitalriver.com | @digitalriverinc