Dentsu Commerce

Introduction to Commerce Principles Introduction Commerce is changing

DENTSU AEGIS NETWORK This is where we used to look for growth Commerce is changing PRODUCT SEARCHES ARE MOVING TO MARKETPLACES FIRST CHANNEL USED WHEN TOP 5 WAYS AMAZON HAS RESEARCHING PRODUCTS DIGITALLY INFLUENCED SHOPPING BEHAVIOUR GROWTH IS SHIFTING TO ECOMMERCE Check prices on Amazon SHARE OF TOTAL GLOBAL RETAIL PROJECTED FOR 2018-2021 41% Brand.com 16% Start product search on Amazon 36%

17.5% Amazon 15.5% Read reviews on Amazon 33% Search Engines 13.7% 55% 28% 11.9% Shop less often at retail stores 27% 10.2%

Shopping behaviour not influenced 20% 2017 2018 2019 2020 2021 by shopping with Amazon

GLOBAL EC MARKETS RISING (US$B) VARIED PLATFORMS LEAD TO VARIED BEHAVIOR

Canada UK Russia $30 $99 Germany $30 FIRST-TIME PURCHASES REPEAT PURCHASES $73

France S Korea $37 US $43 $340 19% $79 Brand.com 20% $672 50% Brand.com 34% Offline Retail Marketplaces

Brazil 31% $19 Marketplaces 47% Offline Retail

DENTSU AEGIS NETWORK Brick & Mortar Reborn Machine Learning + AI Voice

Visual Augmented Reality Content is Commerce

Amazon / Alibaba / Artisans Evolved Fulfillment EC Packaging Shopping Everywhere

DENTSU AEGIS NETWORK Creating a Need to Adapt to New Behaviours

Convenience Relevance Value

Trust

That Must Be Applied Across All Touchpoints

Marketplaces Social Brand.com Retail

Identifying unique and Cross channel Managing conflict overlapping audiences measurement and For and to deliver optimal and optimization cannibalization experiences

DENTSU AEGIS NETWORK Commerce in APAC Leading the way

DENTSU AEGIS NETWORK Growth in Commerce is Coming from

AVERAGE TOTAL AMOUNT SPENT ON E-COMMERCE PURCHASES BY EACH E-COMMERCE USER IN USD

ABOVE GLOBAL BELOW GLOBAL AVERAGE AVERAGE GLOBAL AVERAGE

CHINA: $710 : $228 : $1,022 THAILAND: $212 JAPAN: $921 INDIA: $118 HONG KONG: $821 $733 : $64 AUSTRALIA: $815 VIETNAM: $55 PHILIPPINES: $33

SOURCES: GLOBALWEBINDEX. 2016. BASED ON A SURVEY OF INTERNET USERS AGED 16-64.

DENTSU AEGIS NETWORK SEA Internet Economy Report

SEA GMV - $B 200 153 150 150M Average Order 49M 100 Value

50 38 $15 - $20 2015 2019 5 0 2015 2019 2025 Groceries, personal care eCommerce Active Users and beauty products are eCommerce becoming standard items in Southeast Asians’ online e-Commerce blazes through $38 shopping baskets. billion, turbocharged by shopping festivals Source: e-Conomy SEA 2019 - Google, Temasek, Bain & Company

DENTSU AEGIS NETWORK Marketplaces in APAC --

DENTSU AEGIS NETWORK Top 10 most visited E-commerce In Southeast Asia, Q2 2019 – Total Monthly Average visits on Desktop and Mobile Web

DENTSU AEGIS NETWORK eCommerce Shopping Apps in Southeast Asia With the most Monthly Active Users – iPhone and Android Phone Combined

DENTSU AEGIS NETWORK Study Coverage

Markets Tier 1 Marketplaces Singapore Lazada Qoo10 Malaysia Shopee Lazada Lelong/Ebay Indonesia Tokopedia Shopee Lazada/Blibli Vietnam Shopee Tiki Lazada Philippines Lazada Shopee Ebay

DENTSU AEGIS NETWORK Commerce Dentsu Commerce Framework

DENTSU AEGIS NETWORK The Commerce Success Framework

AVAILABILITY

REPEATABILITY

BUYABILITY FINDABILITY Prioritising and succeeding anywhere in commerce

Availability Findability Buyability Repeatability

Where and when Are you easy to Are you better than Is the experience consumers are find and relevant? the competition? engaging? looking?

Position Content Audience Insight Purchase Experience Optimisation Effectiveness

Plan presence and Optimise visibility Optimise product Audit & monitor availability priorities where your audiences listings for purchase reviews and by audience & demand are and ensure you conversion (and sentiment. React can be found organic position) quickly to opportunities Commerce Offering Dentsu Omnichannel Proposition

DENTSU AEGIS NETWORK Omnichannel Proposition

Digital third- Brick-and- Digital Owned Parties Point Mortar Point Properties of Sales of Sales

Ex: brand.com Ex: Lazada Ex: Owned stores, malls

DENTSU AEGIS NETWORK The Product Matrix

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS

Availability

Findability

Buyability

Repeatability

DENTSU AEGIS NETWORK Commerce Offering Dentsu Omnichannel Proposition

DENTSU AEGIS NETWORK Building Capabilities

AVAILABILITY Availability

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS

eCommerce built: Magento, Prestashop, OScommerce

Marketplaces Management

Inventory Management

DENTSU AEGIS NETWORK How to reach out to consumers

FINDABILITY Findability

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS

Paid Media

SEO

Marketplaces Optimisation

DENTSU AEGIS NETWORK How do you stand against competition

BUYABILITY Buyability

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS

CRO

Data Feed Management

Propensity retargeting

DENTSU AEGIS NETWORK Repeat & grow

REPEATABILITY Repeatability

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS

Email marketing

Marketplaces Marketing

CRM Integration

DENTSU AEGIS NETWORK Measurement Across your lines of business

DENTSU AEGIS NETWORK Measurement across your Point Of Sales

Digital Owned Digital 3rd Party Brick-and-mortar Properties POS POS Web Analytics GA360 Adobe Tag Management

Marketplaces Intelligence

In-store analytics

O2o Intelligence

DENTSU AEGIS NETWORK The Measurement Matrix: Understand what is valuable to your business growth

Strategic Lifetime Value

Incremental % of sales Per Visit Cost Value ARPU Revenue w/ Tests influenced by Media

Assisted Inbound Clicks Conversions Conversion Rate Repeat Purchases Conversions

Recency CTR Page Value Revenue Frequency

Viewability Bounce Rate Path Length Share of Voice

Tactical Impressions Visits

Real Time Weekly Monthly Quarterly 6-Monthly

DENTSU AEGIS NETWORK Case Studies Driving Success in Commerce

DENTSU AEGIS NETWORK Case Study: Nestle Build & Implement a multiband marketplace

The Challenge Approach

Nestlé was looking to implement a multi- Isobar Commerce integrated local brand marketplace website for its Japan payment methods including credit card, market. pay at convenience store, and cash on delivery for the Japan market.

WMS, Reporting, and CRM was also integrated with Nestlé Japan internal systems.

Isobar Commerce implemented complex subscription modules to create convenient shopping experiences.

DENTSU AEGIS NETWORK Case Study: Foot Locker Activating Foot Locker in APAC and planning for long term growth

The Results

The Challenge The Approach % Foot Locker were preparing to enter Our first step was to educate and inform: the APAC market with a combined moving Foot Locker away from their EU 217 physical/e-commerce launch. They business model with detailed Increase in ROAS for HK faced a problem typical of global insights/research around the APAC consumer brands encroaching on Asia for the first landscape. time: a lack of customer data and We then prepared a bespoke launch understanding of market nuance. framework for an initial 3 deployment across % Singapore, Malaysia and Hong Kong. % As such, they required a strategic 24 535 partner with deep expertise across the Ensuring supply met demand was crucial ROI uplift performance spectrum and the scale (especially with Foot Locker’s crowded Increase in MY ROAS on branded 15% impressions terms required to accommodate simultaneous calendar of in-store events and exclusive releases). With this (and APAC’s equally busy In one week market launches. PH schedule) in mind, we strategized a data feed management system for real-time product/model updates – whilst building a digital calendar mapped out to align with physical events whilst full e-commerce capability was being readied.

DENTSU AEGIS NETWORK Case Study: Converse Converse x Lazada Super Brand Day campaign

The Challenge Approach The Results

Converse offers trendy and vibrant As there are 30% commitment targets to hit, sports apparel for both men and channels and creative formats that we women however, Converse products proposed do not incur high CPC/CPM. are easily cannibalized by its popular parent brand, Nike. We launched teaser phase to drive awareness prior to the actual D-day. Creatives were 30% Create anticipation for Converse’s grouped into teaser count down, actual day, Super Brand Day in collaboration and promo discount ads to build excitement to Above target with Lazada, complementing the the consumers and encourage them to add work that will be done through their wishlist to cart for the D-Day. Ad copies performance marketing in 2 weeks were tailored to the creatives and product feeds across 4 markets. to ensure alignment. Achieved Overall GMV target by All traffic are to drive to Lazada MCP CPAS were implemented with Multiple product 30%. Outstanding performance page. feeds created to prevent ads being paused due from Philippines markets, achieved to no inventory. more than double of the GMV target

Quick turnaround during the D-day was important to bring this campaign to a success.

DENTSU AEGIS NETWORK Case Study: Shiseido Dentsu Online to Offline Business Solution

The Challenge The Big Idea The Results

Shiseido needed to understand the Dentsu combined the paid media Smart decision impact form their online buying to data with the Shiseido business their offline business. More than data (CRM, POS numbers, makings 90% of sales were still contributed website, footfalls). by traditional brick & mortar. Media channels, creatives, By leveraging the power of our distribution channels Does online media have an influence platform to match data together, on consumers purchasing journey? we were able analyse, track and Are consumers purchasing after optimize the user journey from seeing Shiseido advertising ? online to offline and attribute back ROAS on both footfalls and ROAS uplift sales to each channel, audiences, creatives. x17

DENTSU AEGIS NETWORK Case Study: Conversion Rate Optimisation Optimise on-site Content to Boost Conversions

The Challenge The Big Idea The Results

Lotte Hotels saw that although it was expanding and To better understand Lotte Hotel’s customers’ paths maximizing site visits, revenue was not meeting to purchase, iProspect created a four-step % expectations. optimisation strategy to ensure effective time % management and performance testing: % Lotte had used iProspect previously to boost SEO and SEM to maximise channel performance, but the 1. Find the point of user drop-off by using Analytics 49 0.9 site visits were not generating conversions – so they 360 data, such as Goal Flow and Shopping wanted to understand what barriers were preventing Behaviour reports. people from making bookings. Increase in Increase in 2. Analyse the page and benchmark competitors to find the cause of the deviation. Booking Rates Total

3. Run A/B tests with Optimize, Google’s integrated conversions CRO tool.

4. Apply the best-performing learnings to the Lotte Hotel site.

Employing this strategy, Lotte Hotel and iProspect tested different site changes which drew the biggest results across four key variables – relocating menu items, changing the booking button colour, and call- to-action, using promo pop-up windows and displaying special fee-less messaging.

DENTSU AEGIS NETWORK