Guarantee Digital Seminar for Delafield Chamber June 2014
Jose Nino: Perry Ellis International Case Study
1. E-Commerce Workshop
A Review of Successful Strategies and Promising Trends
Jose Nino
Perry Ellis International
Director of E-Commerce Marketing
jose.nino@pery.com
2. E-Commerce Workshop
A Review of Successful Strategies and Promising Trends
AGENDA
About Perry Ellis International (PEI)
PEI Online History
Trends in USA E-Commerce
PEI Crossborder – LATAM
What has worked for PEI Omnichannel
What has worked for PEI Omnichannel (Kinda)
Partner Ecosystem
Q&A
5. Perry Ellis Int’l (Nasdaq: PERY) is a leading international
manufacturer and marketer of apparel. Its diverse portfolio of
brands, either wholly owned or licensed trademarks from third
parties, are available through multiple distribution channels.
FY14 Revenue: $912M
Stores w/PEI Product: 15,000+
Licensing Agreements: 100+
FY14 Units Shipped: 70M+
FY14 DTC E-Com Growth: 45%
ABOUT PEI
6. • In 2014, PEI received praise from a leading industry digital ranking.
- Four companies received “genius” award, including COACH, Gucci, Tory Burch and Ralph Lauren.
- 22 companies received “gifted” award, including Perry Ellis International, Kate Space, Burberry, Calvin
Klein, Lacoste, Chanel, Giorgio Armani and others.
ABOUT PEI
7. USA: +47% | +27%
2014 vs 2013
E-Com Growth
Revenue | Traffic
ALL LATAM: +72% | +63%
CHINA: +4% | +23%
Q1FY16 vs Q1FY15
+46% | +47%
ABOUT PEI
8. Never be afraid to take risks,
and never take the clothes you wear too seriously.
“
“- PERRY ELLIS
9. Sept 1st, 2006 | PerryEllis.com
Nov 1st, 2006 | OriginalPenguin.com
Mar 1st, 2009 | Cubavera.com
Jan 5th, 2014 | PerryEllis.com LATAM
Jan 9th, 2012 | Original Penguin UK
Jan 5th, 2014 – Jan 4th, 2015 | Cubavera.com LATAM
Site circa Sept, 2006
Site circa Nov, 2006
Site circa May, 2009
PEI ONLINE HISTORY
10. Sep 8th, 2008 – Sept 30th, 2014 |
Candccalifornia.com
Oct 10th, 2011 | RafaellaSportswear.com
Oct 27th, 2013 | CallawayApparel.com
Jan 5th, 2014 – Jan 4th, 2015 | Rafaella Sportswear LATAM
Site circa Oct, 2011
Site circa Sept, 2008
Site circa May, 2013
PEI ONLINE HISTORY
11. TRENDS IN USA E-COMMERCE
INDUSTRY TRENDS
• 2014 saw 12-15% average growth (depends on who you ask).
- Nearly five times greater than growth in U.S. retailing (3.2%)
• E-Commerce retail now accounts for 10% of total retail sales.
• Consolidation continues in an attempt to maintain market share.
- #1 Office supply giant Staples bought #2 office supply giant Office Depot after
Office Depot bought #3 office supply giant Office Max in 2012.
- Men’s clothing giant Men’s Wearhouse completed hostile takeover of Jos. A Banks
in 2014.
- 1-800 Flowers purchased Harry & David, a decade’s old purveyor of gourmet
food and gifts.
USA E-COMMERCE NEARING MATURITY
12. TRENDS IN USA E-COMMERCE
• Age of Disruptors: Rise of online only merchants that are
exclusively direct to consumer, bypassing margin eroding
distribution middlemen.
- Dollar Shave Club offering razors at a price point that is roughly 80%
cheaper than Gillette. P&G has been forced to revise their marketing
campaigns so that their relative value is emphasized.
- Warby Parker has disrupted traditional eyewear conglomerates such as
Visionworks and Lenscrafters by offering premium eyewear via a direct
to consumer model. At roughly 70% less than comparable offline
glasses, they recently deployed physical stores to augment their omni-
channel fulfillment model.
INDUSTRY TRENDS
USA E-COMMERCE NEARING MATURITY
13. TRENDS IN USA E-COMMERCE
• Ship to store continues to gain momentum. Proven and effective
way to increase AOV, primary omni-channel driver.
- PEI initial rollout underway for Perry Ellis and Original Penguin stores.
- 40% of Home Depot e-commerce orders are shipped to store. Of those
orders, nearly 25% of customers purchase an additional item during their
store visit to pick up their web order merchandise.
• Traditional retailers such as JCPenney, Sears and Best Buy
continue to close physical locations and recycle savings into digital
operations.
- Macys turning flagships into distribution centers for e-commerce
decreasing logistics cost and improving delivery times to better compete
with Amazon Prime and augment their omni-channel execution .
INDUSTRY TRENDS
USA E-COMMERCE NEARING MATURITY
14. TRENDS IN USA E-COMMERCE
• Flash site popularity continues to diminish, although there are
some exceptions.
- Stronger economy has led to decreased need for manufacturers to clear
inventory. Any activity that does take place are at substantially reduced
margins.
- As consolidation continues, only a handful of retailers exist thereby
impacting brand’s ability to guarantee favorable wholesale prices. This
has had an effect on flash site business model sustainability.
- After explosive growth in 2009-2011, leaders such as RueLaLa and
Hautelook have posted single digit gains in 2014. Previous darlings
LivingSocial and Groupon both posted double digit decreases.
INDUSTRY TRENDS
USA E-COMMERCE NEARING MATURITY
15. TRENDS IN USA E-COMMERCE
E-COMMERCE MARKETING & TECHNOLOGY TRENDS
31. TRANSLATION & LOCALIZATION RESOURCES
LET TECHNOLOGY DO THE HEAVY LIFTING.
THE MAIN TYPES OF TRANSLATION SOFTWARE INCLUDE:
Machine Translation
This is an automated translation tool, and typically renders
results from a crowd sourced database. Most popular option
is as Google Translate, as well as Bing Translator.
CORRECT
PEI CROSSBORDER | LATAM
Misinterpreted contextual meaning.
32. Computer Assisted Tools
Used primarily by translation and technology industries.
“Translation memory” is manually created by humans, not
machines, thereby allocating sensitivity around contextual
misinterpretations that computers can’t decipher, yet.
TBX Markup
An extension of translation memory, except much more
technical. Its objective is to easily integrate with XML
standards for streamlined execution.
PEI CROSSBORDER | LATAM
LET TECHNOLOGY DO THE HEAVY LIFTING.
THE MAIN TYPES OF TRANSLATION SOFTWARE INCLUDE:
TRANSLATION & LOCALIZATION RESOURCES
33. DON’T FORGET TO “LOCALIZE” THE
TRANSACTIONAL ELEMENT.
International Checkout
After “localizing” your content, make sure you extend the
following efforts to your checkout process:
Customers want to see pricing in their local currency.
They also want to see VAT/Duty charges for complete
transparency and decreased customs surprises.
Finally, UPS/Fedex is not the only option, especially
overseas where there are cheaper alternatives (DHL).
PEI CROSSBORDER | LATAM
TRANSLATION & LOCALIZATION RESOURCES
34. PERRYELLIS.COM LATAM INFRASTRUCTURE
Proxy based machine translation from ……………
Translation Memory Database
Proxy
Checkout Localization from ……………..
Customer PerryEllis.com
Customer
in Mexico
Server API
Call
PerryEllis.com
PEI CROSSBORDER | LATAM
TRANSLATION & LOCALIZATION RESOURCES
38. LOCALIZATION vs LOCALISATION
Eyeglasses
When localizing your site, keep in mind there are many
different interpretations for similar words.
Gafas
Lentes
Anteojos
Earrings
Pendientes
Aretes
Aros
Aretes
Hangover
Resaca
Cruda
Ratón
Guayabo
TRANSLATION & LOCALIZATION CONSIDERATIONS
PEI CROSSBORDER | LATAM
39. Jeans Vaqueros Mezclilla
When localizing your site, keep in mind there are many
different interpretations for similar words.
Vaqueros
Vaqueros
PEI CROSSBORDER | LATAM
LOCALIZATION vs LOCALISATION
TRANSLATION & LOCALIZATION CONSIDERATIONS
40. INTERNATIONAL PAID SEARCH
Perception
Mexico will contribute majority of LATAM revenue.
Reality
Mexico led LATAM, but only contributed 38% of
total LATAM revenue. Who was #2?
ECUADOR
PEI CROSSBORDER | LATAM
41. Perception
Mexico will contribute majority of LATAM revenue.
Reality
Mexico led LATAM, but only contributed 38% of
total LATAM revenue. Who was #2?
ECUADOR
Highest LATAM Conversion Rate, 3rd globally
behind USA and Canada.
Highest LATAM Per Session Value, 3rd globally
behind USA and Canada.
42% Higher Average Order Value than USA
Orders
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
42. Perception
Google is as expensive in LATAM as it is in USA & Europe
Reality
Google is very affordable, and quite effective.
Competition is substantially less than
USA/Europe, thereby decreasing costs for
complete share of voice.
Perry Ellis branded keywords around about
65% less expensive than in USA. Non branded
keywords are about 80% less expensive than
USA.
CTR (Click-thru rates) on average are 322%
higher than counterparts in USA.
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
43. Perception
Display options are as varied in Mexico as they are in USA.
Reality
Display has yet to mature in Mexico/LATAM.
Actual Display Costs in Mexico
Cost per Click: $.07 - $.15
Estimated CPM: $.25 - $.50
Actual Display Costs in USA
Cost per Click: $.23 - $.40
Estimated CPM: $2.25 - $3.50
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
44. Perception
We’ll do the same CPC efforts in LATAM as we do in USA.
Reality
Search programs vary greatly LATAM.
Know product preferences in each region.
We’ve seen products trend very differently
when comparing USA best sellers and LATAM
best sellers. Perfume seems to have much
more traction in LATAM compared to USA, and
Europe.
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
45. Perception
We’ll just do the same CPC efforts in LATAM as we do in USA.
Reality
Search programs vary greatly LATAM.
Know where your share is. Unlike USA, interest pockets are
isolated, far and few in between.
Because broadband costs are relatively expensive, it is
not as penetrated as other industrialized nations.
Therefore, geo-target search campaigns as necessary.
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
46. ACTUAL VIDEO METRICS
23%
24%
22%
21%
10%
Percent of People who Viewed 1/4 Length of Video.
Mexico
Colombia
Peru
Chile
21%
22%
19%
17%
21%
Percent of People Who Viewed Entire Video
Mexico
Colombia
Peru
Chile
PEI CROSSBORDER | LATAM
INTERNATIONAL PAID SEARCH
47. 0% 5% 10% 15% 20% 25% 30% 35% 40%
Mexico
Ecuador
Dominican Republic
Colombia
Costa Rica
Chile
Honduras
Puerto Rico
El Salvador
Guatemala
Panama
Peru
Venezuela
Bolivia
Nicaragua
Uruguay
% of LATAM
Population
(Exc. Argentina &
Brazil)
% of LATAM Sites
Revenue Total
(Exc. Argentina &
Brazil)
PEI CROSSBORDER | LATAM
ALL PEI LATAM SALES 2014INTERNATIONAL PAID SEARCH
48. 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00%
Mexico
Ecuador
Dominican Republic
Colombia
Costa Rica
Chile
Honduras
Puerto Rico
El Salvador
Guatemala
Panama
Peru
Venezuela
Bolivia
Nicaragua
Uruguay
United States
Branded Fragrances CTR
PEI CROSSBORDER | LATAM
ACTUAL PEI LATAM PPC YTDINTERNATIONAL PAID SEARCH
49. 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% 18.00% 20.00%
Mexico
Ecuador
Dominican Republic
Colombia
Costa Rica
Chile
Honduras
El Salvador
Guatemala
Panama
Peru
Nicaragua
United States
Branded Dress Shirts CTR
PEI CROSSBORDER | LATAM
ACTUAL PEI LATAM PPC YTDINTERNATIONAL PAID SEARCH
50. 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%
Mexico
Ecuador
Dominican Republic
Colombia
Costa Rica
Chile
El Salvador
Panama
Peru
Nicaragua
United States
Nonbranded Pants CTR
PEI CROSSBORDER | LATAM
ACTUAL PEI LATAM PPC YTDINTERNATIONAL PAID SEARCH
51. Each country has their own set of rules, making cross
border commerce a complicated endeavor.
MEXICO
Credit card penetration is growing, but still very low as only
13-16% of population has credit cards.
Many online currencies are preferred.
IVA (Value Added Tax) is 10-16%
E-Wallet, led by Mercado Libre’s “Mercado Pago”,
facilitates virtual wallet use. Users can load funds via debit,
bank deposits, between users and convenience stores.
Paypal on steroids.
PEI CROSSBORDER | LATAM
PAYMENTS, TAXES & RESTRICTIONS
52. Each country has their own set of rules, making cross
border commerce a complicated endeavor.
CHILE
Credit card penetration is growing, but still very low as only
15-18% of population has credit cards.
Like Brazil, “Boletos” are an alternative
online payment method.
Duties range from 6-16.5%, VAT @ 19%,
Luxury Tax @ 50-85%
PEI CROSSBORDER | LATAM
PAYMENTS, TAXES & RESTRICTIONS
55. AFFILIATE MARKETING | CJ LATAM
PROGRAMMATIC DISPLAY
PERSONALISED & BEHAVIORAL EMAILS
Affiliate marketing currently makes up 8-10% of E-Commerce industry
revenue. This number is much higher for PEI, and an excellent source of
traffic. LTV benefits greatly outweigh initial promotional margin impact.
Still in its infancy in LATAM. Mediadesk leading, as Mediamath and
Quantcast have Mexico on its radar. Private marketplace deals have
started to appear with Televisa and Time Inc (People en Espanol).
Excellent method of driving upper funnel engagement towards
conversion.
We have spent much of the past year compiling our LATAM e-mail
database, but have yet to send one single Spanish e-mail. This year
we will introduce personaliSed, CRM driven newsletters in addition to
behavioral e-mails based on cart, product and category
abandonment.
PEI CROSSBORDER | LATAM
TOMORROW
57. RetailMeNot Omni-Channel Couponing
Objective is to drive in-store purchasing
via online or mobile device influencing.
“Creepy” technology has rendered huge
results
• Delivery mechanisms consist of:
- Offer browsing by brand
- Offer browsing by mall
- Radius mapping
Offer browsing by brand,
note mall option tab.
Nearby in-store offers based on radius
from current location.
OMNICHANNEL SUCCESSES
MOBILE GEOFENCING
59. RetailMeNot Users Exposed to Perry Ellis Offer:
RetailMeNot Users Who Visited Perry Ellis Offer:
RETAILMENOT MOBILE GEOFENCING PERFORMANCE CONCLUSIONS | PERRY ELLIS STORES
- In-store focused placements helped drive user engagement through a 645% lift in average daily interactions
- Mondays had the overall highest traffic for the week
- 70% of mobile traffic came from outside the geo-fenced store locations, showing true “incrementality” and “Top of Funnel” user
engagement
OMNICHANNEL SUCCESSES
MOBILE GEOFENCING
60. RETAILMENOT MOBILE GEOFENCING PERFORMANCE CONCLUSIONS | PERRY ELLIS STORES
OMNICHANNEL SUCCESSES
Data relates to device use per
coupon.
- Users received promotions via
traditional e-mail from RMN or
geofence pushing.
- Vast majority redeemed with
mobile device
- Geofence push rendered an
impulse buy.
- The tighter the radius, the
higher the redemption
rate.
MOBILE GEOFENCING
Mobile Clicks
Desktop Clicks
Tablet Clicks
61. RetailMeNot Users Exposed to Original Penguin Offer:
RetailMeNot Users Who Visited Original Penguin Offer:
OMNICHANNEL SUCCESSES
RETAILMENOT MOBILE GEOFENCING PERFORMANCE CONCLUSIONS | ORIGINAL PENGUIN STORES
- Fridays had the highest visits overall.
- Mobile exposures were a key success driver for the campaign
- 75% of mobile traffic came outside of geo-fenced store locations, showing true incrementally
and top of funnel user engagement.
MOBILE GEOFENCING
62. OMNICHANNEL SUCCESSES
RETAILMENOT MOBILE GEOFENCING PERFORMANCE CONCLUSIONS | ORIGINAL PENGUIN STORES
Data relates to device use per
coupon.
- Users received promotions via
traditional e-mail from RMN or
geofence pushing.
- Vast majority redeemed with
mobile device
- Geofence push rendered an
impulse buy.
- The tighter the radius, the
higher the redemption
rate.
MOBILE GEOFENCING
63. RESULTS
OMNICHANNEL SUCCESSES
973 In-Store Redemptions
AOV: $104.88
(+13% VS E-COM $92.33 AOV)
REVENUE: $102,048
COMMISSION: $10,204
NTF: 82%
SIX MONTH LTV: $35,103
2,789 In-Store Redemptions
AOV: $82.18
(+11% VS E-COM $74.12 AOV)
REVENUE: $229,200
COMMISSION: $22,920
NTF: 67%
SIX MONTH LTV: $82,512
MOBILE GEOFENCING
64. OMNICHANNEL SUCCESSES
“CARDLINK” PROGRAMS
OBJECTIVE: LEVERAGE U.S. CONSUMER BEHAVIOR FOR PROFILE LOOKALIKE SEGMENTING.
“Switcher”
Retention
“Light”
Change Behavior
“New”
Conquest
Reinforce the behavior of
your Frequent Customers so
they continue to shop at your
brands
Increase visits from
Infrequent Customers by
enforcing brand loyalty with
Perry Ellis/ Original Penguin
Target and acquire New
Customers for both
brands
Target Segment Targeting Criteria
Frequent (3x or more in 6 months) Visit Perry Ellis or Original Penguin 3x or more in the past 6 months
Infrequent (1-2x in 6 months) Visit Perry Ellis or Original Penguin 1-2x in the past 6 months
New (0x in 6 months) New (Apparel Stores)
65. OMNICHANNEL SUCCESSES
Vendors typically work with thousands of financial institutions, allowing for visibility into 150M+ “anonymous” customer data.
Purchase patterns, “like” retail category purchases and target demos segment massive data pools
Perry Ellis
“CARDLINK” PROGRAMS
66. OMNICHANNEL SUCCESSES
When the platform recognizes an online
user that meets the aforementioned
criteria, they will be served an add like
this one:
“CARDLINK” PROGRAMS
67. OMNICHANNEL SUCCESSES
When the platform recognizes an online
user that meets the aforementioned
criteria, they will be served an add like
this one:
If users like the offer, the click the
activation button and module will now
integrate cask back program at
customer’s financial institution when a
purchase takes place at online or
physical store.
“CARDLINK” PROGRAMS
68. OMNICHANNEL SUCCESSES
Target Served
Customers
Impressions Total Trips AOV Revenue Media Fees
Switcher 734 4,250 162 $89.64 $14,521 Neg
Light 10,975 57,169 432 $73.13 $31,590 Neg
New 4,958,374 31,895,042 1,574 $76.82 $120,917 Neg
Campaign Performance:
2,168 Trips accounting for $167,028 in total revenue.
31MM+ impressions generated.
4.9 MM + unique bank customers were served with a Perry Ellis offer
12 to 1 Return on Ad Spend
“CARDLINK” PROGRAMS
69. OMNICHANNEL SUCCESSES
Target Served
Customers
Impressions Total Trips AOV Revenue Media Fees
Switcher 734 4,250 162 $89.64 $14,521 Neg
Light 10,975 57,169 432 $73.13 $31,590 Neg
New 4,958,374 31,895,042 1,574 $76.82 $120,917 Neg
MY FAVORITE INTANGIBLES:
31MM+ impressions generated.
4.9 MM + TO BRAND NEW, HIGHLY QUALIFIED PEOPLE
- While $120,917 was NTF (new to file) through this attributable record,
our “direct channel” lift was up nearly 310% during active campaign rendering
more than double attributable revenue from Cardlink’s desktop to store
platform.
“CARDLINK” PROGRAMS
71. OMNICHANNEL SUCCESSES, (Kinda)
Historically, PEI is a wholesale business, but direct to consumer
model has become a core focus.
- Nearly100 stores globally, mostly in USA with new rollouts planned.
- E-Commerce now a double digit percent of entire DTC business unit, and
quickly catching up to physical stores.
SHIP TO STORE / PICKUP IN STORE
72. PROGRAM RECENTLY HAD SOFT, LIMITED STORE ROLLOUT
SHIP TO STORE / PICKUP IN STORE
OMNICHANNEL SUCCESSES, (Kinda)
73. WINS
Freight savings
Posted shipping fees
never cover true costs.
Competitive landscape
denies us the
opportunity to do so
In-store impulse
purchasing
Need some socks for
those shoes you bought
online?
Higher AOV
CHALLENGES
Inventory Alignment
In store stock is never 100%
accurate due to
“lost in store” items.
Site / Store Messaging
“New Arrivals” rarely aligns
with website.
Pricing / Offer Mismatch
Our fault, we should operate
as single entity
Split Shipment Capability
All or nothing fulfillment
SHIP TO STORE / PICKUP IN STORE
OMNICHANNEL SUCCESSES, (Kinda)
82. .
Operation
s
Merchan
dising
Marketing
PARTNER ECOSYSTEM
MARKETING
MERCHANDISING
OPERATIONS
PARTNER
TIPS
BE NICE
Success is a true
partnership.
Provide constructive
feedback, but also
provide compliments
when they are due.
COMMUNICATION
Email is not enough.
Facetime is critical in
expressing ideas that
are lost in e-mail
context. Brainstorm
and bond with
monthly meetings.
SHARED
ACCOUNTABILITY
OWN IT!
Don’t think “outsource
it and forget it”. Set
reasonable goals and
expectations for each
party. Create
compensation that is
based on
performance.
DON’T BET
THE FARM
Tippy toe into a sea
of success.
No matter how good
the pitch or negotiated
price, try to not
commit to a long term
contract without
testing the waters with
a trial. If the partner is
confident in their
offering, then they
should be receptive
towards a fair short
term sacrifice for a
long term relationship.