Webinar on Connecting the Endless Aisle to the Virtual Supply Chain using DropShip Commerce platform.

1. Connecting the Endless Aisle to
the Virtual Supply Chain
Todd
Rankin
(VP
Marke0ng,
DropShip
Commerce),
Eric
Chaffee
(VP
Product,
DropShip
Commerce)
&
Nikki
Baird,
(Managing
Partner,
Retail
Systems
Research)

2. Today’s Presenters
Introduction:
• Todd Rankin, VP Marketing, DropShip Commerce
Market Problem:
• Nikki Baird, Managing Partner, Retail Systems
Research
Drop Ship Challenges & Magento:
• Eric Chaffee, VP Product, DropShip Commerce

3. What Is RSR?
• Market Intelligence, focused on retail
• Context: the business challenges & opportunities that drive technology
investments
• Pragmatic insights
• Powered by extensive retail experience
• Fueled by a deep bed of research data
• We help retailers keep their IT strategies aligned with corporate
objectives
• We help solution providers align their products and messages with
retailers’ needs

4. My Role Today: Context
• The Gold Rush days of digital channels are nearly over
• Retailers are getting down to the hard parts of execution
• But they’re ignoring a big opportunity related to endless
aisle
• Visibility is a solution that solves lots of problems, and
its time has come

5. Retailers Expect Digital Commerce
to Continue to Grow
Digital Channel Growth
Today In 3 Years
72%
49%
29%
15% 14%
8% 8%
5%
Less than 10% 10-24% 25-74% Greater than 75%
Source: Survey “The Multi-Channel Retailer’s Reality in a Post-Amazon World”, RSR Research, November 2012

6. The Opportunities Are Still
Significant
Cross-Channel Shoppers Are...
Winners Others
Significantly more profitable than single 48%
channel customers 30%
Slightly more profitable than single channel 19%
customers 27%
10%
Equally profitable
7%
Less profitable than single channel 14%
customers 10%
10%
Don't know/Can't tell
27%
Source: “Omni-Channel 2012: Cross-Channel Comes of Age”, RSR Research, June 2012

7. For Every Kind of Retailer
Number of Unique Online Sites or Brands Operating Today
37%
29%
22%
13%
None One Two to Four More than 4
Source: “The Multi-Channel Retailer’s Reality in a Post-Amazon World”, RSR Research, November 2012

8. But More Difficult to Get
Cross-Channel Shoppers Are
"Significantly More Profitable than Single Channel
Shoppers"
50%
39% 38%
31%
28%
18%
2007 2008 2009 2010 2011 2012
Source: “Omni-Channel 2012: Cross-Channel Comes of Age”, RSR Research, June 2012

9. Focus Shifts From Brand Promise
to Execution
Cross-Channel Opportunities
Very Important Some Importance Little or No Importance
Allow the customer to purchase, take delivery, or
79% 19% 2%
return a product through the channels of their
Create a single brand identity across channels 79% 21%
Improve operational execution across all channels 75% 23% 2%
Leverage customer knowledge and information
73% 22% 4%
assets across channels
Allow inventory allocated for one channel to be used
67% 24% 9%
for another channel's fulfillment
Leverage product knowledge and information assets
66% 30% 4%
across channels
Use the digital channels to provide rich content
64% 32% 4%
about our products and services
Use the digital channels to drive traffic to stores 54% 35% 11%
Use the digital channels to build a sense of
52% 43% 4%
“community” around our Brand
Source: “Omni-Channel 2012: Cross-Channel Comes of Age”, RSR Research, June 2012

10. Retailers Know Customer
Expectations Only Rise
Top 3 Supply Chain Execution Business Challenges
Winners Others
Consumers expect retailers to provide a more 64%
seamless omni-channel experience 60%
Consumer demand is erratic, making it difficult to 50%
predict 40%
Digital channel growth outpaces store growth, 50%
putting new pressures on supply chain 40%
Competitive pressures drive us to create shorter 46%
customer order-to-delivery cycles 60%
Capital constraints make investments in inventory 32%
more challenging 36%
Variable supply chain costs (fuel, weather, etc.) have 32%
exposed weaknesses/risk-points in our supply chain 20%
Contract compliance with suppliers causes quantity, 18%
quality, and timeliness issues 20%
Source: “Executing on the Promise: Retail Fulfillment 2012”, RSR Research, July 2012

11. Supply Chain is Running Out of
Runway
Top 3 Supply Chain Execution Operational Challenges
Winners Others
Our supply chain is not designed for the current/projected volume of 57%
direct-to-consumer shipments 36%
Difficulty managing the right level of labor or warehouse capacity 43%
against order volumes 16%
We don't have the flexibility to respond to unexpected supply chain 38%
exceptions like late shipments or short shipments 28%
Store demand is erratic and difficult to predict 33%
48%
We haven't figured out how to align incentives for sales credit for 29%
cross-channel sales. 52%
Too many store-store and store-DC transfers 24%
20%
We don’t know how to forecast demand for non-traditional selling 24%
channels yet 40%
Our warehouses can't move fast enough to deliver on customer 19%
expectations 32%
Short buying “outside of the system” by operations to replenish 14%
unexpectedly fast movers throws off forecasts 16%
Source: “Executing on the Promise: Retail Fulfillment 2012”, RSR Research, July 2012

12. Inventory & Fulfillment Remain
Sticking Points
Cross-Channel Process Consolidation
Importance vs. Progress
Very Important Synchronization Done or In Progress
Customer shopping experience 32% 100%
Loyalty management 35% 70%
Inventory visibility 37% 61%
Fulfillment 30% 59%
Customer segmentation 50%57%
Store Operations 27% 54%
Digital marketing 40% 54%
Social media marketing 43% 53%
Demand Forecasting 33% 46%
Pricing strategies 46%
48%
Mobile marketing 30% 39%
Procurement/Assortment 39%
36%
Customer call center 25% 35%
Traditional advertising 22% 32%
Source: “Omni-Channel 2012: Cross-Channel Comes of Age”, RSR Research, June 2012

13. Visibility – The Hardest
Cross-Channel Process Consolidation
"No Plans"
Winners Others
Inventory visibility 29% 35%
Store Operations 24% 26%
Demand Forecasting 24%
23%
Traditional advertising 24%
22%
Customer call center 18% 32%
Pricing strategies 12% 22%
Mobile marketing 12% 17%
Fulfillment 9% 12%
Customer segmentation 6% 26%
Procurement/Assortment 5%6%
Loyalty management 0% 26%
Customer shopping experience 0% 13%
Social media marketing 0% 9%
Digital marketing 0%
0%
Source: “Omni-Channel 2012: Cross-Channel Comes of Age”, RSR Research, June 2012

14. Retailers Can’t See Very Far
Inventory Visibility: Value vs. Actual
A lot of value A lot of visibility
System-wide inventory visibility 88%
44%
DC available inventory 78%
60%
Store inventory levels 78%
48%
Online/Direct channel inventory availability 69%
41%
Inbound to DC inventory or orders 62%
39%
Store on-shelf inventory levels 55%
20%
Inbound to store inventory or orders 52%
27%
Visibility into drop-ship vendor inventory 39%
6%
Source: “Executing on the Promise: Retail Fulfillment 2012”, RSR Research, July 2012

15. Fixing Internal Systems is a Long
Road
Top 3 Supply Chain Execution
Organizational Inhibitors
Winners Others
Inventory and order management systems are not integrated 60%
across channels 41%
Our systems and processes are too channel specific 60%
50%
Our supply chain is not designed to support omni-channel 50%
fulfillment 59%
We don't have the right metrics or incentives to drive supply 40%
chain efficiencies 36%
The dominant channel fears cannibalization 20%
14%
Lack of confidence in inventory accuracy 20%
18%
Lack of active top-level support for a cross-channel strategy 15%
41%
Facilities costs in stores are too high, posing a barrier to in- 10%
store fulfillment or shipment 18%
Lack of active top-level support for supply chain issues 5%
23%
Source: “Executing on the Promise: Retail Fulfillment 2012”, RSR Research, July 2012

16. Why Isn’t Drop Ship on the List?
Current Fulfillment Capabilities
Implemented/Rolling Out Budgeted/Evaluating Planned/Desired No Plans
Direct to consumer fulfillment from our DC 55% 15% 12% 18%
Drop ship from vendor direct to store 45% 5% 16% 34%
In-store purchase of online inventory for shipment direct to
41% 13% 38% 8%
consumer
Ship from store direct to consumer 38% 18% 23% 21%
Online visibility into in-store inventory 37% 24% 29% 11%
In-store inventory pick for consumer in-store pick-up 37% 18% 24% 21%
Store-to-Store transfer for pick-up in-store 34% 16% 34% 16%
Ship to store from "Direct" DC for consumer in-store pick-up 34% 16% 39% 11%
In-store reservation of inventory for consumer in-store
29% 16% 32% 24%
purchase
Drop ship from vendor direct to consumer 28% 8% 21% 44%
Source: “Executing on the Promise: Retail Fulfillment 2012”, RSR Research, July 2012

17. Ask Yourself These Questions
• What is my growth strategy for my online channels?
– More customers?
– More from existing customers?
– More assortment?
• What visibility does my company have today?
• When was the last time my company explored virtual
inventory?
• How many of my suppliers have “gone direct”?
• What percent of my suppliers’ inventory do I carry on my
site?

18. TURNING YOUR MAGENTO
STORE INTO AN ENDLESS AISLE

19. What do you need?
1. Lots of Products
2. Which means lots of vendors
3. Which turn into a lot of orders
4. Which turn into a lot customers
And do it all with out it costing you lots
of time and money …

20. How do you plan on …
• Getting Products into your
Magento store?
– What file types will you accept
– What data do you want
– Do you want to put everything
on or just some things
• Getting orders to your
vendors?
– Can you take a Magento order
from multiple vendors and
break them up into individual
vendor orders?
– Can you get up to date status
on those orders for your
$
$
$
customers

21. You need to be able to do …
• These tasks prior to exchanging data with
your trading partners:
1. Create the requirements and business
processes you want your vendor community
to follow
2. Publish your Trading Partner Specifications
with required and optional fields
3. Determine the vendor setup process
• These tasks concurrently with the vendor
on-boarding process
1. Determine which systems need data for drop
shipping
2. Develop the Integration points between
Magento, your ERP and your vendors
3. Automate the integrations

22. Typical Drop Shipping Integration
Challenges Consumers
ERP
Consumer
Orders
Product (x 1,000’s)
Data
Product
Vendor Vendor Data ✖ Multiple Formats for Product
Orders Orders
Data
✖ Your ERP needs to create vendor
orders out of a consumer/retailer
order
✖ Each vendor is a unique
integration for each document
(x 100’s)

23. Introducing DropShip Commerce
Dropship Commerce is the scalable online platform for integrating and
managing drop ship partners, inventory, data, and orders. By handling the
exchange of data through a single connection and integration point,
Dropship Commerce helps trading partners streamline operations,
generate more sales, and fulfill more orders using the virtual supply chain.

24. DropShip Commerce Product

25. Robust User Interface
Provides:
100% Open Standard based
SaaS - No Hardware or
Software required
A single place to aggregate,
normalize and filter vendor
product information.
Visibility to the entire drop
ship order lifecycle
Get up to the minute view of
your inventory-less supply
chain

26. Drop Shipping Simplified
Consumers
ERP
Consumer
Orders
Product
(x 1,000’s)
ü Single integration point to
your vendors and Magento
Vendor Product Vendor Product
Orders Orders
ü Ability to split consumer
orders into vendor orders
ü Ability to support multiple
vendor formats
(x 100’s)

27. GETTING STARTED

28. Magento Extension
• Connector Overview
• On Connect Marketplace Today
• Sign Up with Us First

29. Set Up Process
• Easy to get set up
• Month to Month SaaS subscription
• To get started:
– sales@dropship.com
• Webinar on Magento & QuickBook Extensions
– March 27th
– Visit www.dropship.com to sign up

30. Thank You
Questions & Answers
For additional information:
todd@dropship.com
(801) 765-6869