2. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | Mission Statement
“More Than a Store.”
Its mission is to bridging the consumers and vendors in Online-to-Offline
(O2O) business model. To the local community, strive for the “Eggcellent”
value, deliver the best digital shopping experience and introduce the latest
innovation. Moreover, function as a media platform to vendors interacting
with Newegg customers directly.
3. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | O2O sales model
Retail
Customers
Hybrid
Center
Digital
Shopping
Experience
Online Order
Instant Pick-
up
100%
Customer
Satisfaction
1. Natural visit
2. Web site referral
3. Will-call/ Drop-off
4. Promotion/ Event
5. Advertisement
1. Product Demo
2. Digital Kiosk
3. POP Signage
4. Customer Service
Agent
1. Online-to-Offline
Promotion
2. Showrooming
3. Face-to-face
communication
4. Comfort & Security
1. In-store POS (Mobile
Devices)
2. Newegg Mobile App
3. Newegg Website
4. Newegg Premier
5. Newegg Express
1. 8 minutes from
Order to Pick-up (All
small and bulk items)
2. Webrooming
3. Easy checkout (SOP
& payment methods)
1. Customer data
mining
2. Precise Marketing
3. Offline-to-Online
promotion
4. Newegg EggPoint
Lean
&
Efficient
4. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | Revenue Growth Catalysts
Adding new customers & retaining old customers
Increasing consumer spending
Changed pricing strategies
Expansion in core/new markets
Innovative merchandising strategies
Merger and acquisition (M&A) activity
Retail display shelving/ Reverse Showrooming
In-store events hosting
5. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Newegg Hybrid
Center™
Cost Saving
for OPC
Staff
Management &
Training
Grow Sales/
Make Profit
Customer
Experience
Consistency
Remote
Management
Social/
GeoFencing
Small, Bulk &
Open Box
Inventory
Management
Instant Pick-
Up Service
Cross Dept.
Communication
Vendor
Support
Digital
Technology
Integration
Store Design/
Permanent Web
Real Estate
Online Offline
Promotion
RMA
Service
Sales Tracking
Mechanics
Hybrid Center | Mind Map
6. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | S.W.O.T. Analysis
Strengths
• Newegg Branding
• Low Operation Cost
• Existing Will-Call Customers
• Large Product Assortment
• Omni-Channel Marketing
Weakness
• Lack of Retail Experience
• Retail Customer Behaviors Analysis
• Limited Retail Space
• Limited Customer Agents
• Lack of Digital/Mobile Technology
• Inventory Logistic Infrastructure
• Operation Hours
Threats
• Lack of Vendors Support
• Heavy Cost of Doing Retail Business
• Warehouse Relocation
• POP Expansion of Retail Competitors
• Retail Sales License
• Newegg Online vs Offline
• Natural Disasters
Opportunities
• Vendors’ Retail Program
• New Sales Channel
• 3rd Party Advertising & Resources
• User Experience Lab
• Brand Recognition – O2O
7. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Winter 2016
All Hybrid Centers
Custom System
Build Service
Fall 2016
5th & 6th Hybrid
Centers
Hybrid Center | Development Roadmap
Late April 2015
Indianapolis, IN
2nd Hybrid Center
Sep 2015
City of Industry, CA
RMA System
Late June 2015
Edison, NJ
3rd Hybrid Center
May 2015
City of Industry, CA
Online Order, 8mins Pick-up
Nov 2013
City of Industry, CA
First Hybrid Center
Mid May 2015
City of Industry, CA
Digital POP & Signage
Summer 2016
All Hybrid Centers
In-store Services (Installation
& Repair)
Late Dec 2015
2016 Hybrid Center
Budget Approval
Aug 2015
All Hybrid Centers
Newegg Mobile App
Upgrade
June 2015
City of Industry, CA
Payment Methods
Late May 2015
Hybrid Center Web
Site
April 2015
City of Industry, CA
POS System
Feb 2015
Hybrid Center
Budget Approval
Late Sep 2015
Ontario, Canada
4th Hybrid Center
2015 2016 2017 2018
8. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Indianapolis, Indiana | Demographic 2012
Land area: 361.5 square miles
Population in 2012: 834,852 (99% urban, 1% rural).
Population change since 2000: +6.8%.
Population density: 2,310 people per square mile
Males vs Females Ratio = 48.2/51.8
Indianapolis Median resident age: 33.8yrs (State median age: 37yrs)
Est. median household income: $40,854 (IN: $46,974)
For population 25 years and over in Indianapolis:
•High school or higher: 84.5%
•Bachelor's degree or higher: 28.3%
•Graduate or professional degree: 9.6%
•Unemployed: 8.6%
•Mean travel time to work (commute): 22.2 minutes
Most Common industries (Males)
•Construction (9%)
•Accommodation and food services (9%)
•Administrative and support and waste management services (7%)
•Professional, scientific, and technical services (6%)
•Health care (5%)
•Other transportation, and support activities, and couriers (4%)
•Educational services (4%)
Most Common industries (Females)
•Health care (19%)
•Educational services (10%)
•Accommodation and food services (9%)
•Professional, scientific, and technical services (6%)
•Finance and insurance (5%)
•Administrative and support and waste management services (5%)
•Public administration (4%)
More Reference:
http://www.city-data.com/city/Indianapolis-Indiana.html
http://www.clrsearch.com/indianapolis-Demographics/in/
Newegg OPC 10 – Indianapolis, IN
6161 Decatur Blvd
Indianapolis, IN 46241-9610
9. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Edison, New Jersey | Demographic 2012
Land area: 30.1 square miles
Population in 2012: 101,435 (100% urban).
Population change since 2000: +2.89%
Population density: 3,397 people per square mile
Males vs Females Ratio = 50.6/49.4
Edison Median resident age: 36.3yrs (State median age: 36.7yrs)
Est. median household income: $87,944 (NJ: $69,667)
For population 25 years and over in Indianapolis:
•High school or higher: 90.8%
•Bachelor's degree or higher: 47.2%
•Graduate or professional degree: 20.5%
•Unemployed: 4.1%
•Mean travel time to work (commute): 35 minutes
Most Common industries (Males)
•Professional, scientific, and technical services (15%)
•Finance and insurance (9%)
•Construction (5%)
•Chemicals (5%)
•Health care (4%)
•Accommodation and food services (4%)
•Educational services (4%)
Most Common industries (Females)
•Health care (14%)
•Educational services (13%)
•Professional, scientific, and technical services (10%)
•Finance and insurance (9%)
•Chemicals (5%)
•Accommodation and food services (4%)
•Broadcasting and telecommunications (3%)
More Reference:
http://www.city-data.com/city/Edison-New-Jersey.html
http://www.clrsearch.com/Edison-Demographics/NJ/etail-Sales-Statistics
Newegg OPC 12 – Edison, NJ
45 Patrick Ave
Edison , NJ 08837
10. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Edison, New Jersey | New York City, New York
Bridges & Tunnels Toll
All rates apply to the Lincoln & Holland tunnels, the George Washington, Bayonne & Goethals bridges, and the Outerbridge Crossing.
Tolls are collected entering New York. No tolls are collected entering New Jersey.
PEAK HOURS
Weekdays: 6-10 a.m., 4-8 p.m.
Sat. & Sun.: 11 a.m.-9 p.m.
OFF-PEAK HOURS
All Other Times
OVERNIGHT HOURS FOR TRUCKS
Sundays-Thursdays, 10 p.m. until
6 a.m. the following morning
Number Cash Toll
of Axles Off-Peak Peak Trucks Weekday All Hours
Hours Hours Overnight Hours
Vehicles with Two Axles
and Single Rear Wheels
(Includes Tw o Axle
Recreational Vehicles w ith
Single Rear Wheels and No
Additional Axles In Tow )
Two Axle Buses and
Mini Buses
(Seating Capacity = 10 or
More Business Account
Only)
Three Axle Buses and
Mini Buses
3
(Seating Capacity = 10 or
More Business Account
Only)
& Up
11 Motorcycle 2 $8.75 $10.75 N/A $14.00
$23.00
9 $12.25 $12.25 N/A $23.00
$9.75 $11.75 N/A $14.00
8 2 $12.25 $12.25 N/A
Class Vehicle Type
1 2
More Reference: http://www.panynj.gov/bridges-tunnels/tolls.html
11. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | Revenue Goal
The 2015 key initiative is to acquire sufficient MDF covering the cost in
fabrication and modeling in the first year of new Hybrid Center built.
Q1 2015
Hybrid Center – City of Industry, CA
Vendor MDF $300K
Q2 2015
Hybrid Center – Indianapolis, IN
Vendor MDF $200K (Innovation/Modeling Cost: est. $100K)
Q3 2015
Hybrid Center – Edison, NJ
Vendor MDF $380K (Innovation/Modeling Cost: est. $220K)
Q4 2015
Hybrid Center – Markham, ONT, Canada
Vendor MDF $220K (Innovation/Modeling Cost: TBD)
*Hybrid Center’s Merchandising Program will generate high proportion of the revenue contribution.
Performance Matrix
Sales per Sq.ft
Sales per Store
No. of Stores
1-Yr Sales Growth
12. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | Incomes and Expenses
Marketing Development Fund (Income Contribution Weight: 80%)
1. Retail Show-rooming
2. Events
3. Trainings
Gross Revenue (Income Contribution Weight: 15%)
1. In-store Sales & Promotion
Operation Cost Reduction (Income Contribution Weight: 5%)
1. Newegg Express
2. Shipping Expense
3. RMA Service
4. Customer Service
Cost of Doing Business/ Expenses
1. Personnel (compensation and training)
2. Inventory Management
3. Utilities (e.g. Electricity & Water, Insurance, Internet, General Administration)
4. Equipment & Office Supplies (e.g. POS system, Stools, Beacon)
5. Customer comfort (e.g. Complimentary coffee and snack)
6. Advertising and Marketing (if applicable)
7. Depreciation
13. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Hybrid Center | Resources Required
Personnel Support
1. 1 x Administration Coordinator (Daily Operation/ SOP/ Training)
2. Staff requirement for each Hybrid Center
1 x Will Call Agent (C3 Rank)
1 x Customer Service Agent (C2 Rank)
Retail Operation Licenses (CA, IN, NJ & ONT, Canada)
Assets and Systems
1. Administrative and Functional Management Structure
2. Dedicated Web Site (http://Hybridcenter.newegg.com)
3. Small, Bulk & Open Box Inventory Management
4. Mobile Payment System (Newegg Mobile App)
5. Return Merchandise Authorization (RMA) System
6. Accounting System for Local Sales Tax Collection (In-store purchase)
7. Retail Insurance
16. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Study Case | Amazon @ Purdue University (Indiana)
Location: Purdue University in West Lafayette, Indiana, staffed by Amazon employees
Customers: Students and Facility staffs
Products: Textbooks and all other goods
Services:
“Order online. Pick up here.” (Free One-Day Shipping)
Drop-off for product return
Promotion: “Amazon Student”, the benefits of Prime Membership for $49 a year
Future Expansion Plan:
Second Location on the Purdue campus in later this year
University of California, Davis (Spring 2015)
University of Massachusetts Amherst (Spring 2015)
Location Info
Krach Leadership Center
1198 3rd St. Room 169
West Lafayette, IN 47907-2109
Mon – Fri 9am – 9pm
Sat – Su 12pm – 6pm
17. 2000-2015Newegg,Inc.Allrightsreserved.Confidential.
Reverse Showrooming (Webrooming) | Goulston & Storrs PC
• Have a good inventory monitoring system in place. Perhaps this one is too obvious to mention, but if a retailer does not have
the product, the consumer will buy it from another store that does, or forgo buying at a store altogether.
• Create easy-to-use mobile applications and websites and set up in-store terminals that allow consumers to search for
inventory, specifications, reviews, offers and coupons. Nielsen’s 2014 Digital Consumer Report estimates that 65% of
Americans own a smartphone. And have no doubt that they will use it while in the store (even if they have already done
some research beforehand). Great mobile applications/websites and designated terminals enhance the customer’s in-store
shopping experience and keep the customer on the retailer’s own sites and content.
• Incorporate digital marketing programs in the stores. For example, Target has a website and mobile application called
Cartwheel which generates offer codes online for consumers to use in-store only. And last holiday season, Nordstrom
arranged its in-store displays based on top items pinned on Pinterest, demonstrating that it was listening to its audience and
ensuring that those items were in stock.
• Integrate e-commerce conveniences with in-store ones. Online ordering and in-store pickup is a great example and one that
more and more retailers are offering each day.
• Offer convenient, easy and secure in-store checkout. Eliminate one of the top-cited reasons people avoid stores: long check-
out lines.
• Properly train sales staff. Many consumers still value having their questions answered by real human beings. In a 2013
Deloitte survey, more than half of respondents said knowledgeable in-store staff would make them more likely to buy in-
store.
References:
Reverse Showrooming: Best Buy, Amazon And The Internet Sales Tax by Forbes.com
History of Retail 100 Objects by Intel
Shopper Showrooming: Retailer Strategies in a Smartphone World by mobext
Another web-only retailer will open physical stores by Internet Retailer
Study: how reverse showrooming is shifting the opportunity back to the brick and mortar stores by Evigo.com
9 ideas to take advantage of reverse showroom by A.Bach Online