David Foote, Owner, Vesalius Health - PowerPoint Presentation

David Foote, Owner, Vesalius Health From Pain Points to Sweet Spots Delivery Visual Search Amy Vener, Head of Retail Strategy, Pinterest

IRCE 2019- Ecom Tech Workshop Session 7 – From Pain Points to Sweet Spots2 What is your biggest pain point that you are looking for technology to solve? LIVE POLL Text “ FFC817 ” to 22333 to join, then A B C D E to vote Visual Search Delivery Alternative Payments VoiceChatbots/Customer Service

IRCE 2019- Ecom Tech Workshop Session 7 – From Pain Points to Sweet Spots 3 Distributor, dealer, retailer of sports, occupational, and physical therapy goods First sales in 2012Previously employed 4 person direct sales team. Purchasing consolidation and ecommerce lead to elimination of their positions 2300 Active SKU’s 10,000 listings on seven ecommerce programs Focus on customer service metrics Based in Indianapolis

Focus on Metrics: Reduction in waste:Labor Costs Customer Service ExpenseIncrease in:Margins Metrics4

Delivery Pain/Symptoms: Late arrivals Non-arrivalDamaged arrivals Fake non-arrivalExpensive arrivalReturns with NSA Negative feedback5

Ecommerce Shipping Problem 6 Fast shipping is the expectation Fast shipping is expensive Sellers often limit fast shipping to very small items or to local addresses, which limits buy box opportunities Amazon is already making up most of the US ecommerce sales… Amazon is already making up most of the US ecommerce sales… More than 50% sold by 3 rd party sellers Amazon is already making up most of the US ecommerce sales… … however they rely heavily on 3 rd party sellers… Amazon is already making up most of the US ecommerce sales… … which experience major pain related to shipping cost & time Sellers need a solution that can help get their products seen and reduce shipping costs 6

Negative Amazon Feedback To be inserted Thanks Amazon & USPS! 7

Impacts of Delivery Pain: Negative feedbackAdded re-ship expense Increased staff time from added buyer emailHigher COGSDecreased margins 8

The 5 WHYs: A technique originating with W. Edwards Deming in the late ‘40s in post-war Japan Refined at Toyota Motor, leading to the Toyota Production System- focusing on waste Repeating WHY five times to a problem peels away the layers of the problem, leading to it’s causeIt works in ecommerce! 9

Solutions to Late Arrivals: Set selling platform arrival times to meet your order processing, packing, and delivery capabilities Develop specific tactics to ship orders within one day of order reception StaffingInventory/no drop-shipDevelop relationships with UPS/Fedex/UPS etcDoing so allowed Vesalius to push back pick-up times to 5PM, allowing for more same-day shipments10

Solutions to Non-arrivals (INR) Are they “false complaints?”If so, file complaint against buyer with Amazon Develop template response for emails response:Check with neighbors, roommates, etc. Describe package (we ship primarily small stuff which often gets buried on desk)Ask buyer to contact local USPS (we provide local phone number of USPS branch to buyer)Use signature delivery for expensive itemsShip via UPS/FedEx Ground for expensive items 11

Buy insurance for high-value goods Teach staff to note profile orders:Hotels in convention cities- call front desk We have specific products that buyers purchase in USA to avoid import duties Staff has been trained to review expensive orders to areas/countries experiencing high INR rates Solutions to Non-arrivals (INR) 12

Solutions to Damaged Arrivals: Invest in high-quality poly bags We found higher cost = less damage in USPS sorting machines About 1.5 cents higher per bagGet photos of damaged packaging from customer for USPS Priority Mail, and USPS to file damage claimsChoose what you ship carefully Chocolate in the summer?Liquids freeze in the mailbox- and explode 13

Solutions to False INR Claims: Have strongly worded email template including the phrase “postal inspector” Ship expensive items with USPS signature/ and or via UPSFile complaint with Amazon against buyer if suspicious 14

Solutions to Negative Delivery Feedback: Worth repeating- Using the 5-whys will help reduce negative feedbackImprove customer communication skills Provide clear solutionsRespond quickly and accuratelyDo what you promiseTake responsibility Petition Amazon to remove the feedbackDo this to ALL feedback! 15

Solutions to Expensive Arrivals: (Shipping Costs) Price with knowledge of your fully allocated Costs of Goods Sold Include shipping, packaging & labor New marketplace solutions 16

Co-opetition is… the act of cooperation between competing companies with partial congruence of interests to gain advantage by cooperation, generating more value by working together compared to the value created without interaction and thus struggling to achieve competitive advantage 17

Co-opetition In Action SCOPE: UPS picks up a package from the warehouse or distribution center and moves it through the UPS parcel network UPS delivers package to USPS for the “last mile” delivery to a residential address UPS and USPS share the revenue 18

Results: Increased market share and revenue Lower cost from optimized distribution efficiency Lower delivery charges for customers Improved customer serviceSustainability and lower CO2 emissionsBut does it meet Delivery Standards(Probably not) 19

POWER OF MANY The Next Evolution in Ecommerce Fulfillment Value Creation in the Networked Economy through Strategic Co-opetition 20

Value Proposition: Sellers work together to ship orders for one another The seller closer to any given customer ships to that customer No compromise to carrier preference or negotiated rates 21

OLD WAY Traditional Shipping NEW WAY Peer-to-Peer Shipping HOW IT WORKS Avg. cost: $15.82 x 3 packages $ 28.50 $47.46 Avg. cost: $9.50 x 3 packages 40% 2 DAYS FASTER CHEAPER 22

PROFITABLE SHIPPING 40% LESS SHIPPING COSTS 2 DAYS FASTER SMARTER ROUTING TRUSTED SHIPPING NETWORK Offer Fast 2-Day Shipping Nationwide at a price lower than Ground 23

Gets it there quicker (2 days faster) Gets it there cheaper (up to 40% less shipping costs) Less carbon footprint (better for the planet) Results:24

Autonomous Pizza Delivery Vehicle Developed by Dominos (DRU) Prototype keeps food and drinks at the appropriate temperature Sensors help it navigate the best travel route for delivery Future of Delivery: Robots25

Amazon Prime Air (Drone Delivery) Goal: to safely deliver up to 5-pound packages in less than 30 minutesCurrently working with countries around the globe on aviation safety Future of Delivery: Drones 26

Reduction in delivery pain points = Reduction of waste Flatten payroll expense Lower COGSImproved metricsIncreased sales/Buy Box Higher marginsLess STRESS! Summary: 27