1. © IPC, 2011 Key Research Findings and Initiatives to Promote E-commerce 1 Jane Dyer Director Markets and Communication International Post Corporation Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

2. © IPC, 20112Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

3. © IPC, 2011 Postal Revenue Projection for 2015 Mail revenue down by 50% and other revenue up by 10% Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 20113 Japan Post Group FedEx Deutsche Post DHL UPS United States Postal Service Poste Italiane SpA

4. © IPC, 2011 The Outlook for E-commerce Growth is Strong Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 20114 Source: Forrester 2010 & 2009 Online Retail Forecast

5. © IPC, 2011 Global Parcel and Express Market ~€133B

6. © IPC, 2011 E-commerce Research Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 20116

7. © IPC, 2011 Research Design Multiple perspectives Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 20117 Legislative Framework Technological Infrastructure Incidence of cross border physical purchases Country of origin of cross border goods Motivations & barriers for purchasing cross border Consumer needs in terms of delivery Purchasing online behavior including choices in delivery options Current return behavior How businesses encompass e-commerce & cross-border trade Potential barriers to the development of e-commerce & cross-border trade Future potential of cross- border trade How postal organizations can better meet the needs of customers Value of a return solution to e- retailers

8. © IPC, 2011 Scope of Research Range of e-commerce market maturity 8Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

9. © IPC, 2011 Online Shopping Behaviour Cross-border Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 20119 Q1.1 & Q1.2 Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 months Experience in Years Frequency of Purchase years * cb – Cross-border Cross-border shoppers are even more experienced and buy online more frequently. LightMediumHeavy Learning process

10. © IPC, 2011 Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 months Online Purchases Top 10 goods for physical delivery Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 201110 Q2.1 & Q2.1A, Q2.2 UKDEFRDKNLBE (n=635)(n=602)(n=608)(n=606)(n=625)(n=611) Average #7.17.85.96.05.44.5 Books, CDs & DVDs Clothes & shoes Computer software / games Electronic equip. & devices Toys & hobbies Small domestic appliances Beauty Computer hardware Office supplies Sports goods

11. © IPC, 2011 E- retailer Business Strategies Cross-border adoption segments in the US 11 Inert No desire Fear fraud Domestic focus No resources for international expansion Embryonics Planning or relatively new to international Ad Hoc orders Manual fraud Inspection No changes to domestic website Emergers Some website changes More experienced See value in expansion Use international facilitators Embracers Very knowledgeable Own fraud detection system Use retail stores (if have them) to increase cross-border sales & get faster delivery May use country URLs or translations Exploiters Long-time players Positioned with superior items or best pricing over in- country or other retailers Use referrals Use other portals Use own seamless shipping arrangements “It’s almost like we take international orders, but we’re not actively trying to sell our product to international customers.” 11Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

12. © IPC, 2011 (n=389)(n=457)(n=319)(n=307)(n=381)(n=269) Return Services Incidence and methods of return Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 201112 UKDEFRDKNLBE 61%76%52%51%61%44% % Ever returned goods Take to a post office/collection point Organise a specific pick up Take it back to the store Return immediately at moment of delivery Base: Individuals with internet access at home who purchased goods for physical delivery in past 12 monts and EVER RETURNED goods 3.26.62.94.04.84.0 Average number of returns

13. © IPC, 2011 Conclusions and Learning Success in delivery 13 Price Reliability Choice Information Cost Reliability Track & trace Flexibility in capacity Delivery Partner Cost effective Quality service Drivers for Success Segmented pricing models Proactive information management Logistics expertise Relationship management Flexible business model ConsumersE-retailers Customer care Trust Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

14. © IPC, 2011 Cross-Border Customer Demands Low shipping prices Provision of estimated delivery date All-inclusive pricing at the point of purchase Full integration of the tracking data in the web portal of purchase Pro-active notification of delivery to the consumer throughout the supply chain Simple, clear and speedy returns processes 14Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011

15. © IPC, 201115Innovations in E-commerce, The Stanford Global Supply Chain Management Forum and IPC, 1 February 2011 The Future of E-commerce Transfer of retail from Main Street to direct delivery Sharing strategic insights and vision Where is the consumer technology headed? Future development needs of global supply chain? Key issues to overcome? Meeting the needs of the global consumer