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SAQ Presented by: Delattre Therese Groizard Carlos Petersen Pablo Content What is SAQ? B2C site B2B solutions Value creation & capture Conclusion 2 Société des alcools du Québec (SAQ) State-owned corporation responsible for the trade of alcoholic beverages. (Monopoly) since 1921 5500 employees $2.4B annual sales(2003) ($540M net income) 77% Consumers and 23% Permit Holders Network: – 30 Express, 290 Classiques, 66 Sélections and 2 Signature stores – www.saq.com Web site VSOP System – 6 SAQ Dépôt stores and 3 bulk wine points of sale. 3 Globalwinespirits.com SAQ Other Buyers Public B2B $$$ 50% Mediagrif, 50% SAQ $$$ International Wine Makers B2C Agents Customers B2B + + Local Wine Makers B2B SAQ.COM = Most purchases Permit Holders B2C = <.2% of sales 4 Net income 1994-2004 Distribution of Selling Price March 2000 5 How much goes to IT? 6 www.saq.com Purpose of site Age constraints Delivery constraints Prices are the same 7 8 B2C-Features ABCs of Wine, ABCs of beer, ABCs of Spirits Recipes, games, advice Promotions Links to Clubs & Associations Extensive list of related sites links & Search engines The Courrier vinicole publication (membership) Groceries & Convenience Stores Section Business-to-Entertainment section – Gift Certificates – Gift Shop – Business receptions ideas 9 Measures of Success Surveys & Customer complaints 9000 visits daily & growing The Courrier vinicole publication 2000 members SAQ e-Newsletter – 115,000 users 1500 orders/week @ 93% efficiency 10 Sites Comparison: B2C SAQ.com PAWine.com Wine.com Ownership State owned State owned Private retailer Products 3,000 labels 55 countries Yes Over 1000 wines Yes 2500 labels Domestic & Intl’s Yes Registration Required Required Optional Return policy 30 days 30 days 30 days Customer Service Phone & e-mail Phone & e-mail On-line specialists available Delivery service Canada Post 3 options 3 – 5 days delivery Free delivery >$50 On-line throughout delivery QC, Canada UPS 2 days delivery Free ship to liquor store of choice in PA UPS, FEDEX, DHL 7 - 10 days delivery Max 24 bottles for 12 Sates On-line 24 delay tracking PA, USA 30 States in USA & Japan • Wish list program • e-Newsletter • Courier Vinicole • Outlets link Wine connection program (sampling) • Wish list program • e-Newsletter • Party planner E-catalogue Order tracking Market Special features 11 12 Business to Business One private (SAQ-B2B) and the other one public (Global Wines and Spirits – GWS). Globalwinespirits.com – – – – – – 5 languages Call for tenders Spot market place Catalogues Private extranets File management/conversion 13 SAQ-B2B.com A private B2B transactional portal owned and operated by the SAQ’s e-Commerce Division No membership fees, product list or per-transaction fees to pay SAQ is the only buyer on the portal The SAQ online saves time, effort and money (purchasing, shipping, and receiving) 14 SAQ-B2B.com (con’t) The only equipment required is a computer and Internet access Highest industry standards for security, boasting data encryption, back-up support systems and firewalls Easy-to-use functions (call for tenders, logistics mgt, doc sharing, freight forwarders, and shipment tracking) 15 The questions of added Value How does SAQ add value to its core business through its web site? How is the value created captured ? – By SAQ – By Suppliers – By Customers – By Taxpayers 16 How can a wine retailer add value on-line Value added Knowledge base Category search Personalization Exchange forums B2C Up-stream B2B Down-stream B2B SAQ Yes Yes No No Yes Yes No 17 Benefits for SAQ of going electronic Characteristics of the Internet Reach Flexibility and ease to use Personalization Interactivity Asynchronous communication E-Commerce transactions B2B SAQ application benefits Restricted to QC Benefits customers (no impact on growth) Potential not exploited Forums not available E-mail support provided Optional to customers and compulsory to suppliers Limited to suppliers 18 Creation of value Reduction of transaction costs (relative low importance) Accessibility of knowledge base to customers – Products – Prices – Retail stores data Convenience of home deliveries to customers Certainty of product availability at retail stores Electronic transactions with suppliers (B2B) 19 Increased process efficiencies due to systems integration throughout the Supply Chain On line E-Commerce transactions linked to SAQ’s ERP system Suppliers’ integration via: – B2B portal (transactional via EDI) – Global Wine & Spirits portal PRP (Planned Replenishment Model) to be implemented 20 How is the created value being captured? By SAQ – Enhancements achieved through site don’t play as a differentiating factor – Cost reductions obtained not even quantified – Market: Captured and limited to QC • Growth of market in Quebec not a government priority • Limited cannibalization from outlets • Promotion of site self restricted 21 How is the created value being captured? By SAQ’s suppliers – Increased efficiency through electronic transactions – Improved logistics – Access to on-line sales information (overnight updates) – Close communication on promotional activities (through agents) 22 How is the created value being captured? By SAQ’s customers – Access to knowledge base and specialized consulting services – On-line ordering convenience – Home delivery service (flexible service optional) – Access to on-line information on inventories at outlets – 17/5 Call center (complementary info.) 23 How is the created value being captured? By taxpayers (as stakeholders) – Transparency: On-line access to all information 24 Conclusion Small part of a larger supply chain integration strategy Some products are not easily or desirably sold online The SAQ is using the web technology to complement its service to the consumer and to the suppliers Whatever time is saved from buying online is time to be used to savor the wine! 25 THANKS ! 26