E-Commerce Techonomy Tucson Video

Maelle Gavet of Ozon.ru on How ‘Offline’ Ideas Can Help Business

Ozon.ru is Russia’s biggest online retailer, but its business is built on an offline foundation. In this video from Techonomy 2011 in Tucson, Ariz., Ozon.ru CEO Maelle Gavet discusses how cultural quirks unique to Russia require offline, person-to-person customer service to drive online commerce. Gavet has succeded in building Ozon’s brand by embracing robust offline systems.

Gavet: Good afternoon, everybody. Just a few words about Ozon. Ozon in Russia is the biggest online retailer, as you mentioned. It is also the biggest online travel agency.  If you want, Ozon is the mix of Amazon and Expedia in Russia. Before Ozon I was working for the retail practice of the Boston Consulting Group, mainly focusing on offline retail.  When I got this new job at Ozon I was really excited, because I was like, “Great, I’m going to do online business. It’s going to be fun. I’m going to discover a completely new business: a new world, the internet world.” Ozon back then was a $100 million turnover company, and I felt that we really could boost the sales of this company by importing more western technologies, by implementing online marketing best practices, by making online shopping easy, efficient and hassle-free. For the few of you who have been in Russia, in a Russian supermarket, I’m sure you understand what I mean by making a hassle-free shopping experience a key tool to attract more customers—definitely not the best experience in the world.

So what happened was that after I started working for Ozon, I discovered that to attract, to educate Russian consumers to the art of online shopping what I really needed to do was focus on their offline experience. What does that mean exactly? It means that, for example, Ozon has a call center that works 24/7 and that the phone number of this call center is on every single page of our website. As of today, 30 percent of our first time buyers buy through our call center. Ten percent of our loyal customers still buy through our call center. They have a computer, they look at the website, they sometimes even explain to our operator how to make the order, but they still want to have a human being on the phone. It means also that online marketing is obviously an important part of our business, but so is offline marketing. We spend a lot of time, energy, resources and money on doing advertising on TV, on billboards, on radio, and in newspapers.  Because for the Russian consumers, that makes your company strong—that makes your company solid. That makes us a company they can trust because they see us offline rather than just online. It means also that we have a thousand pick-up points with three thousand people that basically run these pick-up points. And a pick-up point is a small offline shop where customers can come and collect their orders, and, once again, talk to a human being. And finally, it means that we have to offer cash on delivery, because even our loyal customers who have been with us for years and are used to buying online still want to be able to pay cash after they have touched the goods, after they have opened their orders and understand what this is all about. As of today, Ozon sales are 80 percent cash on delivery.

So just to summarize this three-minute speech, since I became the CEO of the biggest online retailer in Russia, I actually have never spent so much time thinking about offline and how to make offline better.  Thank you very much.

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