Digitizing your business / Class assignment.
Our team developed a new digital business model for Whole Foods market, to support revenue streams and future-proof the business.
This PPT describes briefly the current business model, set out a framework of the category and consumer motivation and presents a new model recommending the benefits of The Personal Shopper - virtual figure.
[jun 2011]
Digitizing your business model - Professor: Neil Perkin
Master of Digital Marketing - HULT London
Illustration: Carlos Rivas
[Originally the characters were created as a representation of colleagues in Advertising]
2. 2
4
1 6
5
3
1. Manuel del Aguila - SEO 4.. Martha Tolosa - Email Marketing
2. Daniel Aufricht - Strategy and Planning Integration 5. Megan Lowe - Social Media
3. Nataliya Mogilevskaya - Mobile 6. Pratanchai Permpanich - Display
5. Whole Foods
“We seek out the finest natural and
organic foods available, maintain the
strictest quality standards in the
industry, and have an unshakeable
commitment to sustainable agriculture.”
Founded in 1980 in Austin, Texas.
Growth throughout the 1990’s.
Acquired more natural and organic food companies.
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6. Values:
• High quality natural and organic products
• Delighting customers
• Supporting employee happiness and excellence
• Creating wealth through profits and growth
• Taking care of community and environment
• Create mutually beneficial partnerships with
suppliers
• Promoting health of stakeholders through healthy
eating education
Consistently ranked among the most socially responsible
businesses.
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7. Current
Business Model
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8. Offline Online
SHOPS WEB SITE
Full-version Mobile
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10. Content
Gift Cards Cooking Classes
Coupons Stores
Deals
Location
Recipes Comments
Information products Registration
List of products
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11. Shopping list
Products Recipes
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13. What products or services do
you usually purchase online?
Econsultancy Survey (2010)
74% of the respondents usually buy these products online:
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14. • These statistics show an increase in this trend,
which supports the potential of the business model
• People trust this kind of service and embrace the
online shopping system
• People would sometimes rather pay more for a
service in order to save time
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15. Why do people shop online?
Nielsen Online survey of 1000 people shows that people
shop online because of the following reasons:
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16. • Tight schedule
• Stressed out The Big City
• Time is essential
• Traveling is expensive
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17. London Market
Organic & Online Online Likelihood Market
Natural? grocery personal of online Share (incl.
shopping? shopping? shopping? offline)
Not yet, but Not yet, but Likely to take 1-2%
soon with our soon with our share from
model model below stores
Branded range " 4% 4.4%
as well as other
organic / natural
brands
Small branded " 14% 16.5%
range
Small branded To an extent, 66% 30.3%
range, adding not with advice
non-food range and guidance
soon
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18. Organic food is no longer just a niche
“The niche is gone. Organic has gone mainstream.”
New opportunity in “special diets”, including those
related to food allergies.
“Food allergies in children have risen 18% since 1997,
affecting 3 million children today. Nearly 4% of adults, or
12 million people, have food allergies. Another 3 million
people can't consume gluten (ceilac disease). In this niche
you could include aging baby-boomers who focus on
low-sodium, low-fat, dairy-free diets or people who
adopt alternative diets like veganism.”
Sources: http://mattpaxson.blogspot.com/2008/11/heath-foods.html
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19. What customers want
- Speed
- Convenience
- Healthy Alternative
- Quality over quantity
- Something trustworthy
- Value for price
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20. Consumers’ behaviour
Fraser McKevitt, retail analyst:
“With economic uncertainty increasingly in the news
it is no surprise that shoppers are being cautious with
their spending”
Sources: http://foodanddrinkbusiness.com/?p=3803
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21. The Digital Model
Needs Desires
Quick Quality > Quantity
Convenience Trustworthy
Healthy Best value
Affordable
Customer
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24. Trip Advisor:
Rating of Hotels
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25. New Digital
Business Model
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26. Shopping online is not a novelty.
There is a need in the market that has not
been met.
When people buy goods online, there are often
doubts about the quality of products like fresh
goods.
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27. Insight:
“It is difficult to buy fruits or vegetables online,
I do not know if the goods to be delivered are
going to be exactly as I expect them”.
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28. Wholefoods is going to enter the market online
with an innovative advantage
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29. The Personal Shopper
It is a virtual figure that is going to help customers
to pick special goods that need to be chosen by an
expert.
There are several options of experts. Customers are
able to see their profiles and choose one of them,
based on their needs.
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30. Lucy. Expert in fruits.
If you fancy the most
exotic fruit salads in
the world, you need
Lucy.
If you don’t know how
to pick a pineapple, or
a juicy melon, don’t
worry, that is her job.
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32. Laura. Expert in
vegetables. She picks
fresh products for you.
Tell her if you need
your avocado ripe,
to be eaten on 3 days
or however you need it.
Hear suggestions for
this season and try
new salads.
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34. Sam. Expert on BBQ’s.
Sam used to have
BBQ all the time back
at home in Australia.
Tell him what kind of
party you are
imagining and for how
many people and he
will sort it out.
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36. David. Expert on
packed lunches.
Did you run out of the
choices to surprise
your kids at school?
Talk to David and let
your children the chance
to try new healthy
flavours and fun choices
from an expert.
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38. Implementation
1. Collect offline data (loyalty
cards)
1. Collect offline data (loyalty cards)
2. Create programm for
2. Create programm for recommendations
recommendations
3. Build infrastructure andand hire
3. Build infrastructure hire employees
4. Testing
employees
5. Advertising
4. Testing
6. Bring customers online and launch the
5. Advertising
service customers online and
6. Bring
launch the service
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39. -Customers can see shopper’s profiles
-Pick their favourite
www. -Rate them
-Recipes for every season
-Low calories, get fit
-Special occasions
-Send messages, preferences
-Shopping lists can be rated
and edited, can be improved -diet-
-Track purchases of the customers
-Suggestions, posible combinations,
Cross selling.
”Like” the page
Interaction on Facebook
Loyalty card to track
offline performance
-Personalised info Follow your personal shopper
according to preferences for recipes
- Friend to friend sharing
-Offers to promote loyalty
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40. Model’s Dynamic
Deliver Goods and
Other
awaiting feedback: customers’
if negative, an incentive suggestions
will be offered.
Selection of
products for
the customer
Product
Customer
Feedback
Information gathered,
based onthe customer’s
previous shopping
activities, behavior, and Gather information
feedback.
Database
Optimize recommendations,
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channels, according to database
41. After the first phase, more products can be offered:
Candies, Liquors, Deli, Dry Goods…
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42. Goals
• Establish a closer relationship with the customer
• To become a full service online supermarket
• Turning online shopping into a personal
experience: customers and experts can be friends
• Added value by experts: recipes,
recommendations, health advice, cross selling
• Earning customers through personalized channels
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43. ULTIMATELY
Competitive advantage
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45. • Establish basic online shopping capabilities to start with
• Implement personal shopping as a value-added option
• Introduce a loyalty program to track customers’
purchases, lists, behavior, feedback
• Testing before launching online
• Adapting characters after feedback and depending on
seasons
• Hiring analytics experts to interpret the data
• Monitoring the social networks
• Starting in London with a possible roll-out to NY and
LA
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46. Thanks!
Any questions?
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