Five Simple Ways To Use Technology To Increase Health Club Revenues
Lunch-Club.ca New Venture Creation
1. An Opportunity Brief
By
Charles Truong
11139575
Presented to
Gib DE MEDEIROS
New Venture Creation
53-473-11
June 8th, 2012
2. Lunch-Club is a fusion between fast-food delivery service and e-commerce. Think
about mixing Amazon.com and Le Commencal. Our mission is To provide a
healthy, affordable, delicious and convenient alternative to fast-food lunches to
office workers in the Montreal downtown area with an easy to use, easy to get e-
commerce platform to facilitate purchase and delivery.
The Montreal Fast-Food Market is estimated to be close to 1.3B$, though the scene
is crowded and fragmented, there is an opportunity to capture an underserved
market who puts forth their health and are leading busy lifestyle, the young urban
professional.
Leverage new technology for our operations and marketing, Lunch-Club is bringing
to the conventional fast-food market a whole new approach to the customer
experience which will differentiate our company and generate tremendous amount
of attention which we plan to capture and leverage in our marketing strategy. The
mastery of social media, Web 2.0 and e-commerce platforms will provide Lunch-
Club a clear competitive advantage over its traditional competition.
Scalability and it’s operations capacity to stay lean and predictable makes Lunch-
Club a solid project with impressive financial outlook from the get-go. Led by an
ambitious young entrepreneur with experience in the food service
industry, technology and management, Lunch-Club has the right foundation to go
from dream to reality.
The Executive Summary
4. Our MISSION
To provide a
healthy, affordable, delicious and
convenient alternative to fast-
food lunches to office workers in
the Montreal downtown area
with an easy to use, easy to get e-
commerce platform to facilitate
purchase and delivery.
Our GOAL
In the long-term, we want our
brand and concept to develop
into a franchise that can roll-out
in dense urban area’s across
Canada, and then North America
5. 2 Major Trends & Needs
HEALTH
Health issues related to unhealthy eating habits has
been plaguing Canada and Quebec. Obesity rates have
almost tripled in the past 25 years amongst Canadian
children aged 2 to 17*. It is a fact that consumers are
now better informed and aware of the issue, so the
Canadian consumer is getting more health-conscious
stating health and nutrition as a top of mind concern
(31%) when purchasing food vs. 24% in 2 years
earlier**
*Childhood Obesity Foundation, http://www.childhoodobesityfoundation.ca/, Fall 2011.
**Canadian Consumer Spending on Food and Beverage, Agiculture and Agri-Food Canada, 2006
6. 2 Major Trends & Needs
CONVENIENCE
Young Professionals are busier than ever, so
convenience has become a big driver in their
eating habits. A Canadian Consumer behaviour
report states that consumers are looking for ways
to do more, more easily, quickly and enjoyably, and
their approach to food and beverage choices
generally reflects this attitude*. Convenience is
considered to be the main reason consumers
chose their dining option**
*The Canadian Consumer: Behaviour, Attitudes and Perceptions Toward Food
Products, International Market Bureau, May 2010
**Fast Food Nation 2008: A Consumer Perspective on the Fast Food Industry, Research
International USA, 2008
7. The Market:
Downtown Montreal
Fast-Food Market in Montreal: 1.3B$*
More than 150,000 Office Workers** downtown
that’s over 50% of all Montreal’s office workers
• Information and Culture: 23 295
• Finance: 43 815
• Engineering and Scientific: 51 895
• Government: 25 520
*P.M.Parker, The 2009 Report on Fast Food: World Market Segmentation by City, ICON Group, 2009
**“Le Centre-ville c’est…”, Ville de
Montréal, http://ville.montreal.qc.ca/pls/portal/docs/page/mtl_stats_fr/media/documents/CENTRE-VILLE_SURVOL.PDF
8. The Target:
Young Urban Professionnals*
• 58% men / 42% women
• Aged 25-34
• +65% are married or living with someone
• Have children under 3
• Bachelor’s or post-graduate degree
• HHI over $90,000
• Busy lifestyle & at the crunch-time of
their career
• Restaurant & Fitness are their 2 first
lifestyle choices
*Young Urban Professionnals, Zoom Business Canada, http://canada.zoommedia.com/en-
ca/Targets/YoungUrbanProfessionals.aspx
9. The Competition: Fragmented and Conventional*
Location is the name of the
game. All competitors are
fighting over location for
convenience, the sector is
seeing low innovation in
terms of convenience and
user experience.
The Fast-Food Sector in Montreal is highly fragmented and like most
cities, lead by junk-food national brands. Some emerging trends are
found in ethnic food, but the health trend is mainly served by
extended menus at usual junk-food locations. Healthy lunch options
are underserved in terms of brands, franchises & meal options.
*C.Truong, Fast Food Sector in Montreal, HEC Montreal, April 2012
10. Our Competitive Advantage
We’re a lifestyle brand that is combining what leverages the needs
and purchase behavior of a new generation of professionals. Our
offering is the needed alternative to the same old and unhealthy
fast-food brands. Plus our model is scalable and give us cost
advantage over location dependent and space constraint limited
service restaurants.
Eating Healthy even if I’m Busy at Work
12. How do I join the
Lunch-Club?
Just 4 Easy Steps
13. 1 Visit Lunch-Club.ca
Website
A strong e-commerce and a ergonomic and well-designed website is crucial to
the success of the Lunch-Club. Our target market is used to well-designed and
secure sites, so based on recommendations of an advisor, a leading online retail
entrepreneur, we’ll use open-source Magento’s e-commerce platform and
invest in a web developer to implement, maintain and improve the platform.
14. 2 Sign-up to the Lunch-Club using:
E-Mail Office Address
Phone Credit Card
Number Information
Being part of a club is an exclusive experience, and for 10$ per month including
a free lunch (10$ in credit), the barrier to entry is minimal. Credit card
information is not only for membership, but also to facilitate the payment
process when ordering lunch from any device. Ease of payment limits hesitation
when it comes to pay and has shown tremendous success with e-commerce. In
order to join the club, the office address needs to be on an exclusive
list, candidates can rally people from their office to add their office to the list.
15. 3 Share with friends and colleagues
Facebook LinkedIn
Blogs & Other
Twitter
Channels
Social Media (Online and Offline) is the corner stone of our marketing strategy.
Word of Mouth, and online buzz are key success factors for us to limit the cost
of customer acquisitions. On site guerilla marketing strategies are investments
for location-based customer acquisitions, but by fostering our community and
incentivizing our club members to promote our club and add members, we can
acquire a client-base for a fraction of the usual cost. Social media will also be
our nurturing platform to enforce loyalty, user engagement and repeat
business.
16. Order, share & participate and give
4 feedback to earn points!
+
pts
Gamification is a technique online brand can use to foster user engagement by
incentivizing user participation. We will develop a point system to earn points
for ordering (based on nutritional values), sharing and participating on our
Facebook page and site, and for providing feedback on our menu which will not
only encourage repeat business, but also ensure customer-oriented product
development.
18. How do I use the
Lunch-Club?
Just 6 Easy Steps
19. 1 When do you think about lunch?
7:36 PM 11:47 PM 9:52 AM
People think about their lunch options at different time of the day or
week, some are last minutes, some prepare in advance. The goal is to capture
our member’s lunch ordering habit and offer an easy lunch ordering
experience
20. Ordering is easy and accessible at
2 all time
Mobile App Website
Generation Y and Millennials are connected at all time and are used to easy and
convenient purchasing experience through e-commerce. Through a mobile app
and our website, convenience makes it easy for our members to decide on lunch
and carry-on with their lives.
21. Choose what & when you want
3 your lunch
3
Meal Date Time
Choosing one of 3 meals (of our rolling menu), a date and time makes lunch
planning easy for our busy members, plus the planning process allows us to
have predictable quantity and plan our quantities and capacities
accordingly, therefore we benefit in limited waste and economies of scale.
22. Speedy drop-off delivery to your
4 office on “Lunch Day”
Optimal
Scheduled Targeted Fast Drop-Off
Delivery Office Towers at Reception
By Lunch Day, lunch are ordered and paid for, so we can easily optimize the
delivery schedule and itinerary. Limiting to targeted office towers based on
size and density of the workforce, we ensure speedy drop-off at the reception
areas. Extra capacity on delivery route can also be filled with targeted
promotions and advertisement.
23. 5 Enjoy your lunch!
In the end, it’s also about the lunch
itself, which is why in the first phases and
beta testing, we’ll work with a chef and focus
groups in order to come up with a rolling
menu of healthy and delicious meal. The
quality and taste of our meals are a key
success factor of this concept, so we’ll invest
upfront to come up with a great
offering, and involve our club members in
order to constantly improve it.
24. 6 Provide feedback and suggestions
Satisfying our customers is a key success factor to ensure repeat business. The
advantage with our e-commerce online strategy is that our target customers
are used to get engaged with online brands. Our nurturing and engagement
strategy is to involve our members in the product offering with their feedbacks
and suggestions through our channel of communications: website, Facebook &
twitter.
26. 3 Keystones of our Marketing Strategy
The Brand & Identity
Aggressive Customer Acquisition
Loyalty: Nurturing & Engagement
27. Instead of having the typical ethnic product differentiation, Lunch-
Club targets lifestyle to the niche segment of 25-34 busy
professionals working in Montreal’s Downtown. We offer healthy
meals options that fits our target segment’s busy lifestyle and
Product Niche quest for convenience and health when it comes lunch options.
Distribution is key for us, since we’re an office delivery
service, we’ll set ourselves apart from the delivery
competition with a fast and timely delivery service. Part of
what defines the Lunch-Club is an easy and fast way to lunch Distribution,
at the office, just one-click away. Convenience & Speed
Leveraging the benefits of e-commerce and applying to the food
service industry is one of the secret sauce for Lunch-Club. By
facilitating the payment through one-click on the website or
mobile app, we’re shortening the payment process and facilitating
repeat business by keeping club members payment information
Innovative and offering perks like credits upon recurring usage of the service.
Ordering
The Brand & Indentity
28. Social media is key in our customer acquisition
strategy. Especially since we’re targeting millennials
that are heavy users of social media technologies
such as Facebook and Twitter. Mechanism like
referrals and grouping in order to sign up as a club
member are great tactics to ensure as much social
media exposures as possible. Incentives for
members to share their feedback on the services
are also in the plans in order not only to improve
Word of Mouth product quality and alignment with our members’
taste profiles, but for customer acquisition also
since they’ll witness the level of engagement of our
members.
Aggressive Customer Acquisition
29. The fusion of E-Commerce and the food service industry is an
innovation that deserves the launching PR we’ll be able to leverage
for our starting phases. Getting attention from the media with our
innovation is key for our customer acquisition strategy, even if they
are not yet served in our service territory. The goal is get as much
free exposure as possible from the get-go for people to join and Public Relations
request the service to be available for their office.
Before new office towers are added to our service territory, ad-
hoc booths will be setup during lunch hours in mall close to the
new towers to test demand. These point of sales, will allow us
to make some extra revenues, but mainly the goal will be to
make the Lunch-Club known to these new potential locations.
Booth to test Using social media to attract potential members to the booths
locations area, we’ll use similar tactics used by food trucks in the US to
hype our ad-hoc booth’s location.
Aggressive Customer Acquisition
30. Satisfying our customers is a key success factor to ensure repeat
business. The advantage with our e-commerce online strategy is
that our target customers are used to get engaged with online
brands. Our nurturing and engagement strategy is to involve our
members in the product offering with their feedbacks and Satisfied
suggestions through our channel of communications: Customer
website, Facebook & twitter. Satisfied customer = repeat business
and awesome word of mouth for referrals.
The concept of club is important in Lunch-Club, since it creates
a sense of belonging and community for our members. This
differentiate our service versus usual fast-food joints and
restaurants since they’ll feel part of something. The
healthiness of our product and the utilization of local food will
strengthen attachment from our members to the Lunch-Club,
because they’ll be involved in a good cause, for their own
Community health and their community.
Loyalty: Nurturing & Engagement
32. Novelty is not always a good thing, and coming up with such an
innovative purchasing experience is risky if we come in too
naively. In order to mitigate the risk of a slow adoption
period, we’ll introduce the services through multiple phases with
Too Innovative an important beta testing periods with lots of focus groups.
Thought the e-commerce technology is proven, still going with
that option only might stop the viability of our business in case
the central payment system goes down for any period of time.
In order to mitigate the risk, it’ll be important to have multiple Technology
electronic payment suppliers to spread the risks. Dependency
The Fast-Food sector is highly competitive and there are major
incumbents that can also start a similar service. In order to mitigate
that risk, it’ll be important to stick to the marketing plan and ensure
our brand not only survives retaliation but gains notoriety from the
competition’s reaction. Relationship with our club members will set
Competition us apart and give us a competitive advantage as the first mover.
Retaliation
The Risks
34. 4 Major Cost Components
Kitchen
Headquarters
Distribution E-Commerce
35. The Lunch-Club HQ is conveniently located at 1892 rue
Payette in Griffintown, Montreal.
The advantage of that location is definitely lower rent cost
(3410$/months @ 18$/sq.ft)* than the Old Montreal and
Downtown area.
Another advantage is the proximity to suppliers of fresh
and local food at the Atwater market. Healthy ingredient
will be close at hand, and we’ll be developing good
relationships with local farmers through direct contact at
the market. Locally grown ingredients is definitely a trend
Headquarters that we want to build on, and even market it in our
offering, since it’s the top consumer trend in the
foodservice industry**.
6 Months of Headquarters Operations (Rent + Insurance
+ Salaries + Expenses + Marketing Plan) =
160 000$
* Montreal Real Estate Page, http://www.firstcorp.ca/offices/1890_2payette.html
**Chef Survey : What’s hot in 2012, National Restaurant Association, 2012
36. The kitchen is key to the Lunch-Club and also a big piece of the
investment. The plan is to purchase new equipment and
renovating the kitchen area to be scalable for future expansion.
Considering the cost associated in setting up a new
kitchen*, our kitchen operations setup budget is set at 50 000$.
Kitchen
The distribution operations has two major costs investment
involved, the delivery van, which we can rent to smooth the
costs (expenses), and the delivery racks to load the lunches
and to unload and deliver when we’re on location. The upfront
investment would be starting with a good off-the-shelf
base, and work with an industrial designer in order to optimize Distribution
rack storage into the van so it remains fit and stable. (~20 000$)
Kitchen Equipment + Renovation + Distribution =
70 000$
* How To Run A Restaurant: Start-Up Costs, Forbes.com, February 2007
37. After interviewing a successful entrepreneur that had his
own e-commerce business in clothing retail, he advised
me to use an open-source platform called Magento. In
order to reduce investment cost, I wouldn’t own the
hardware it runs on, and use a hosting service to pay per
use, which will reduce the upfront cost. (expenses)
But in order to run the platform I’ll need to have a web
developer internally and an experienced consultant
E-Commerce (professional services) for the first setup months. (~20
000$)
3 Months of E-Commerce Professional Services =
20 000$
38. STARTUP BUDGET
ITEM IN OUT
Headquarters Operations - 160,000$
Kitchen - 50,000$
Distribution - 20,000$
E-Commerce - 20,000$
Personal 25,000$
Bursary and Contest 50,000$
TOTAL - 175,000$*
* Bank and Government Program Loans