Stanford University / Venture Lab / Technology Entrepreneurship / Class of 2012Opportunity Analysis Project InnoShop Optimisation of shopping activities
Concept Prevalent shopping trolleys and shopping tills are inconvenient for customers. Supermarkets do not utilise potential capabilities of currently available innovative products whose synergy would bring benefits to sellers and buyers alike. Our team is analysing reasons for this problem and constructing a system which supermarkets would be willing to use. We offer shopping optimisation system, currently consisting of innovative shopping trolleys with integrated bar code scanners, and additional services enabling stores to employ those trolleys optimally. Trolleys and supplemental articles can be sold and rented.
Understanding German market size Distribution of the number of stores is seen in the below pie chart A total of 23369 stores were REWE group has the most found which were either potential to be exploited super/hypermarkets for our business
German market Estimated Store current market (in USD) EDEKA 12300000 LIDL 9900000 PLUS GROUP 8520000 REWE GROUP 26817000 ALDI 12570000~70M$ is the current marketfor the shopping carts in TOTAL 70107000Germany
Understanding the German Cart Market The base for the calculation in the previous slides is as follows: The cost of each shopping cart is averaged to be 50 USD based on www.alibaba.com The average number of carts in stores is taken around 60 according to our observation in Hamburg, Berlin and FrankfurtThe overall estimate of the Market that our Idea can potentiallycapture is certainly above 70M$
Survey with managers What differentiates your brand from the rest? 1 manager: Supply chain management 1 manager: Staff management 1 manager: Store organisation 2 managers: leadership in discount products “We as a brand strive to be market leaders in supply chain and currently have one of the best supply chain management models across the industry.” Brand Manager in Frankfurt area, 2012
Survey with managers Are you currently interested in finding new ways to distinguish your brand? 4 Managers: yes 1 Manager : Currently no “Results of the last financial year are not so encouraging for us to invest in this technology right now…” Marketing In-charge in Hamburg area, 2012
Survey with managers Would you be interested in implementing pilot project with us? a. 3 managers: yes b. 2 managers: no, our current system is satisfactory “We focus mainly on attracting selective target customers and have various schemes to achieve it, hence I would tell you that we value innovation, especially in technology that would help us in brand building and thereby act as key market differentiator ” Marketing In-charge in Berlin area, 2012
Have you Would you Would you likeSurvey with 20 end ever decided use simple to have more Participant not to shop self-checkout compartments users in Germany (end user) Gender Social status after seeing system if it to fit goods number a long saved you more queue? time? conveniently? 1 M Student Yes Yes Yes 2 M Pensioner Yes Maybe Maybe 3 F Student No Yes Yes 4 F Unemployed No Yes Yes 5 F Pensioner Yes No Maybe 6 M Working Yes Yes Yes 7 F Working Yes Yes Yes 8 F Other / did not state No Maybe No 9 F Working Yes Maybe Yes 10 M Unemployed Yes Yes Yes 11 F Pensioner Yes No No 12 F Student No Maybe Yes 13 M Student Yes Yes Yes 14 M Working Yes Yes Yes 15 F Other / did not state No No Maybe 16 M Pensioner No Maybe Maybe 17 F Student Yes Yes Yes 18 M Pensioner No Maybe Yes 19 F Working Yes Yes Yes 20 M Working Yes Yes Yes Total: 20 Female: 11 Working: 6 Yes: 13 Yes: 11 Yes: 14 Male: 9 Pensioners: 5 No: 7 Maybe: 6 Maybe: 4 Students: 5 No: 3 No: 2 Unemployed: 2 Other / did not state: 2
“I do not like standing in long queues. They are especially time-wasting during peaktime after I finish work, and need to go shopping. Therefore I am going to use anycheckout system if it will save time for me.”Male student in Berlin area, 2012“If I need to buy only 1 or 2 things fast, and see a lot of people queuing, then Isometimes put things back and go out.”Female pensioner in Hamburg area, 2012“I shop at department store one time in a week, so I buy a lot of stuff at once. Icould put small and fragile items safely and conveniently into differentcompartments of the cart, if only such thing existed.”Female student in Berlin area, 2012
Open questions for end users (20 participants): What is one most annoying thing about shopping in this department store? 15 participants: Long queues / long waiting time to be served 3 participants: Obstructions to free moving (other carts on the way, too narrow crossings at certain areas) 2 participants: No opinion / no annoyance What do you think about the trolley you are currently using? 11 participants stated moderate dissatisfaction 4 participants: high dissatisfaction 2 participants could not tell whether they like current trolley or not 3 participants liked the cart “I don’t like shopping at all. I mostly hate to stand waiting for a long time in a queue. Shopping trolleys look like they are designed only to be conveniently separated from each other, but not used for convenient shopping.” Employed male in Hamburg area, 2012
Open questions for end users (20 participants): What main changes would be most preferred by you in the store or the cart (one participant can give more than one suggestion)? 13 participants: Reduce waiting time / reduce queues / install more service points 7 participants: Improve manoeuvrability of the trolley (by reducing width / length of the cart, improving wheels) 7 participants: Lighter weight of the shopping cart 5 participants: Improve wheels for better manoeuvrability 5 participants: Have a shopping list fixing system (use a clip (similar to laundry clip) / use a mini post board and pin attached) 4 participants: Have a mobile phone fixing system on the shopping cart “I don’t like shopping at all. I mostly hate to stand waiting for a long time in a queue. Shopping trolleys look like they are designed only to be conveniently separated from each other, but not used for convenient shopping.” Employed male in Hamburg area, 2012
Customer survey link The customers surveyed could opt any number of changes. 20 customers participated in the survey and this gave us some outlook on how customers could influence the stores to think on improving the existing system of the cart based on customer demandIf this technology would have impact on less waiting time problem ofcustomer certainly there would be a huge opportunity and withestimated market of our product we could built a high demand solutionto the problem.
Pitching the cost of our product Well this needs some caution as the existing system of carts costs 50$, we would need to have a price near to it for conventional competitive strategy or follow blue ocean strategy through innovation. The market space is uncontested as we would be the first to implement an integration of such a concept. In this scenario the competition becomes quite irrelevant and only market differentiator product which is low cost as well. This innovative shopping solution would give the first company that adopts it a brand image and huge leverage that the later entrants would not be as benefitted. This is well supported by the survey results though sample was small, we believe that that’s the normal tendency of a consumer. This would create and capture new demand in the market.