Squared Online - NS - Assignment Module 2
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Squared Online - NS - Assignment Module 2

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Squared Online - NS - Assignment Module 2 Squared Online - NS - Assignment Module 2 Presentation Transcript

  • 1 CityStamp digital customer loyalty Squared Online – Niek Sonneveld – Assignment Module 2
  • 2 Executive Summary • Business summary: CityStamp provides small retailers with a mobile app to facilitate a digital loyalty programme to strengthen the bond they have with their customers. By making customers feel valued they will visit their local shops more often which will have a positive effect on the revenue of these stores. • Problem: Small retailers are losing revenue because they find it hard to compete with internet and bigger retailers who compete on price and have bigger marketing budgets. Consumers do not want to walk around with a wallet full of loyalty cards, example. • Solution: We offer a mobile app for stores to exploit their unique selling points. Customers can collect loyalty points at the store by checking in to Facebook or Google+. Customers can have direct contact with their stores through the app which improves the service. Stores can also send special offers to a select group of customers, as well as prospect new clients through CityStamp. Store will also have access to a collective pool of information on customers. • Business model: Stores pay a monthly subscription fee. App is free to download. • Sales: We will sell the app with direct sales as well as partnering retailer associations in London. • Competition: Foursquare and conventional loyalty programme providers are our main competitors. They focus on acquiring new customers. We focus on retention of current customers.
  • 3 Market Opportunity • Greater London population is 8,000,000+ • 30,000 small retailers in London • 95% of shoppers own at least one loyalty card, that makes 7,600,000 in total • 88% of London population use retail loyalty cards on a regular basis, 7,040,000 in total • 40% of consumers say they would be less likely to use a shop that did not offer them • 40% of London households do not own a car and are thus relying on local shops • Smartphone penetration in London is 48%, that makes a total of 3,840,000 smartphone users
  • 4 Competitive Environment Foursquare Foursquare is a large international company with a strong existing client base (40+ mln.). Foursquare is a location based, social network app. With this app users can check in at various places, such as stores, restaurants and bars. This way the user can share his favorite locations with his friends. The app also provides stores to send offers to a select number of people. USP: strong user base, and basically the first ‘local’ app that allowed users to check-in where they were Belly Currently still focused on the US, however given the success so far it is likely to move to Europe soon. This app only sits on the shops’ side, and provides them with an easy tool to offer a customer loyalty program and collect customer data, as well as reach out to their own customers. USP: easy to implement and does not rely on the number of users of an app CityStamp Our app focuses on building a strong relationship between customer and store. They communicate directly with each other. Customers get this extra service and shops can keep their loyal customers happy and turn less loyal customers into more loyal ones. This enables the shops to really offer their clientele something extra. The retention of clients and thus revenue allows small local shops to survive, which then again prevents London high streets from turning into the same row of chain stores. USP: customer loyalty on one end and a place to discover cool new local independent shops on the other
  • 5 Business Model Business model is based on a subscription basis from participating shops 1. 2. 3. 4. 5. 6. Offer shops a digital customer loyalty app for a monthly fee Shop can communicate with their own customers for special offers, customers can collect points without 100 stamp cards filling their wallet CityStamp collects data on purchase behavior and creates a large user base Expand the number of shops participating by sales & marketing efforts Consumer app will be developed for them to explore new shops close to them Shops can pay an extra fee to tap in to CityStamp data to prospect new clients in their neighbourhood, using the app user base
  • 6 Customer Profile Stores • Independent and self-owned • Offers good products at a slightly higher cost than chain stores • Limited marketing budget and knowledge Consumers • Aged 25 – 50 • Prefers local, honest • Service plays an important role • Wants to be up-to-date on the coolest shops around
  • 7 Sales & Marketing Sales • Cold acquisition by visiting stores and showing them a short demo of the product • Contracts with retailer associations to sign up larger groups of stores in one area • Offer a trial period at no cost for stores to try our service • Testimonials from other stores will highlight the USPs of our service Marketing • Search Engine Optimised website for strong natural search visibility • Press releases to highlight the launch of our product • Stores using our service will have a sticker on their front door • App is linked to Facebook and Google+ to automatically check-in (there is the option to turn this off) • Feature one shop a week through using a Vine video, showing the store in a 6-second video
  • 8 Financials • • • • • • Initial investment of £175,000 App development will cost £20,000, 3 team members will receive a salary of £30,000 each, totalling £120,000. £30,000 is needed for office and server rent. Business will break even at the beginning of 2016 (considering start in 2014) Direct sales and retailer associations will result in 1 new store per person per day. In 2015, 2 people x 200 days = 400 new stores. After break even we look into hiring more people Stores pay £25 per month subscription fee, we consider a trial period for stores at no cost Year Stores 2014 2015 2016 2017 2018 100 500 1,300 2,300 3,500 Revenue 0 60 250 520 850 Expenses -62 -82 -184 -330 -500 Net -62 -22 66 190 350 Note: figures are x 1,000 and include VAT