NewBase 19 April 2024 Energy News issue - 1717 by Khaled Al Awadi.pdf
DRF pitch deck
1. Vision
Pop Shop creates a scalable cross-
marketing channel for online brands
and brick & mortar stores of all sizes.
Our vision is to leverage the consumer
driven phenomenon of “show-
rooming” to disrupt the traditional
relationship between brands and stores
BOS DRF Pitch Deck vF 1
2. The problem?
Brands Retailers
•Acquiring customers without •Retail stores need ways to
a physical presence limits draw new customers to the
brand reach store
•Online brands have •Buyers are looking for new
potential customers that products but don’t like to
want to see, touch, and feel take chances
their products •Stores experience
•Home try-on programs are customer “showrooming”,
expensive; Pop-up Shops but can’t compete with
are difficult to implement; lower prices online
Traditional wholesale
presents pricing and margin
challenges BOS DRF Pitch Deck vF 2
3. Pop Shop
We connect online brands with a plug-and-play
network of stores to showroom their products
Online brands Retailers receive new Smart matching
showroom their store traffic, eager to helps brands and stores
products in a network come check out their make sure they are
of stores, enabling fans favorite brands getting their money’s
to see, touch, and feel worth
their products
+
$$$
BOS DRF Pitch Deck vF 3
4. The Product
Brands sign up for Pop Shop and get
recommendations on best-fit stores for their
products in geographies of their choice
Pop Shop creates the merchandising and
collateral for the “pop-in” campaign. All the brand
has to do is send over a small amount of inventory
for the display.
During and after the campaign, Pop Shop tracks
traffic and sales lift in the store and online –
creating measurable value for both the brand and
the brick and mortar.
BOS DRF Pitch Deck vF 4
5. Target Customers
Brands Retailers
Value proposition Ideal customer Value proposition Ideal customer
of Pop Shop profile of Pop Shop profile
Start-up seeking Retailers unable to
Low-risk revenue
Builds visibility and increased afford high inventory
streams
awareness awareness in new costs
markets Stores with high
Drives traffic and seasonality, or
Reaches customers Selling tactile goods incremental sales limited organic
who need to where try-on is growth potential
touch/feel barrier to conversion
Easy access to up
and coming brands Limited or
Gains data and Companies with unsophisticated
exposure to bring to limited retail Gives buyers data to
network of buyers
wholesaler experience to date make informed
decisions
Large scale Etsy retailer Independent/regional retailer
BOS DRF Pitch Deck vF 5
6. Target Market
Low estimate High estimate
e-Commerce
$25.8B
market*
Addressable
market for 10% 20%
Pop Shop
Pop Shop total
10% 25%
commission
Total market size $400M $1.3B
*includes apparel, housewares, health & beauty, toys & hobbies, jewelry, flowers & gifts
**estimate based on current % of sales driven from Warby Parker showrooms
Source: Internet Retailer Top 500 BOS DRF Pitch Deck vF 6
7. Why now?
“Checking stuff out in stores, then ordering online is becoming the
new way to shop. According to a recent survey from IBM, nearly
half of all online shoppers use this technique. About 34% of them
end up buying from an online-only retailer, too, which makes
most traditional retailers pull out their hair, says Jill Puleri, vice
president of retail at IBM.”
--USA Today, March 2013
Pioneering online only players are
recognizing the importance of physical
distribution.
Brick & mortars are recognizing the
importance of cultivating multi-channel
shoppers and of using up-and-coming
brands to drive traffic.
BOS DRF Pitch Deck vF 7
Source: “Bonobos opens stores that don’t sell anything” USA Today, March 2013
8. Competitors
Storefront offers startups a
marketplace for short-term “This is a real estate
retail space by tapping into
model… I still had to do
vacant real estate.
• Launched in San Francisco all the work myself.”
in Sept. 2012 --Former storefront customer
• 1M+ sq. ft. listed interested in trying PopShop
• 200 inbound pop-up shop
requests in one month
“We just hired someone
Brands can execute their own to run our trunk shows
pop-up shops by finding and it’s still a logistics
DIY flexible leasing or subletting
nightmare. A plug and
Pop- arrangements.
play solution would
• Starting cost of $3000-5000
Up depending on city literally be a dream
• Difficult to measure impact come true.”
--Current PopShop brand
BOS DRF Pitch Deck vF 8
9. Competitive Advantage
•First mover advantage
-Building out a marketplace is one of the few times there
is truly a first mover advantage!
•Pop Shop owns relationships
-Network of stores will be proprietary, and difficult to
circumvent given that bookings will be conducted via
Pop Shop platform
-Pop Shop offers security, structure, and plug-and-play
use
•Pop Shop owns data
-Proprietary data gathering on success of Pop Shops by
brand, by store will allow Pop Shop to make smart
recommendations about where brands can get the
most bang for their buck
BOS DRF Pitch Deck vF 9
10. ` Business Model: Brands
Brands gain retail exposure, with better margins than wholesale
This is in
addition to
value of
customer
acquisition
Profit if
selling
online
Profit if
selling
wholesale
Assumptions
1.2x store Store: 15% Store: 150% of rent cost/sq ft
30% 5%
sales/sq ft PopShop: 5% Pop Shop: $10/campaign
Source: Sales based on Etsy benchamrk of avg. price per item of $15-20; rent cost based on ~$2.54/sq ft rent for 10
BOS DRF Pitch Deck vF
storefront Old City location in Philadelphia
11. Business Model: Stores
Even when space is constrained, stores almost breakeven on
PopShop, without including spillover spend + PR
Made up with ~13%
spillover spend in
store, not including
PR and awareness
benefits
Assumptions
Sales = 8x 50% of 15% of 150% of
$100/yr
rent/ sq ft sales sales cost
BOS DRF Pitch Deck vF 11
12. Business Model
Pop Shop
Philadelphia 15 cities 100 cities
Revenues
# of brands 50 5,000 15,000
# of stores 17 5,000 50,000
# of campaigns/yr 100 30,000 300,000
Commission/campaign/month $24.38 $24.38 $24.38
avg. months per campaign 2.0 2.0 2.0
# of campaigns/year 2.0 6.0 20.0
Commission revenue/yr $4,875 $1,462,524 $14,625,239
Fixed fee/campaign $10.00 $10.00 $10.00
Fixed fee revenue/year $1,000 $300,000 $3,000,000
Store annual fee $100 $100 $100
Store annual fee/yr $1,667 $500,000 $5,000,000
Store onboarding fee $250 $250 $250
Store onboarding fee/year $4,167 $1,245,833 $11,250,000
Total Revenue/yr $11,708 $3,508,357 $33,875,239
Costs
Merchandising costs/campaign $20.00 $15.00 $10.00
# of campaigns per year 100 30,000 300,000
Merchandising costs/year $2,000 $450,000 $3,000,000
Stores per Acct. Mgr Merchandiser 30 50 75
Salary per Acct Mgr Merchandiser $40,000 $30,000 $30,000
Total Merchandising costs/yr $66,667 $3,000,000 $6,000,000
Logistics per campaign $20 $10 $5
Total Logistics cost/yr $2,000 $300,000 $1,500,000
Total Costs $70,667 $3,750,000 $10,500,000
Operating Income ($58,958) ($241,643) BOS DRF Pitch Deck vF 12
$23,375,239
13. Where We’re At
Milestone # Milestone Timeframe
1 Pilot campaign in Philadelphia Apr 5th
Revise model, launch 2nd pilot as
2 May – June
needed
3 Incorporation & Fundraising May – Aug
4 Develop platform June – Aug
5 Hire sales & marketing June – Aug
6 Launch in 5 cities December
2-3 partnerships with large
7 June 2014
e-commerce brands
To date we have:
• Won pitch competition, received funding for April pilots
• Signed up 8 online only brands
• Signed up 6 stores
• In talks with 1 regional chain – 19 locations
• Brought on a seasoned entrepreneur as an advisor BOS DRF Pitch Deck vF 13
14. Team
Relevant Experience/Info: 3 years at
Endeavor; worked with 300 start-ups in 10
countries; branding & marketing intern at 3
consumer-facing tech start-ups during Wharton
Not Relevant Experience/Info: Ravens super
fan; Scuba Diver; Happy Hour enthusiast;
sometimes gets mistaken for Shannon
Alli Berliner
Relevant Experience/Info: 3 years consulting
at Bain; worked in loyalty program marketing at
Starwood Hotels; interned at Facebook ad sales
Not Relevant Experience/Info: Walks with
purpose; die-hard fan of “Ru Paul’s Drag Race”;
sometimes gets mistaken for Alli
Shannon Pierce
BOS DRF Pitch Deck vF 14
15. Why We Need DRF
Bill Gurley’s (@Benchmark) 10 Marketplace Success Factors
Enhancing rather than aggregating a market ✔
Enhancing economic advantages for both sides ✔
Opportunity for Technology to Add Value ✔
High Fragmentation ✔
Low Friction of Supplier Sign-up ?
Size of the Market Opportunity ✔
Potential to Expand the Market ✔
High Frequency of Transaction ?
Integration in Payment Flow ?
Positive Network Effects ✔
7/10 is the threshold for a compelling idea – now
we need to understand our suppliers more deeply.
BOS DRF Pitch Deck vF 15
16. Thank you!
For more information about Pop Shop
please contact:
Allison Berliner:
aberl@wharton.upenn.edu
Shannon Pierce:
pierce@wharton.upenn.edu
BOS DRF Pitch Deck vF 16