3. 1) Imagine that you’re going to start a digital business.
2) Use the ADVISOR model to think about how you might
price it, and how sustainable your business would be.
5. WHAT IS THE ADVISOR
MODEL?
A - Adoption by customers
D - Disruptive innovation
V - Value proposition
I - Interface to user
S - Service platform
O - Organising model
R - Revenue or cost sharing
Pssst. Find out more here!
11. LET’S ANALYSE USING
THE ADVISOR MODEL
Adoption by customers
Network Effect
An online recipe-sharing community creates a network effect - the
more people join the community, the more others will be encourage
to share their recipes. Users can also review on each other’s recipes
and provide recommendations.
Users will be required to link the ingredients used in their recipes to
the products sold on the site. Thus creating ease for customers to
purchase the products.
13. LET’S ANALYSE USING
THE ADVISOR MODEL
Adoption by customers
Customer Dependency
By having their groceries delivered to their doorsteps,
customers can save a lot of time. The recipes shared in the
community can also help customers save time. With the click of
a mouse, customers can purchase all the ingredients required
through the ‘shop by recipe’ feature. Customers who lead a busy
lifestyle (e.g. working parents with children) will find this very
valuable.
15. LET’S ANALYSE USING
THE ADVISOR MODEL
Disruptive innovation
As the value of an online grocery business partly lies in convenience, it
would be a disruption to more conventional grocery businesses such as
supermarkets and minimarts. Physically making a trip down to the
supermarket requires traveling time and cost, shopping time, and no to
mention lugging the groceries home. Busy customers would prefer to order
online.
Another type of business that could be disrupted by this is publishers of
cookbooks. With unique and tested recipes readily available for free online,
along with comments, customers would be less inclined to purchase a
physical cookbook.
The niche food industry is a beneficiary to the disruption. As most
supermarkets and minimarts cater to the masses, it is sometimes hard to
find one that stocks special products. By offering and promoting them
(through the user-created recipes), the niche food industry may benefit as
well.
17. LET’S ANALYSE USING
THE ADVISOR MODEL
Value proposition
Even though the online grocery business is not an
entirely brand new concept, this business aims to
provide an improvement to the current online grocery
business. By offering a larger variety of products, niche
food products, as well as an interactive feature (the
recipe community), it allows customers to experience a
more unique approach to shopping for groceries. The
shop by recipe feature, which makes it easy for
customers to try new food, is also unique and one-of-a-
kind.
Customers would be willing to pay more for such novel
services.
19. LET’S ANALYSE USING
THE ADVISOR MODEL
Interface
A simple, clutter-free and clean cut interface would be used, so that
customers can find what they want easily. If customers already have in
mind what products they want, they can use the search function.
Otherwise, the website has a variety of functions that allows customers to
browse new products. E.g. Suggestions system based on previous
purchases, find out what their friends (who also use the site) are buying,
products gaining popularity in the past week, healthy alternatives, and
more. All customers need to do to use the service is to create an account,
which could also be linked to their social media accounts such as
Facebook or Twitter for ease of use.
Besides the web browser, customers can download apps for their smart
phone so that they can order on the go.
21. LET’S ANALYSE USING
THE ADVISOR MODEL
Service platform
Suppliers
A partnership can be formed with wet market suppliers for the
stocking of fresh produce. Purchasing in bulk from wet market can
help save costs.
Distribution
A partnership could also be formed with a delivery company. Instead
of paying for every delivery, an agreement or contract could be made
to make the delivery company the sole distributor.
Payment
Customers can make payment through credit card. By creating an
account with the website, customers can skip the process of keying in
their billing details every single time, easing the process.
23. LET’S ANALYSE USING
THE ADVISOR MODEL
Organising model
Gather the
Customer
ordered products Inform delivery service
places order
in the warehouse
Deliver to Delivery service picks
Customer
customer’s up order from
receives order
home or office warehouse
25. LET’S ANALYSE USING
THE ADVISOR MODEL
Revenue or cost sharing
Pricing strategies
Most products will be priced higher than ordinary
supermarkets in order to offset the cost of having to
stock more rare products.
Bundles such as party packages can be offered at a
lower price than if bought separately.
27. Revenue or cost sharing
Source of revenue
Customers can sign up for premium membership
for the recipe exchange community, which comes
with more privileges than an ordinary member.
Partnerships with certain brands can be formed -
we help them promote their products and they
give a discount.
When the business becomes more popular, a book
collating all the popular recipes can be published.
28. CONCLUSION
Price
It would be unrealistic to charge a lower price on the products as this business offers many other services that need to be taken into account.
However, customers who find this service valuable would be willing to pay that extra.
Sustainability
Competition
Strong competition exists in the form of supermarkets such as Giant and Carrefour, which provide delivery service as well. By introducing
a twist to the current grocery delivery system, customers may prefer to opt for ours. However, we should ensure that customers are not
just choosing us because of the novelty, and switch groceries after the novelty wears off. One way to gain customer loyalty is through a
rewards or rebates system, where customers are rewarded with points that they can use to redeem free gifts when they shop more.
Customer trust
As a new brand, customers may be wary of our reliability and trustworthiness and prefer more established brands like Fairprice. To
ensure that customers trust us, we should provide quality service or even money-back guarantee. Alternatively, a collaboration could be
done with an established supermarket. The supermarket could supply the products and the brand name while we provide the digital
services.
