I was lucky enough to be asked to present at the Entrepreneurial Exchange conference this year. It’s a great event, with a wide range of speakers from different backgrounds. There is probably no where in Scotland that is a better support network or networking opportunity than Entrepreneurial Exchange. I encourage you to get involved…
I love e-commerce, I think it is one of the most transformational aspects of the web, allowing us to trade online but with quite low set up costs.
I have banged on enough about getting the product right – which seems to be paid lip service but most entrepreneurs. I personally think it is the difference between success and failure. No amount of marketing is going to fix a product problem, but even if your product is great you need to be able to sell it with a good gross margin.
Early in the e-commerce revolution lots of companies started selling online with low gross margins (People like Play.com would be a great example of this). They benefited from the switch in channel, but once it became the norm to buy DVD’s and CD’s online you needed to be able to compete on price and availability.
You can run a perfectly reasonable e-commerce business that only trades on buying and selling cheaper than your competitors, but eventually someone will launch against you with a better product or simply be cheaper than you.
You need to constantly work out how to optimise your product to keep you with a reasonable gross margin. My personal rule is 50% margin. If you are not making this, how can you change your product or service without losing customers to achieve it.
I use this as a basic decision process of businesses I would like to invest in that trade online!
There has been a major increase in e-commerce grocery startups over the last 3-4 months and I am delighted to see this. As a food manufacturer or retailer online offers a very compelling opportunity to create a brand that engages with one of the most important aspects of our lives – food!
The draw of multiple retailers (Tesco, Sainsbury’s etc) for a food manufacturer is linked heavily to the requirement for volume. Online retail is seen as a small niche activity – but this will change over the next 5-10 years and I am convinced that online grocery is an area that the UK has a very exciting opportunity in.
A raft of “recipe” startups have come along recently including Hello Fresh and Gousto who both offer 2-3 recipes and ingredients delivered to your door every few weeks.
A bit of background – I am now old enough to remember that a few people have tried this in the physical world including Unilever Ventures in 2003 with Rocket, which was closed down after lack of scale and complexity, so I do feel a bit of Deja Vu.
I have received a box from Gousto so thought I would review this in two parts – one the experience and then my views on the business model.
The box was delivered in a temperature controlled box (using wool) by a standard courier. External experience was great – small box, simple packaging
Internally the box was well packed, simply designed and I really liked the idea of a few meals that can be made for 2 people quickly and simply. I like the idea of cooking but I am not sure that the complexity of the recipe will make the experience a little challenging for the average consumer.
The niche that seems to be addressed is the time poor, cash rich consumer, but I don’t quite get the concepts barriers to entry or differentiation. This is not specific to Gousto I have the same issue over Hello Fresh and in fact Rocket seemed to have the same issue. I do think that there needs to be more than this to the concept, perhaps a part work?
5 stars to Gousto for the presentation, concept and packaging the next post about this will try and cover the actual experience of the meals!
#source.vintag.es #soviet union #supermarket #ussr #vintage photo
I have been debating a great deal about delivery and subscription models with a number of e-commerce startups.
There are lots of subscription based services out there and one flaw I see again and again is monthly delivery schedules. Taking my credit card and then not shipping the goods is one of the cardinal sins of retail in my book, you should always make availability, stock and fast shipping your top priorities.
It sounds like such a basic concept, but like the Soviet Union in the 1980s many e-commerce start-ups think they have such a powerful brand that they can dictate convenience for them to consumers.
I understand more than most the issue of handling a large number of SKU’s and predicting demand is complex and getting it wrong can be very costly, please put the customer at the heart of your proposition not your logistic demands!