Technology of the Week: Ordering your food online: Jumbo pick-up points and HelloFresh
In the 20th century, during the internet bubble, there was a lot of doubt about the role of the internet. People had the idea that brick and mortar locations would become less and less important. Nowadays people buy their groceries online which makes it much faster. An important question to ask ourselves should be, if this new formula for the food market could be successful?
In the Netherlands, the electronic food market is quite innovative. This blogpost focuses on the business models of two innovative firms; Jumbo e-commerce (Pick Up points) and Hello Fresh. Jumbo pick-up points are chosen instead of AH online ordering, due to the successful profit formula Jumbo uses and their market leadership with pick-up points.
Jumbo Pick-up Points
Jumbo, founded in 1921, is a supermarket chain operating in the Netherlands with over 500 stores and is currently the second largest supermarket chain in the Netherlands with a 20.6% market share as of 2014. Since 2014, Jumbo started operating online with several options within its innovative model. First of all, people can choose to pick it up at ‘Walk-in Pick Up point’ in local stores, avoiding queues. Secondly, Jumbo introduced the drive-through at several stores. Lastly, Jumbo created ‘Solo Pick Up point’ for customers who travel a lot by car. Jumbo uses their success formula for every physical and now digital store(s):
Best service + Biggest assortment x lowest prices = Jumbo.
Hello Fresh
HelloFresh was founded in 2011 in Germany by two guys looking to stir up the way people purchase and prepare their meals. Their idea involves people visiting the HelloFresh website where they can order healthy and simple meals of their choice from numerous different recipes. Currently, HelloFresh serves 4 million meals per month, spread over 7 countries. The revenue model that HelloFresh employs is a relatively simple one that is subscription based.
Comparison
The first similarity between the two business models is defined by their incentive; both make it more convenient for the customer to buy their groceries. Secondly the market opportunities, HelloFresh and Jumbo operate both in the electronic food market, which is expected to grow to a 5% share of the total food market by 2015 and 20% by 2020. Jumbo is currently the market leader in pick-up points which gives them an advantage. On the other hand, HelloFresh boosted themselves with aggressive marketing tactics, which gave them a positive brand name.
Conclusion
Both Jumbo and HelloFresh operate in the e-grocery market, but via different business models. Although Jumbo was not the first to enter this market, they have established themselves well by being market leader in pick-up points. HelloFresh, is also an innovative concept, but easy to copy. They will have fierce competition, and will need to overcome this by having a sound strategy. It will be interesting to see how these companies will operate in the future and what innovations they will make.
References
Impact online food retail. food-circle.nl. Retrieved 15 September 2015, from
http://uk.businessinsider.com/e-commerce-disrupting-huge-grocery-market-2014-12?r=US&IR=
Smal, E. (2015). Jumbo gaat boodschappen nu ook thuisbezorgen. nrc.nl. Retrieved 13 September 2015, from http://www.nrc.nl/nieuws/2015/08/25/jumbo-gaat-boodschappen-nu-ook-thuisbezorgen/
Insights (2015). Visie op Supermarkten – Insights. Retrieved 13 September 2015 from
https://insights.abnamro.nl/visie-op-sector/2014/visie-op-supermarkten/
Emerce.nl (2015). Emerce.nl – Jumbo Supermarkten opent Webwinkel Jumbo.com. Retrieved 14 September 2015, from http://www.emerce.nl/nieuws/jumbo-supermarkten-opent-webwinkel-jumbocom
HelloFreshGroup,com (2015). Welcome To HelloFresh. Retrieved 13 September 2015, from
http://www.hellofreshgroup.com/
Gorczynski, T., Kooijman, D. (2015), The real estate effects of e-commerce for supermarkets in the Netherlands, The International Review of Retail, vol 25: 379-406.
Team 20
Daan van Amelsvoort – 370068
Daan van der Vleuten – 437197
Stefan Bouts – 440300
Rick Vrouwenvelder – 419282
Bram van der Doelen – 374642
Phone Companion
Microsoft seems to not only be following in the footsteps of Apple’s success, but is trying to take it to the next level. Apple has been a very popular and successful brand, which apart from quality, has resulted from their innovative way of linking different Apple devices with one another through iCloud. iCloud allows users to send and receive messages, and use apps and tasks across all their Apple devices at the same time. Microsoft, however, is adding onto their competitor’s strategy and provides the ability to link Windows 10 PCs with devices of other brands and operating systems as well, significantly enlarging their target market.
The Phone Companion app links your Windows 10 PC with your other mobile devices, regardless of whether they have a Windows operating system or not. [1] They allow accessibility to iOS and android users as well, and offer compatible apps for each system, linking users’ devices in the same way iCloud does, without forcing users to buy all their smart products of a single brand.
After Microsoft failed to grab a share in the operation systems market, by lagging behind in the app revolution [2], they are now working hard to gain a good position and obtain a share of the market. In order to take some steps in the right direction, Microsoft has made some acquisitions in recent years, including Sunrise and Acompli; two apps that are compatible with both iOS and Android operating systems. [3]. The release of Phone Companion will take this development to a new level and offers positive prospects for Microsoft in this volatile market.
I find it particularly smart that they reach out to all smart phone users, and that the app isn’t limited to just those few who use a Windows phone. Forcing your users to limit themselves to a single brand, like Apple does, can possibly hurt their sales, as users have to make significant investments in several new devices of the same brand, in order for them to reap the benefits of the linking systems of said brand. In that sense I highly prefer Microsoft’s tactic in this matter, as I can keep using my existing mobile devices, and the initial investment to start enjoying the possibilities Phone Companion offers is limited to only a single purchase.
Of course the question remains whether it is not too late for Microsoft to try and conquer a market already so well established. And then there is also the matter of their competitors, who will most definitely not sit by idly and watch as Microsoft eats away from their market share. However, an intelligent move like that of Microsoft will certainly bring about one beneficial change; the mobile market will become more and more user friendly as the different companies, like Apple and Microsoft, battle each other for the satisfaction of their users.
Sources:
[1] Sawers, P. (May 26, 2015), ‘Microsoft Announces Phone Companion App for Windows 10 And Teases Cortana for Android and iOs’, retrieved from http://venturebeat.com
[2] Bajarin, B. (May 17, 2013), ‘Microsoft is Missing Apps the Same Way They Missed the Early Internet’, retrieved from https://techpinions.com
[3] Finneran, M. (June 2, 2015), ‘Microsoft Gets a Whole Lot More Mobile Friendly’, retrieved from http://www.nojitter.com/
Ethics and Information Strategy
Business nowadays are, with an accelerating pace, gathering online data of individuals, thereby creating powerful databases containing sensitive information. From a business perspective, this behavior enables firms to offer more tailored products and services to their (potential) customers. This phase of the Information Revolution, as Richards and Kings write, will result in a larger scale in social change at an even higher speed. Almost all human activities are becoming increasingly influenced by big data predictions and, while of great value to firms, this collection of individual data also raises concerns.
We need balance the use of big data with human values like privacy, identity, free choice and transparency. In order to address this issue, Richard and King (2014) established four principles, or so-called big data ethical norms. First, the word “privacy” should be replaced by “ information rules”. In contrast to what many believe, privacy is not dying, but we should change our expectations and the boundaries of privacy. Privacy is not about how much is a secret but about what rules exist to use information. Second, online trust should be restored. People don’t use technology, they don’t trust. When we share private information, we share in confidence. This, however, does not mean that this information is not ruled by privacy law. Users should trust on law and regulation for their information to remain confidential. Third, together with confidentiality, transparency should be in place in order for individuals to regain trust. However, there is a fine line between openness and secrecy with respect to transparency, also called the Transparency Paradox. In short, this paradox describes how too little information leads to a lack of trust and how too much transparency could harm privacy. Thus, there should be a balance in in privacy for individuals and privacy for institutions. The fourth and last principle is about how big data can compromise identity. Our identities are being increasingly influenced by big data and the companies that control them. This phenomenon will only geow as big data will continue to be adopted by institutions. Because the development of big data is not natural, we should gain a deeper understanding and set clear boundaries to deal with its implications.
While big data offers great opportunities to firms and institutions, we should not ignore its challenges with respect to human values. Old regulations may not apply which urges debate on new laws and boundaries on information collection and handling.
358455ms
Chris Stam
Sources
Neil M. Richards, J. H. K., 2014. Big Data Ethics, Washington: s.n.
How computers can make you look good – Ipsy
Last Monday (14th of September) the beauty products start-up Ipsy of YouTube celebrity Michelle Phan raised about 100 million dollars.
Even though being an online celebrity with almost 8 million subscribers (Youtube, 2015) gives you a great edge in starting up a beauty company, it was not because of Michelle that they raised this dazzling amount of money. For a long time already, beauty and fashion startups are trying to create software that learns and anticipates on what people want to wear. Ipsy believes the future is super-intelligent software that knows your tastes so well it will send you products that you’re guaranteed to like. (CNET, 2015)
Customers are paying a monthly $10 subscription fee to receive a so-called ‘glam bag’ full of beauty products. The fun thing about Ipsy is that the content of the bag is customized for the individuals. Customers have to fill out a quiz with 12 personal questions (think of skin color, eye color, etc), after which software will analyze their answers and determine which beauty products they probably like. Customers can review their products online, which is taken into account for their next order. (Ipsy, 2015)
You may recognize this kind of business model, because Netflix did exactly the same in the movie industry, by offering recommendations based on what users liked to watch. I think we all know what kind of movement they have started. (CNET, 2015)
Ipsy is not the only company trying to use software to recommend products in the beauty industry. Competitor Birchbox is also shipping boxes of beauty products for a $10 monthly fee. The only thing that sets them apart except the boxes they arrive in. is the market they are aiming for. Birchbox is more aimed towards body/skincare and Ipsy is distributing make-up. (Brooke, 2015) With worldwide revenue for beauty care products expected to grow towards $461 billion in 2018, the market may be large enough for both.
Even though raising $100 million dollar and having three profitable years shows us that the algorithm they are using is getting pretty good, it is not fool proof yet. Problems range from products for the wrong skin color to inaccurate product descriptions. (Penninipede, 2013) Ipsy’s CEO says that there are still a lot of problems to work out: “That’s where the algorithm is not foolproof”. (CNET, 2015)
Author: Sven Sabel (354240ss)
References:
https://www.youtube.com/user/MichellePhan/about
http://help.ipsy.com/customer/en/portal/articles/1465221-what-s-a-glam-bag-
http://www.sammithebeautybuff.com/2013/09/why-i-cancelled-my-ipsy-subscription.html
Treatwell: A Company Worth €34 Million in Barely 2 Years.
Ever heard of Treatwell? I will be honest I did not. Nevertheless it is a fast growing and interesting company to look at. The company has had a 425% year-on-year growth since they launched in 2013. Recently, the company has been acquired by Wahanda’s, after a $46 million cash injection and a $171 million majority acquisition.
But how was Treatwell able to grow so big so quickly? In my opinion there are two major reasons for Treatwell’s success. At first, Treatwell’s first mover advantage allowed the company to dominate the online marketplace. Treatwell is the first online wellness and beauty marketplace in the Netherlands. Customers can make an appointment at a hairdresser, a massage salon or a waxbars on the site. After visiting a salon, the customer can leave a review at the site. Secondly, Treatwell started with a very talented and diverse team. The team includes an ex CFO of booking.com, a former senior executive of Procter & Gamble and a co-founder of Just-Eat Benelux.
Actually the business model is not new, the food industry is already using it for years. Iens, for instance, allows you to search for restaurants in different cities and offers a great variety of cuisines. Each restaurant is reviewed by customers, which makes it easier for potential customers to choose. This is exactly what Treatwell is doing, only in a different industry. With this sort business model’s it is extremely important to be the largest. Once you are, you are not getting out of that position, according to Laurens Groenendijk. Speurders failed to dispel Marktplaats and Just Eat to dethrone Thuisbezorgd.
This is the same reason why Wahanda’s acquisition is no surprise. Businesses like Wahanda’s (a Japanese competitor) are built to around economies of scale. “By bringing Wahanda and Treatwell together, we have formed the undisputed leader in the European market.” said Laurens Groenendijk, co-founder and CEO of Treatwell. “Our geographical coverage and our cutting-edge technology complement each other perfectly, as do our cultures and ambitions. We are thrilled to be part of this exciting venture.”
This is just one example of how our consumer economy is being disrupted by technology. I welcome this kind of disruptions, for me it makes it easier to choose. Besides, I think it will ensure a higher quality on the long term.
References:
European Salon Booking Site Wahanda Buys Dutch Rival Treatwell For $38M
http://siliconcanals.nl/startups/het-geheim-van-startup-treatwell-in-krap-twee-jaar-naar-34-miljoen/
The ultimate form of Customer Relationship Management, The Salesforce IoT Cloud
Last Tuesday Salesforce announced the launch of its IoT (Internet of Things) cloud. Salesforce is a company that offers customer relationship management (CRM) solutions to other firms, to get an insight in their leads, contacts and activities to ultimately raise their revenues. (Salesforce.com, 2015)
With the new IoT cloud Salesforce offers, companies can make use of the Internet of Things and the data produced by clients, partners and all electronic devices and sensors. The IoT cloud will allow them to process an enormous amount of data and make use of that to proactively respond on customers demand. (Salesforce.com, 2015)
The cloud connects all devices, sensors, websites and other forms of interactions with Salesforce to create an overview of the clients of a firm, and give them a good indication of the customers needs. With simple and intuitive tools, business users can process the data offered to filter the important events and proactively respond to them. Ultimately Salesforce IoT will allow its users to improve the customers experience. (Salesforce.com, 2015)
The IoT cloud makes use of Salesfoce’s Thunder, which is world’s most scalable event process engine, designed to connect billions of events and process them real-time. Thunder allows companies to gets insights in aspects of their business, that were invisible before. All of this will create opportunities to further improve the customer experience. (Salesforce.com, 2015)
With the new cloud, Salesforce is turning the internet of things into the internet of customers, CEO Marc Benioff said during a conference in San Francisco. Big Data is providing a big opportunity for companies these days, the Salesforce IoT cloud will help these companies to explore these opportunities and respond to them. (Ecommercetimes.com, 2015)
I believe the Salesforce IoT cloud is a great example of how a company can make use of big data to improve their business. However, a lot of companies are still sceptical about the use of “big data” and “cloud computing”, not seeing it as an addition or even pillar of their strategy. Which is a waste, because it allows you to get to know your own customers so much more in-depth, that makes be believe it creates chances for all companies in all sorts of industries.
Author: Jessica Dooper (358278jd)
Sources:
https://www.salesforce.com/nl/form/sem/landing/sales-cloud.jsp?d=70130000000tYju&DCMP=KNC-Google&keyword=salesforce&adused=75782668110&mkwid=su9wtPKOa&pcrid=75782668110&pkw=salesforce&pmt=e&pdv=c [Accessed 19 Sep. 2015].
http://www.salesforce.com/nl/iot-cloud/ [Accessed 19 Sep. 2015].
http://www.ecommercetimes.com/story/Salesforce-IoT-Cloud-Makes-Thunderous-Debut-82492.html [Accessed 19 Sep. 2015].
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