Graze.com: A case study of an e-Business Subscription Model

Recently I stumbled upon an innovative site which I really liked.  The site is Graze.com (www.graze.com) and it is a website through which customers can take out a weekly subscription on snacks.

Graze serves the British and US market with 2 localised websites and targets people who are after healthy and convenient snacking.  Apart from snacking, Graze also serves other segments namely the breakfast and kids segments along with providing seasonal ranges, gifts both in individual portion or sharing boxes.

A screenshot  of the main page Graze.com showing a variety of snacks, the famous cardboard box and a simple diagram of how the site works
A screenshot of the main page Graze.com showing a variety of snacks, the famous cardboard box and a simple diagram of how the site works

The concept behind the website is simple and this has been explained very clearly on the website.  You choose the snacks that you like (from over a hundred), and then Graze will pick four of your chosen snacks in a box and deliver to your home or office on a regular basis (weekly, every two weeks, etc).  You can then snack (or graze….) to your heart’s content on nutritional snacks that are free of GMOs, preservatives and high fructose corn syrup.  Customers can manage their subscription so that even when they go on holiday they can postpone the regular deliveries.  Customers can also rate the snacks, thus giving Graze valid market information about trends and what its customers really want!  Graze has turned all the cycle into a learning marketing exercise and customers who want to stop their subscription are asked to fill in questionnaire.

Some Breakfast Snack Variety by Graze.com
Some Breakfast Snack Variety by Graze.com

From a customer’s point, the services provided by Graze is very convenient and from the company’s perspective, this model ensures a steady income flow of subscribed customers.   Subscription means that the company automatically has repeat customers (which many times is one of the headaches of online retailers).  The subscription mechanism allows a company to have clear projections about sales and cash flow. Subscription also eliminates a lot of guesswork (or forecasting) and one can also plan more accurately about volume of supplies to serve its base of subscribers.

The website which is very easy to browse, provides full specifics about the products and more important explicit calls for action, nudging the potential customer in the right direction to try them out.  Information about ingredients, allergies and gluten have been addressed with clearly designed labels.  The attention to detail in designing all aspects of the product and the product is really visible.  For example, when it comes to packaging, the snacks are delivered in a cleverly designed recycled cardboard box and the website even gives precise dimensions of the box so that customers can make sure that their Graze box will fit their mailbox!

The Graze Box with 4 slots for an assortment of 4 individually packaged snacks
The Graze Box with 4 slots for an assortment of 4 individually packaged snacks

Back to the web presence, one can see that so much thought has gone into the planning – visually compelling photos, clear diagrams explaining how the subscription works and clear logical text along with branding that gives the product a lot of character.   All in all, Graze are providing a truly differentiated online value proposition!

A Graze customer can get the first box for his or her friends for free and Graze also offers the first box for half price.   There is no doubt that this promotion geared on sharing helps to bring the product to so many more people.  Interestingly enough, the promotion of the first free box is not mentioned anywhere on the website and Graze relies solely on the word-of-mouth of its customers to give out the free boxes.

This sharing and giving has resulted in a very good presence in social media.  There are many videos on YouTube and many have blogged about the Graze product.  Graze has harnessed over 87,000 likes on Facebook UK page and another 80,000 likes on its Facebook US page but its social media presence does not stop there.   Graze is also very active on Twitter and Instagram.

Wish it was available locally!

From Cars to Planes

In our house, we have just about everything that is Disney Cars or Cars 2.  From the DVDs to the books, to jeans and running shoes, vests, socks, stationery, bags, lunch totes, umbrellas and swimming trunks, the stuff piles up and this list excludes the car toys themselves!  In the toy department, the collection includes so many different types of toys, the most prominent  of which  are  the several Lighting McQueen toys of various sizes and functionality. Without doubt the most loved is the die-cast model of Lighting McQueen.  Mr McQueen goes everywhere with my son and in fact we have run through several replacements (which invariably happen every time he’s lost).

Frequently when I go past my son watching Cars for the umpteenth time, I have often wondered, how soon it will be before Disney unleash planes. …..Well that time is now, or rather, Planes by Disney Pixar will be out in summer 2013.

Planes, new release by Disney Pixar scheduled for summer 2013
Planes, new release by Disney Pixar scheduled for Summer 2013

Cars have lighted up the imagination of kids in a big way and the fact that the concept is easily portrayed in a toy is really a super bonus. Kids simply whiz off straight from the movie into a real game of cars.   The story itself, with all the different car characters from Mack to McQueen, Sally, Doc, Francesco, Mater and The King along with the hundred other different cars just meant that the flow of merchandise could be substantial. In fact, aside from the success of the movies themselves,  Disney has enjoyed the success of Cars as a major boys franchise for Disney Consumer Products.  In fact Disney itself describes Cars as an “unstoppable force delivering on boys’ classic play patterns and fueling imaginations with new products and content that extend the storyline from film to books and into the home with a lifestyle merchandise” [Disney, https://www.disneyconsumerproducts.com/Home/display.jsp?contentId=dcp_home_ourfranchises_disney_cars_us; 5.6.2013].

So next in line, Disney Pixar touts Planes, a spin-off from Cars with the same kind of characters, but which too has great merchandising potential.   Planes will whizz off from the same kind of artwork and branding of Cars, so in terms of marketing, one can consider this spin-off as a brand extension of the product life cycle of Cars. With its distinctive bright red insignia, even little kids will understand that Planes and Cars go together! It can also be seen as a way to keep the interest in Cars on higher ground.   With Planes, the enthusiasm for Cars will be revved up too. The selling of merchandise will undoubtedly soar to new heights!

Personally I’m not a big Cars fan. However  when I toiled on a three-tier race-track cake with full 3-D model cars made of sugar paste (to scale) for my son’s 4th birthday, I was secretly happy that this was Disney Cars and not planes…. the flying dimension of planes and cakes cannot be as easily interpreted in 3D cake decorating!

Come next year, I’ll have to see what tricks and sugar engineering will be needed to fly off planes from cakes…..

 

Disney Cars Cake
Disney Cars Cake

Thoughts on Multi-level Marketing

Is multi-level marketing a no-man’s land?

I love marketing.  Truth be told there are aspects and concepts of marketing that are I enjoy more than others.

In particular I love the product life cycle concept and how it unfolds in the market for practically every product and service (check out several past blog posts about product life cycle).

Similarly I enjoy investigating the various levels that a product can have from the core level which is the fundamental and oldest version of the product offering to the other layers that were augmented to the product over time to differentiate and add quality and value.

However there is one particular topic which I particularly bar. It is none other than the multilevel marketing.   Wikipedia defines multilevel marketing as:

“strategy in which the sales force is compensated not only for sales they personally generate, but also for the sales of the other salespeople that they recruit. This recruited sales force is referred to as the participant’s “downline”, and can provide multiple levels of compensation.” [Wikipedia: http://en.wikipedia.org/wiki/Multi-level_marketing, 4.6.2013]

In so far there is nothing really wrong, and when stated like that it feels like referral marketing which is something that has been around since the start of civilisation. It is technically very similar to word-of-mouth, with one big difference – The person making the referral (making the suggestion or praising a product) has a vested interest because every new sale will generate him/her some money!

In fact Wikipedia goes on to add that multi-level marketing can include pyramid selling.  This is where it brings forth a barrage of issues and also lights up the alert on scams (and yes years ago I did make the mistake of not realising that an offer was actually a pyramid scheme!).  Amongst the issues associated:

–       Are sales people of multi-level marketing visible as sales force or do they pose as friends, experts , colleagues and just part of community with no vested interest when in fact they do? If this is the case, then  this is exploitation of human relationships.

–       Should referrals by people who are really salespeople be called referrals or should the suggestion be presented simply as a sales pitch?

–       These sales people themselves are lured into engaging in multi-level marketing operation with the promise of easy-money-making opportunity. There is doubt about how much money can be made and how much of it is legitimate and how much is the result of contorted operations.

–       From an economic and mathematical viewpoint, multi-level marketing and pyramid schemes do not make sense. One cannot sell a product to everyone (each market is limited) and there is the risk of ending up having more sales people on the ground than there are customers!

–      Who controls multi-level marketing stances from the pinnacle of the pyramid and how?

–       The main thrust of multi-level marketing is definitely not grounded on what the customer wants but it is built on greed!

The Internet is rife with articles for and against (mostly against) multi-level marketing.  It is very vague which is the terrain on which honest multi-level marketers tread and where the foggy marshland of rogue multi-level marketers starts.

To me it has always felt like no man’s land. If you are out to sell something that is essentially good and honest there is no need for clever deceptions or undercover operations!

Multi Level Marketing - Is it a scheme?
Multi Level Marketing – Is it a pyramid scheme in disguise?

Marketing by the Hour

As the London riots disrupt the standard pace of London life, tourism bodies and marketing organisations are keeping a watchful eye especially because  they know that such activities can effect the perception of potential visitors for the London Olympics and the Queen’s Diamond Jubilee (approximately a year away).

VisitBritain has just pulled out the video that was part of the campaign preparing the way for these important events, which in themselves are a tourist attraction. MarketingWeek.co.uk reported that “Head of marketing Joss Croft said that it was not appropriate to run the campaign ahead of the news on bbc.com showing images of rioting and looting in the UK.”

In such circumstances, is not just a matter of sticking to strategy that was planned months ago, but also a matter of keeping watch to ensure that the public out there is not getting two conflicting  message, one from the adverts and one from the news.

Read the full article from MarketingWeek.co.uk here:
http://www.marketingweek.co.uk/sectors/travel-and-leisure/visitbritain-pulls-marketing-campaign-in-wake-of-riots/3029137.article