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!

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?

Socialnomics – it’s WorLd of Mouth!

I’m currently reading (even though I must admit at a very slow pace because I’m short of time), Erik Qualman’s epic book Socialnomics. It’s by far my favourite 2013 book.

The title page states that it’s about ‘how social media transforms the way we live and do business’ and the book is exactly that and more. Even for a heavy social media user like me, the book presents so many insights, ideas and case studies. So much thought has been given to customer behaviour and this can be translated into ideas about what companies should be doing in today’s age to generate more interest in their brands.

The book is easy reading and one does not need to be technically-versed to enjoy it. Whether you are a  marketing  student or a marketing director, this is one book that you cannot do without.  On reading the book, you will immediately realise that Qualman is to today’s media what Drucker was to management in the past.

Socialnomics (2nd Edition) 2013, by Erik Qualman is published by Wiley.

Socianomics by  Erik Qualman
Socianomics by Erik Qualman

Can Traditional Stores Beat Online Stores?

Many Maltese marketers often ponder on this question: – Can a Maltese retailer beat the online stores?

Well, most often the answer is straight no. Foreign online stores have several major advantages. With no physical limitation of space (an online store is not limited by the physical space of the retail outlet), the variety is often endless and thus the visitor is mostly likely to find whatever he or she is after and more. A visit to the online shop can occur at any hour of the day and day of the week and thus there is no hassle of matching one’s shopping time with traditional shop opening hours. Online competition, along with the possibility of fewer intermediaries along the distribution chain also means that the prices are several notches cheaper than in traditional stores.

Those who have visited this blog before know that I frequently exalt online shopping, as the most convenient way of modern shopping. Somehow, this year, I am quite behind Easter celebration preparations and I knew that the only way to get the presents sorted was to visit a real toy store as opposed to search and wait for the delivery of the toys, which needs to be here, needless to say before Easter Sunday.

I have not been in a local toy store for some time. In the past, I have put off by the lack of choice along with the poor salespersons’ attitude of “what you see is what we have”, seasoned with “we just want to sell the wonderful branded products we have so do not ask about anything else ”. When I tried to put this behind me, I still found, glaring prices that would not at all tally or fairly compare to the price + delivery cost of the same toy from say a toy store from mainland Europe.

Well ….yesterday I visited Toby’s Toymaster in Birkirkara and lo and behold – I was pleasantly surprised and delighted!

To start with they had what I was after! As I went through the shop, it became clear that they stock a wide variety of girls and boys toys aimed at different ages, and there is no special emphasis on just a couple of brands. Big brands stand alongside much less renowned names. Indeed it is a good assortment, so much so, that they even stock characters from ‘In the Night Garden’, a BBC series which was not aired in Malta (to my knowledge) but which has big following abroad. Apart from the variety, they also seem to have got the prices right and finally I must not fail to mention the good service and the salesgirl’s skill and attitude, who spoke to me genuinely about the products. All in all a very good and endearing traditional shopping experience!

So back to my original question – Can Traditional Stores Beat Online Stores?

Well….Yes, I’ll be back to Toby’s ToyMaster for sure!

Toby's ToyMaster
Toby's ToyMaster

More reach for retailers in Malta.

From a marketer’s point of view having shops with longer opening hours does mean that there is more ‘reach’ for the customer.

Today the Times of Malta carries a story about how the GRTU has reached an agreement with the Government whereby retailers have more discretion when to open on Public Holidays. This is like enhancing the shop to tap into what could be another segment. 

More opening hours does mean staffing the shops more and other added costs but if does translates in more sales than costs all will be worth it!

Read the full article at:  http://www.timesofmalta.com/articles/view/20120326/local/shops-given-free-hand-to-open-on-public-holidays.412861

Of Place and Channel

The advent of online stores which exist only in the virtual world, with no bricks and mortar outlet to back them up have had to contend with having their goods delivered to their customers via post or courier.    This system is fine when people /clients are at home to accept the delivery but it is not the best of systems when people are out at work and return home to find notes about missed deliveries. Apart from the frustration, this also involves the hassle of rearranging for another delivery.

From a strategic and operational point of view having only this ‘option’ is a certain disadvantage.  Online stores, which have real outlets,  provide the option through which clients can choose a specific outlet from where they could pick up the goods bought online and this has been found to be very useful.

So it was only a matter of time before the likes of Asos.com resorted to using the service ‘Collect Plus’, a service through which the online client can choose a local corner store from where to pick up the goods bought online.   Collect Plus is an online business which is available in the UK and it incorporates a big network of local corner shops which will be serving as a depot for parcels.

Read the article about Asos new service here: http://www.marketingweek.co.uk/4000551.article?cmpid=MWE08&cmptype=newsletter&ern=A78C55F808729EFF9157FA8774B0A748&email=true

Or go directly to CollectPlus to check out their innovative service:http://www.collectplus.co.uk/

 

 

 

The Convenience Experience

There is no doubt we live in an age where the most scarce resource is time. Our lives are so rushed and breathless  that sometimes it’s literally good to bask in the aura of convenience.

Recently I found myself working on a school project which required the creation of puppets. I would have loved to give in to my creative side  and  indulge in designing and sewing them up but the hassle of going around shops in search for the right material, right colour and trimmings to match, before starting the actual work on the project up put me off.  The  idea of traffic jams, parking problems and such was too daunting especially when I wasn’t even sure that I was going to find the stuff that I wanted to buy.

So I opted for the easier way out…..

I ‘googled’ puppets, found an online store in the UK that provides delivery service to Malta and made an order. That was Monday afternoon. On Thursday morning,  the puppets were delivered. That whole process took less than 3 days. I was obviously thrilled as I could have have never pulled the whole thing off (search for material, buying and sewing the puppets) in 3 days.  Thanks to Internet,  Google and  the online seller, www.puppetsbypost.com (they have a wide choice of products, good prices and excellent service) I’m ready to move to the next part of the project….

Yes convenience is one of the greatest advantages of online shopping.  Coupled with a wider variety (that the online retail experience offers),  online shopping can be the saving grace to customers who do not have time to spare.  Sometimes the online customer can even find a good deal or get the same product for a cheaper price.

So what creates this ‘convenience experience’ ?

In today’s world, few retailers can afford to ignore the online channel and the very basics for this channel to work are:

1. Online shop displaying merchandise/products in detail;

2. Easy-to-use shopping cart with facilities so that clients can quickly change quantities in cart;

3. Reliable delivery services to the target market/s of choice;

4. Online payment facilities (possibly including both payment by credit cards and Paypal);

5. Reliable office system that recieves orders and processes them;

6. Clients aware of the shop  (achieved via good online ranking in search engines like Google, online adverts, social media presence).

If all the above have been given due diligence and thought and the retailer has the right marketing mix for the product then the online shop should bring in clients.  Suffice to say that ignoring any of the above 6 points  is done at the retailer’s own expense as online negative comments and ratings have a habit of spreading like wildfire!

Puppets from www.thepuppetcompany.com
Convenience for the customer means business for the retailer: Puppets from The Puppet Company, bought through www.pupppetsbypost.com delivered to my doorstep in less than 3 days