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Ethical ShopperStanford Venture Lab 2012technology entrepreneurship
ES
Description
We connect consumers with this relevant information through an intuitive and powerful mobile app that can scan barcodes and return a headline score across a range of important factors such a sustainability, community/workers rights and animal rights etc.
We also provide useful and relevant product and services recommendations based on tracked user ID behavior (what did they scan, what did they purchase, where, when etc).
The dilemma – so many choices
Which is the best?
What about when it does have a label?
We need an App that tells you the truth – in plain language
Assumptions
Smartphone penetration will continue to increase rapidly, and so will consumers' willingness to use smartphone apps to improve their lives.
Consumers' willingness to use smartphone apps to improve their lives will also increase.
Validation
The business concept for Ethical Shopper was assessed qualitatively with potential users of the app.
Following this, a quantitative survey was published online, with 61 responses received.
Generally there appears to be a considerable level of support for the Ethical Shopper app amongst potential users.
The survey findings are detailed on Slides 10-23.
Summary of findings
Smartphone usage in New Zealand is increasing rapidly. Apple is the leading platform at present, with Android catching up fast.
Only 3 in 10 of smartphone users currently use their phone while shopping to check ethical / sustainability criteria of products.
However, a majority of survey respondents say ethical / sustainability considerations affect their purchase decisions.
Accordingly, an app which allows consumers to check ethical / sustainability criteria of products during their shopping in an easy and time-effective way will be attractive.
The app can be supported through targeted advertising using an ad mediation service.
Will people use an app to help make ethical purchases?
Our research has shown that currently, fewer people than popular hype may suggest are using mobile phones to research products prior to purchasing decisions.
This may be due to the apps that are available do not meet the needs of the consumer as our research indicates that people will use an app like our ethical shopper app, in-store to assist them to make an ethical purchase.
Total Market SizeThere are 3 major MNO (mobile network operators) that service the NZ market, penetration of mobile phones is currently at 120% (4.6 million handsets) and growing consistently.
Smartphone penetration is at 17% and estimated to grow to 60% (Gartner) by the end of 2013. This is due to the large number of New Zealanders that are currently on pre-paid accounts that buy the phone out right, and the operators now bringing in low cost Android devices.
17% equates to approximately 750,000 devices of which 73% are Apple devices and most on plan (24 months). If Smartphone penetration grows at the predicted rate, the total addressable market in 2013 with be in excess of 2.5 million handsets.Predicted Revenues for New Zealand :The total addressable Smartphone market is 750,000 users therefore total ad network revenues year 17.5 x 12,240 = $91,800
The market will grow to 2.5 million in 2013 year 225 - 7.5 (they already have it or have tried it) x 12,240 =$214,200
Target market
New Zealand is a small market and will be used a launch pad and test centre for products but the target markets will be Australia and the UK.
Australia ranks as the world's leading Smartphone market by penetration, with 37% of mobile users using a Smartphone in Sept 2011, projected to grow to 50% by end 2011 (source: Google) and perhaps 75% by end 2013.
Consumer attitudes towards conscious consumption in both Australia and New Zealand are similar with strong growth reported.
The demographic in both countries is the same:
•Middle to high income•Well educated•28 - 48 age group•Both male and female
Develop in the cloud
An essential learning that we made is that to New Zealand market is sufficiently large to cover the costs of developing the application and social web site, expansion to Australia is required within the first two years to ensure the viability of this venture.
The New Zealand market is not large enough to justify the expense of infrastructure ownership. The cloud provides a reliable and scalable environment that is accessible to all our target markets.
Develop in html5
The New Zealand Smartphone market is currently dominated by the iPhone which has 72% of market share (Gartner).
This share is rapidly being eroded by Android, this largely to do with the New Zealand mobile network operators bringing in a greater variety of Android devices at a lower price point.
Given that users have more and more choice of handsets, supporting different OSs we have made a decision to build our app in html5 to decrease HR capital to support multiple handset platforms.
Reports
Individual reports have been prepared on:
1. Potential size of the Ethical Shopper opportunity, with a focus on the New Zealand market which is proposed for the early release of the app.
2. More detailed findings of the consumer survey.
Appendix: The survey
This document captures the graphical output of the ethical shopper survey http://goo.gl/CHc2r that was created to validate the hypothesis:
There are a growing number of consumers who wish to make a conscious choice to support ethical traders.
These consumers are always ‘connected’ with their access to Smart phones, so they will use a simple app in-store to assist them to make the right choice for their budget and cause.
Do you own a Smartphone? If so, what platform does it run on?
Apple Android Windows Phone Blackberry I do not own a smartphone0
5
10
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27
18
2 2
12
If you did own a Smartphone, do you use your Smartphone to research products whilst out shopping?
No, never Every shopping
trip
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18
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Do ethical/sustainable considerations affect your purchasing decisions?
Never Always0
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How important would ethical/sustainable credentials be for you versus the price of an item?
Price Ethical/sustainable0
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1 1
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How easy do you feel it is to get clear, concise information on a product to assess its green/ethical credentials?
Impossible, unclear
Extremely easy, clear
0
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How confident are you that the information provided on packaging, labeling, etc. is accurate and true?
Not confident at all Very confident0
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If you did have a Smartphone, if you had access to an app that would allow you to quickly and easily (under 30 seconds) scan a barcode to get independent information on a products green credentials, how likely would you be to use it when making purchasing decisions
Never Always0
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If you had access to an app that would recommend a top selection of products within specific groups (e.g. the most green washing up powders, free range eggs), how likely to would you be to use it when making purchasing decisions?
Never Always0
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If you did have a Smartphone, if you had access to an app that would allow you to rate and share recommendations or reviews on green products, how likely would you be to use this feature?
Never Always0
2
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How likely would you be to use such community generated reviews to make your own purchasing decisions?
Very unlikely Very likely0
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How interested would you be to receive specific brand/product promotions and discounts for items you regularly purchased or identified as a preference?
Not interested at all Very interested0
2
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Demographics
56%
44% MaleFemale
13%
62%
20%
2%3%
Under 1818 - 2526 - 3536 - 4546 - 55Above 55
Are you the shopper for the household?
62%
33%
5%
Always or mostly do the shopping for you or your householdSometimes do the shopping for you or your householdRarely do the shopping for you or your household
