Part 4 in this series looking at fictional business models involving Digital Powerhouses encroaching on traditional, physical grocery business. These models are submitted for your consideration. They are taken from full, free case studies which are available by emailing email@example.com. If you would like help in using these case studies in your corporate strategy sessions please contact firstname.lastname@example.org
Still finding it’s way in the revenue generation world, Facebook develops an approach to the Every Household, Every Week world that sneaks up on traditional grocery, multiplies Facebook revenues and reinforces the importance of the Facebook community.
The play here capitalizes on the very real move toward Health Through Better Lifestyle. This amalgamation of individual efforts by many different shoppers is custom made for any online community with that shopper, represented through their Facebook page, as its center. The market is quite fragmented with “solutions” ranging from nutritional supplements, low meat, no dairy, high plant, locovore, vegan, anti-toxin, lo sodium to any combination of these with or without exercise, yoga, health-care professionals and more. It includes the very real and difficult to serve dietary needs of allergen and disease sufferers such as diabetics and celiacs.
What is it:
A service aggregator, built around the private needs of each consumer or family, is a viable approach to this business, and very much lends itself to the Facebook model and strengths. Facebook leverages it’s consumer centric power by focusing the commerce/content and community on meeting the unique “stated needs” of each individual who is looking to gain some control over their eating and other habits in an effort to become a bit healthier. Facebook calls this the Facebook Health Network.
- Facebook participants are given the opportunity to develop a private, Health Page. It includes goals, conditions and metrics. The user details currently used solutions (products and providers) for both consumables and for services. The application allows for multiple types of input including scanned bar-codes or photographs of products. It includes services such as yoga or weekly blood pressure check results at the local Firehouse. It encourages editing to reflect changing needs and tastes.
- Facebook then aggregates users along many different needs criteria from the very specific (“Uses pharma statins, looking for natural alternatives in Rosewood neighborhood of Austin, TX) to very general (wants to learn more about the relationship between animal consumption and disease.)
- Facebook builds a network of Health Marketplace providers of both services and products to solve for its user base. Some of these are national (GNC, Walgreens or CVS, Whole Foods, The Fresh Market) others are regional or local (local produce coop, the hatha yoga place in town). Both home delivery and store pickup products are included but in the case of store pickup only very local stores are included in the options. (more in the case study).
- Facebook also aggregates service and product offerings for the user. (more in case study).
- Facebook also arranges content for the user based on their stated needs. Included are articles that should be of interest, books, seminars and the like. Once it had aggregated enough common interests, Facebook would also organize sponsored webinars or seminars by authors and experts for the user base.
- As important as this very personalized Facebook Health page is for the user, it is private. Facebook protects the user from peripheral or meaningless content and absolutely respects any “remove me” instructions from the user.
What it would look like to the Consumer:
· All Facebook customers receive an invitation to participate in the Facebook Health Network thru the construction of their private Health Page. Benefits are fully described. One of several “health goodie packs” (more in case study).
· A second chance opt in will be shipped to customers who did not take advantage of the initial offer. As popularity builds “people in your network” solicitations will be added to the communication.
· As customers sign up content heavy updates begin to be published into their Health Network Private Pages. Three tier offers begin to appear for products and services: (more in case study)
· Customers avail themselves of other generalized services (recipes) or sign up for fee-based customized services (recipes based on what I like, don’t like.)
· Customers also join specialized groups (dealing with celiacs in public schools, heart healthy running tracks in Manhattan, reviews of vegan meals in non-vegan restaurants in Chicago) and input into any of the content, groups, offerings or ratings directly.
· All current Facebook customers are be located on a grid overlayed with product and service suppliers (local), once they have opted in on their Health Networks Page.
· All local, regional or national suppliers of products will be invited to participate in special offerings to meet the aggregated needs of the users. (more in case study)
· New product offerings (perhaps with samples) are made available for applicable Health Network Page Participants. This and other “inclusive” offerings feed the virtuous circle of membership benefits.
· Continuous communications, fed by customer reactions to prior offers and rejections, look toward enlarging the basket of products purchased through the Network. If you buy your supplements from us, why not your aspirin? As a customer I decide how many or few of these types of offers I receive. (more in case study)
· Facebook also supplies a price comparison mobile application so I can compare in-store prices with network prices for items not yet on my list. Network product providers are expected to match or beat the price checked.
What it would look like for the Players: For Facebook:
Facebook generates revenues by participating in the Every Household, Every Week business. A large and growing group of the EHEW marketplace shows more interest each week in the subjects offered by Health Through Better Lifestyle. This fragmented Lifestyle market does not lend itself readily to general merchants such as grocers. Even grocers such as Sprouts and Whole Foods cannot meet all needs (product, price or convenience for instance) especially for services. A service aggregator, built around the private needs of each consumer or family, is a viable approach to this business, and very much lends itself to the Facebook model and strengths.
The revenues stem from:
- Product and service advertising revenues
- Product sales referral commissions
- Product and service promotion dollars
- Customer participation fees for special services or events
The buildup and refinement of Big Data capabilities to serve aggregated markets, the infrastructure to enlist Network Partners, the outbound communications refinements and the tracking capabilities will all serve markets in addition the Health Through Better Lifestyle market. The Health Through Better Lifestyle s market is already huge and is becoming a much bigger rapidly. In the U.S. alone the FMCG product market is one Trillion dollars. Modest success in this market will more than double Facebook revenues is a short time.
For the Network Product and Service Providers:
The Health Through Better Lifestyle market is fragmented. It is difficult for providers and manufacturers to reach consumers via almost any media and it is difficult to make products avialable to consumers. (more in the case study)
The Health Through Better Lifestyle market gets a good deal of attention in traditional supermarket, drug and mass environments. Walmart has announced major commitments to a product assortment that will encourage more healthy lifestyles and Walgreens offers similar encouragement and adds a variety of advisement services. However, (more in case study)
Very similar list as for providers. If manufacturer has e-commerce abilities this is one way to move customers from Network-Provider, to Network-Direct. (More in case study) Could others do this?
Potentially Google, Yahoo and eBay. Certainly Walmart, Walgreens or CVS could attempt. Getting a network of other retailers and service providers would be a hurdle for the retail entities.