Independence Market
We've got the team and are building the model to revolutionise retail for mums, starting with food.
- Location
-
Gillingham,
United Kingdom
Categories: Home & Personal Digital B2C
-
Investment
sought: - £150,000
-
Equity
offered: - 8.68%
-
Investment
amount: - £158,598
-
Valuation
(pre-money): - £1,577,743
Idea
Introduction
Independence Market is a revolutionary new way to shop, designed for busy mums whose time and attention is precious yet have high standards for their families.
We’ve launched with an initial offering solving the problem that most mums have: ‘what’s for dinner tonight?’ Instead of expensive meal kits that need a subscription and take time to prepare, or unhealthy fast food which is an occasional ‘treat’, you can order by 1pm and have a range of freshly made, healthy and tasty meals delivered to you that evening, ready to prepare with minimal preparation.
We’ve been two years in development, using our experience in retail, shopping and consumer behaviour to develop a model that combines an ecommerce platform with a network of community based reps - what we call ‘Amazon meets Avon’.
Since launching in the Putney area of London in March, we’ve increased our customer base to over 620 subscribers. We are now looking to raise money so we can take Independence Market into all London boroughs, outside of the city, and even outside of the UK.
And meal delivery is just the start of our offering. We’re looking to use our technology and networks to deliver other high-value products that mums tell us they want to buy, and also reduce delivery costs and change the way groceries are delivered by securing local collection points so that customers can collect on their way home.
Our business is steeped in the belief that retail needs to change. It’s a segment where the consumer experience, despite all the changes in infrastructure and technology, hasn’t really changed in 70 years. It’s a time-consuming and dispiriting experience visiting a supermarket that’s designed for profitability, not convenience or quality. This c.£200 billion industry needs a revolution in thinking and we believe we are that revolution.
As a thank you for your involvement, investments over a certain size will attract perks as described below:
Intended impact
Consumers have never had more choice in terms of products and channels to purchase those products. As a result, brands today need to work harder to differentiate and deliver value.
Our team has extensive experience working in the areas of brand, food and retail strategy. Our CEO and founder, Robert Anderson-Hocking, has 25 years experience of analysing consumer behaviour, specifically why people buy and how to get them to buy more.
Two things are clear to us: in most cases the bigger the player is the less they see the real needs of consumers - and their models and cultures are too entrenched to significantly adapt. The second reality: the average consumer, in particular mums, are looking for ways to simplify. The average grocery store has over 35,000 items and we estimate that the average household buys less than 1%.
More is not always better. We believe 'better' for our consumer is to have inspiration increased, choice reduced, with the benefits of convenience and service as part of the offer - our core mission is to deliver this.
Substantial accomplishments to date
We started by asking a simple question: 'what's a day in the life of a mum like?'; our model directly addresses what we discovered. We began by conducting ethnographies across the country - following mums for a week in their life of food and shopping. We followed this up with qualitative research and finally a national quantitative study presenting our model to mums: we achieved an 84% approval rating on the concept before we'd even started.
From there we began to develop the mechanics of our retail model including the e-commerce platform. We spent time looking at the psychology of what a mum needs to feel satisfied handing over family dinners to an outside company - after all, feeding a family may be an emotionally loaded issue - and we've created a menu mechanic that, to our knowledge, is completely unique to any food business, in any category, anywhere in the UK.
We worked with a team at the University of Oxford to develop an algorithm to identify the characteristics of our consumer; we married this with cluster analysis that allows us to target communities down to clusters of 10 homes. We developed our menu, we recruited 30 trial families, launched, and in 7-months have grown to 625 subscribers entirely through word of mouth achieving outstanding feedback on our products and services. And we've just recruited our second Community Partner, the 'Avon' portion of our 'Amazon meets Avon' philosophy, and are recruiting one more to expand into other key postal zones in the London and surrounding areas.
“Independence Market has changed our lives because it's given us more options. We’ve been very much stuck in a food rut, eating the same thing week in, week out. So Independence Market for us is something really easy and user friendly. It gets delivered, you just put it in the oven and you’ve got something that’s different, interesting and really tasty to eat”
Caroline K.
And finally, we are launching our first 'click & collect' on location at the end of November, a key first step towards reducing distribution costs.
Monetisation strategy
Our business is focused on curating high value/high interest products aimed at mums for their families.
We intend to generate margin by manufacturing and retailing our products, but also through the retail of a range of 'everyday essentials', products that we purchase, mark-up and sell on.
In addition to these current products we have a product pipeline we intend to develop, including creating a 'mass retail' channel for smaller producers - we believe we have the ability to carve out 10 or 10,000 homes (once we've grown!) - enabling small producers to sell to their capacity via our channel, not only is this unique but it should represent a strong differentiator for our business.
Furthermore, because of our significant expertise in data/data gathering, we'll be looking to eventually partner with FMCB brands to provide access to our database of customers for targeted sampling, etc.
Use of proceeds
We expect that funds raised through Seedrs, combined with our live and trading business, will allow us to expand our network of Community Partners; increase the capacity of our internal production resource; and increase resources available on marketing.
The split should be as follows:
• Marketing 32%
• Community Partner Comp/Incentives 40%
• Working Capital 28%
We expect the outcome to be a significant increase in geographical spread and numbers of household sign ups and the proportion of these clicking through to ordering on an increasingly regular basis.
The company currently has a £20k unsecured overdraft facility of which £18.2k is drawn down as of 13th Nov-17 (base rate +c.8%). Funds raised will clear the amount outstanding, yet the directors’ intention is to continue keeping the facility in place until the company generates sufficient cash flows so that it can be cancelled.
Market
Target market
In simple terms we're targeting middle class mums in approximately 30 postal territories. Here's why:
• We’ve invested heavily in understanding the precise consumer segments that would be most open to our service based on their stated desires and needs, and we’ve tracked them based on their density. This density analysis should allow us to avoid the common inefficiencies of mass communication campaigns by knowing at the very least that any investment is reaching the right audience.
• We worked with a team from Oxford to develop an artificial intelligence algorithm that would allow us to pinpoint individuals through their social expression who matched the right profile; we leveraged email addresses sourced through the AI program along with data derived from our quantitative research and fed this through a cluster analysis program to arrive at our high-value consumer segments, what we call Target Clusters. This sophisticated targeting data allowed us to pinpoint 3 consumer clusters referred to in Mosaic as 'City Prosperity', ‘Domestic Success’ and ‘Aspiring Homemakers’ representing an estimated 4.5M households across the UK that are the most likely to be interested in the Independence Market offer. However our priority in the near-term is London where some 2.5M of these are situated.
With this insight in hand we believe we are in a position to know precisely where to recruit our Community Partners - mums that are the face of the brand in each community, each of whom is focused on recruiting customers and monitoring market feedback - based on high-density neighborhood. It also enables us to know exactly what our target audience spends within certain product categories, enabling us to refine our offer based on greatest opportunity.
Characteristics of target market
Our 3 consumer segments are described this way:
• City Prosperity: High status city dwellers living in central locations pursuing careers with high rewards, representing approx.
• Domestic Success: Thriving families who are busy bringing up children and following careers, representing approx.
• Aspiring Homemakers: Younger households settling down with young children, representing approx.
We have identified 13 sub-segments within the 3 higher level segments, 10 of which earn in the top 20% of household incomes, according to our research. And, to give you some perspective: Putney, where we launched the service, has approx. 114,000 homes that fit our profile.
A significant % of this group are peak earners and spenders, here's what their spending behaviour looks like: we estimate that the avg. household spends c.£1650 per month on expenditures of future interest for our business. Specifically, we estimate that their avg. weekly spend on food/non-food purchases is £420 amongst the top spenders, and food and grocery, excluding restaurants, accounts for 54 pence of every £1 spent in retail. According to Kantar the typical household makes 250 visits a year to a food store, this accounts for the massive growth in convenience retail, and this is happening in parallel to growth in the ready meals/home delivery meal categories, one of the fastest growing categories in grocery. Convenience retail and food is a basic necessity for our busy mums.
Marketing strategy
One of the key reasons we invested heavily up-front in targeting data is because the core strategy for new customer acquisition centres entirely around geo-located recruitment.
First, we believe a key daily challenge faced by our core customers is getting dinner on the table - this daily need means consideration and the desire for solutions is high, and mums are highly inclined to share ideas for these solutions (making word of mouth key for our business). We launched by recruiting 30 families who we involved in the development of our first menu - this sense of ownership on the part of our 'charter customers' led to strong referrals on to other mums.
We then supported this with strong referral rewards (coded offers for both referring mums and to referred customers). We followed this with geo-locating social media outreach by identifying social clusters (online mums' groups, school Facebook pages, etc.) and building relationships with those groups.
We've now begun the central phase of our marketing/sales effort by recruiting what we call 'Community Partners' (think of them as Avon reps) who are the face of our brand in each community. Their focus is on hosting dinners with invited prospects, identifying other 'host mums' who themselves host dinners, finding opportunities for us to be present at localised events (for example school fetes) and by offering an aggressive incentive for try a 'first meal on us.' The CPs additionally identify their localised social clusters and media who we then build outreach to.
The plan beyond this direct marketing is to support our CPs with geo-fenced Facebook advertising, this is supported by a customised targeting plan we've worked in collaboration with Experian (to our knowledge the only company that Facebook collaborates with on consumer profile overlays to enhance targeting) on.
Competition strategy
While there's been significant activity in the area of meal delivery services, we don't look at these businesses as our key competitors. Our key competitors (and potential future partners) are grocery chains - these companies still, by a very wide margin, capture the lion's share of 'wallet' from our core customers. Our job is to provide a service that simplifies a mum's life vs. following the well trodden path to a grocery store.
Overall: we're marketing ourselves exclusively to middle class mums, and we do so through a combination of an e-commerce platform and reps who live in each of our communities. We believe our service reflects certain realities that our competitors, be they grocery or otherwise, haven't captured in their offer: our meals are family friendly, first by rotating a new series of offers every week anchored by different family-orientated recipes from different regions like Spain, Mexico, Canada, etc., this to help mums keep it interesting for their family. We complement this with what we call 'Favourites', comfort food options based on dishes we've trialled that have sold well, this to create familiarity.
The majority of UK mums make 2 or more meals a night, therefore our portion sizes are for 1, 2 and 4, we consequently have families that order multiple dishes for different members of their family. We've heavied up our vegetable offers because we have observed mums have a concern with their family getting their '5 a day'. Next, all our meals can be made in c.30 minutes or less and we offer dishes that can accommodate a range of cooking methods: stovetop, oven, microwave, BBQ and slow cooker. Additionally, this being significant vs. HelloFresh!, a company that's raised significant investment, we don't require a subscription to order from us - people have the need every day, we don't ask them to adapt to our model. We also use wooden packaging designed in France that can go straight into the oven or freezer. We've specifically built a business to make choosing us easy.