Owned it
Revenue generating social automation platform used by over 1,000 SME retailers.
- Location
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Birmingham,
United Kingdom
Categories: SaaS/PaaS Digital B2B
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Investment
sought: - £70,000
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Equity
offered: - 3.55%
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Investment
amount: - £85,960
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Valuation
(pre-money): - £1,901,831
Idea
Introduction
Owned it offers online retailers a platform to run sophisticated on-store social marketing campaigns. Launching social campaigns on the store can be rewarding but the success is often expensive, time consuming and requires co-ordinated efforts of creative, technical and marketing divisions.
This has inspired us to develop an ROI driven social marketing automation platform that not only enables retailers to create customer engagement campaigns but also track and optimise those. The challenge was to create a solution, that is affordable, simple to use and provides online stores the technology to monetise opportunities in social marketing.
Unlike passive social monitoring tools, Owned it apps actively help retailers achieve their key social marketing objectives such as:
- Drive sales
- Spark product/ brand conversations
- Increase Fan/ Follower base
- Cost effective customer acquisition.
Our product is being used by over 1,000 SME retailers from over 40 countries. Below is an example.
Intended impact
Social media is increasingly becoming important to brands as a traffic source. For online stores we estimate an average 10% of the total traffic may come from various social channels. However, due to the complexity involved in creating and optimising on-store social campaigns, many retailers fail to deploy such social campaigns and often struggle to increase traffic from social media.
In the UK, thousands of online stores do not have access to effective social marketing solutions. We discovered that brands like Argos could potentially generate over £100 million per annum by launching targeted social campaigns that are integrated into their store (findings from the white paper published in April 2013 - Leaving Money on the Table). Our experience suggests that this level of additional sales is feasible as one of our clients, based in the fashion sector, experienced an increase of over a million dollars in revenue over one month and a manifold increase in store traffic.
Owned it aims to supply brands with a platform to launch social marketing campaigns on their stores in a few clicks. Thus, retailers can not only boost their social traffic and revenue but also meet wider social marketing objectives such as creating a community around their brand, increasing brand/product awareness and acquiring new customers.
Substantial accomplishments to date
- Two rounds of investment completed.
- We have developed one-click install plugins that can be integrated with many major eCommerce platforms (Magento, Prestashop, Opencart, Shopify, WooCommerce, osCommerce).
- As industry thought leaders, we have delivered talks at industry trade shows, including Internet Retailing and published the well-received white paper, ‘Leaving Money on the Table’.
- We work with over 1,000 SME retailers from more than 40 countries.
- An increase of over a million dollars in additional revenue for one of our clients.
- We have attracted the backing of former Chairman of IMRG (UK Online Retail Association) and a seasoned Retail Expert.
- We have been widely covered in eCommerce and start-up publications.
Monetisation strategy
Initially, all new customers receive a 14-day free trial of the platform. Our monetisation strategy is dependent on the size of each retailer. Retailers pay a fixed monthly subscription fee. They can also choose to partake in a hybrid pricing policy, which is a small fixed monthly subscription fee with a performance based- commission.
We work with affiliates such as Linkshare, Affiliate Window and Zanox in order to facilitate this performance based pricing.
Use of proceeds
We intend to use the proceeds of this fundraising round for general working capital purposes as we continue to grow the business towards profitability.
Historically, our expenses have been broken down roughly as follows:
- 30% business development
- 40% platform development
- 15% marketing
- 7.5% legal & professional
- 7.5% others.
This new funding would enable us to solve existing consumer pain points more effectively, as well as speed up the adoption of new clients.
Market
Target market
Our primary target market is medium-to-large UK-based eCommerce retailers, specifically those seeking to monetise the opportunities from social marketing efforts.
In November 2013, the UK eCommerce industry was made up of 200,000+ retailers. Within this expansive and large market, an Internet Advertising Bureau report declared that, collectively, these retailers spend more than £900 million per annum on their social media efforts. But often majority of this expense goes towards hiring agencies to create social marketing campaigns.
Although many brands have become alert to the usefulness of social media in building on existing revenue, it appears to us that most do not have the capacity (either the technology or time) to successfully utilise this burgeoning channel or the expertise to consistently convert these social media leads into buyers.
These problems are universal and this is clear in the scope of our existing client database, which encompasses those who are part of the consumer electronics, gifts, gadget, toy, accessories and fashion sectors- many of whom are based in non-UK geographical locations.
Characteristics of target market
In the eCommerce market, a greater importance is being placed on ‘what’s being said’ on social media. People express their opinions by commenting on, ‘liking’ or sharing an idea or product. 74% of consumers rely on social networks to make purchase decisions and 40% of people purchase an item after ‘favouriting’ it. However, statistically, only 37% of marketers are satisfied with their social marketing efforts.
Retailers spent 80% of their marketing budgets on traditional avenues such as content marketing, SEO and PPC. These standard marketing avenues and traditional social media is saturating fast, the next wave of innovation for marketers is in the field of automated social marketing.
The European market lacks tools that can automate social marketing for online retailers of all sizes. Last year, according to a white paper distributed by IMRG, there was an increase of 18% in sales, worth approximately £8 billion that was attributed entirely to social marketing. Further, the report mentioned that retailers who did not switch to social marketing saw a relative dramatic decrease in sales of around 20%. IDC predicts that the total global market for automating marketing including social automation will grow from $3.2 billion in 2010 to $4.8 billion in 2015.
Marketing strategy
As our target markets can be divided into three unique sections, our marketing strategies vary depending on the size of the brand we are looking to attract: Tier 1 customers (those with up to 50,000 transactions a month) Tier 2 customers (those with more than 50,000 transactions a month) Tier 3 customers (large retailer brands with multiple stores).
When communicating with Tier 1 and Tier 2 customers, we tend to conduct business with either their in-house marketing teams or external agencies. We also indulge in content marketing (blogging) and social media to voice our opinion on the industry's latest trends and engage in a healthy two-way dialogue with fans and followers from these two tiers.
We communicate with Tier 3 customers by direct marketing, attending trade shows to promote our brand in person, offering potential clients the chance to connect with us on a more personal level. We often engage in offline marketing approaches, such as meeting clients at industry speaker events or attracting them through direct B2B sales. Additionally, we have also used eCommerce publications and the national press to draw attention to the Owned it brand.
Our white papers have won acclaim and we have delivered keynote speeches at several conferences. As thought leaders, we seek to actively contribute to the development of our market and clients’ understanding of it. We see ourselves as educators as well as entrepreneurs.
Competition strategy
Businesses have approached the area of social commerce from different angles, in an attempt to capitalise on the customer insights and increased exposure that the solutions can bring.
Many of these solutions are focused on a single aspect of social campaigns such as products sharing, social referrals etc. Some of the generic solutions available to shop owners, are based upon the Facebook “Like” or “Share” system and the Twitter “Tweet”. These are aggregated offerings and only capture a very basic picture of visitor behaviour. Furthermore, the return on investment of these traditional social media techniques is difficult to assess with accuracy.
A few companies have attempted to capitalise on the opportunities that exist in the social marketing automation market.
Two companies, both based in the US, have attempted to tackle this problem. Launched in 2010, Shopsocially is a social platform that allows retailers to run social marketing campaigns. Shopsocially works with a number of the popular US retailers. Later, in the same year a company called Curebit, introduced a system that simplifies the creation of cashback offers through social referrals. Shop owners that subscribe to the system are able to give split referrals, which are offers redeemed by the sharer and their friends.