Swogo helps online stores increase their sales by up to 150% using our digital sales assistant technology.
Unlike shopping in store, there’s no-one online to help the potential customer. As 4 out of 5 people don’t have technical expertise, they struggle to make the right choice.
This has an even greater impact on online stores. On average - if 1,000 people come to the retailer’s site, 20 will buy, 260 will abandon it completely, and 720 will turn to a competitor to do more research. Our focus is this 720.
We offer e-commerce retailers a white label solution that takes their customers from the beginning of the buying process to the actual purchase. After years of research, we've created a system that defines customers’ needs by asking simple questions, allowing us to make precise product recommendations in just 60 seconds, starting with consumer electronics and home appliances.
Our solutions aim to increase conversions, increase basket value, and increase repeat purchases.
By guiding potential customers to the right product on an online store, we believe that the 720 people who would normally abandon a website to do more research will no longer need to do this. Instead, we provide them with all the information they need to make the right choice. This helps them make a decision, and as such, helps the online store increase their sales.
In order to show the value we could provide to retailers, we created an online store to put our technology to the test.
The average conversion rate for an online store is 2% - 2 people out of every 100 will buy. Using our technology on an unbranded e-commerce store, we found that 1 in 8 customers added the product to their shopping basket. Taking into account the customers who would leave their baskets without buying, this means a conversion rate of 5%.
To put this into perspective, imagine that an online store generates a monthly profit of £300,000 from laptop sales. Based on the results from our test, if the same amount of potential customers had used our technology instead, we could generate them up to £750,000. This is an uplift of 150%.
But that’s not all. As we've profiled the users, we know their wants, needs and even their budget, allowing us to cross-sell effectively. In the case of a laptop, we can sell 3G contracts for Internet on-the-go, or even the best suited laptop bag. This would allow retailers to optimise sales for products and accessories with high profit margins, making them even more money.
The customer would therefore be more happy with their purchase, and the retailer is able to increase conversions and increase basket value.
Substantial accomplishments to date
Not only have we identified a potential conversion uplift of 150%, we also have interest from online stores.
We're proud to announce that our trial for our paid launching partner, Create2Fit, began on Monday June 17th.
Create2Fit is a series of online stores which are owned by the RFS Holland Holding B.V. RFS Holland Holding takes an annual revenue of around €500 million. Create2Fit is operated by Wehkamp, who have over 120 million visitors to their online store every year.
At the end of our pilot stage, we plan to extend our reach to the UK.
We have also successfully secured over £100,000 in funding, through Seedrs, winning the NACUE startup competition, and through Startupbootcamp. We were chosen to participate in this year's Startupbootcamp Amsterdam, Europe's leading accelerator program for startups.
We plan to charge our clients:
- A set-up fee (which would cover our costs of integration, including development and design).
- A monthly success fee.
Our success fee would allow us to take a split from all revenue we generate for the retailer. By offering this, we are able to grow alongside the company, and scale with retailers of all sizes.
Use of proceeds
We are now raising pre-emption rights for the capital we plan to close as a result of Startupbootcamp.
It will be used to expand our team, hiring four developers.
With this, we would be able to scale our client-base, as well as expand our product range, allowing us to upsell additional product recommendation services to our existing clients.
Our target market are online stores selling consumer electronics and/or home appliances.
We are currently launching in the Netherlands for two reasons:
1) We are part of the Startupbootcamp Amsterdam accelerator program, giving us a large network of contacts in the Dutch retail industry.
2) The Netherlands is the perfect test market for us - the retailers are tech-savvy and it has a critical audience.
After our pilots end, we will be targeting online stores across Europe, with an early focus on the Netherlands and the UK.
In particular, we are seeking larger online stores, who have high volumes of users and often struggle to monetise on the traffic they receive. These stores are always looking for ways to increase conversions. In doing so, they could also decrease their cost per acquisition of a customer, which is extremely appealing. Larger online stores also often have more product categories available. This gives us the opportunity to upsell to each client. This means that for one client, we could provide additional recommendation services for a range of product categories, such as TVs, laptops, and washing machines, each at an additional charge. This allows us to maximise our revenue per client.
Characteristics of target market
For electronics such as laptops and TVs, profit margins are often slim. Some of the most profitable items in the market come from additional accessories, such as laptop bags and mouses. 35% of Amazon’s sales can be attributed to cross-sales such as these. As such, online stores are actively seeking ways to push these peripherals. By understanding a customer's needs and budget, we're able to effectively cross-sell these items.
Additionally, m-commerce (purchases made through mobile devices, such as smartphones) has been on the rise. It accounted for 11% of all online purchases at the end of 2012. As such, it's more important than ever for online stores to adapt to this 'mobile' lifestyle, creating a service which is quick and clean on mobile devices. By providing recommendations in 60 seconds, we are able to tap into this market.
We reach our market primarily through sales.
Due to our network at Startupbootcamp, we have been able to connect to major retailers across the Netherlands. We continue to expand our network, allowing us to reach the market with greater ease.
We have competitors working to increase conversions by providing product recommendations, such as CNET's Product Finder and PrismaStar.
CNET's finder is aimed at consumers with technical expertise (e.g. they ask, 'What laptop processor brand would you prefer? AMD or Intel'). For the 4 out of 5 customers who lack technical knowledge, this doesn't mean anything.
PrismaStar provide guided searches for products. These ask questions in order to better direct a user's search, rather than providing precise recommendations. As such, they remain a browsing tool. By pushing a user directly down a funnel, we feel we are able to better retain them on a retailer's website.
Moreover, we plan to expand our product range to include a wider range product types within the next 12 months. This will raise our barrier to entry.