In Vision India 2020, there is a project called Oishi. It’s a gift e-commerce brand that has specialized capabilities for tracking occasions for gift giving, what gift was given to whom for what occasion, etc. It also has excellent merchandising such that consumers can buy unique gifts that are truly differentiated. You can read the chapter here, India’s Stylish Online Gift Retailer.
Positioned as a high-end online gift retailer, Oishi offered a unique portfolio of merchandise catering to busy, professional, but still style- and taste-conscious, women. We served as personal shoppers for this demographic, saving one of their scarcest resources: time.
For our core audience, gift-giving occasions were many. There were the usual holidays, birthdays, weddings, anniversaries, plus the day-to-day occasions, such as a dinner party at a friend’s house, to which people would normally bring wine, flowers, or chocolate. Our customers wanted to bring something different – something special. The Oishi Web site catalogued those whom customers purchased gifts for, as well as what they were gifted, making sure these special gifts were never repeated. It also featured a software personalization engine which tracked the tastes and preferences of (a) the women giving the gifts and (b) those receiving them.
Our merchandising had to align with the “special” feel we promised in the brand.
Of course, in Vision India 2020, all the projects are designed as hyper-scalable, billion dollar enterprises.
In thinking about this idea with my small-scale business ideas lens on, however, I feel that many of those concepts apply just well to a venture that doesn’t want to or need to scale quite that much.
This idea could easily be a $1 million, $5 million, or $10 million business. No need for venture financing. Build it organically. Build it profitably. Built it to enjoy!
I would love such a personal shopper for my own gift-giving needs. In fact, if you look at the numbers, they are quite compelling.
Let’s say, you pick your unit price-point as part of the positioning exercise. You could do this at a $50, $100, $150, or $200 price-point.
Assuming that each of your customers would buy 10 gifts a year, you have a range of $500 to $2000 revenue per customer per year.
With 2,000 customers, you can reach $1 million at the $50 per unit price point. The same number of customers gives you $4 million in revenue at the $200 per unit price-point. Or, you can choose to service only 500 customers a year, really get to know their needs, cater to them with maximum attention, and do $1 million at the $200 per unit price point.
This choice of what price-point you position at is going to be a very critical decision. It will determine your merchandising strategy, your customer acquisition strategy, and your margins.
Happy to help you think through all of those aspects of the business at a free 1M/1M mentoring roundtable.
Photo credit: Leah Sipe/Flickr.com.