Entrepreneurship Venture: Trove
- After rolling out our survey and receiving quite a few responses, we shifted gears to acquiring retail partners. The key assumption for our retailers was: Retailers do not have targeted, robust rewards programs and they can greatly benefit from more detailed consumer data. In testing this hypothesis, we thought that we would be able to get 2 out of every 5 retailers (40%) to participate in our test program. We arrived at the 40% from current user adoption of retail apps — according to Cisco Consulting Services’ 2015 retail survey, approximately 55% of shoppers will use a store’s own app while purchasing, and 34% will use a third party app1. Although these numbers are for shoppers rather than retailers, retailers should be willing to adopt one in the same proportion to consumer demand. Since Trove is a third party app with high customization, we took the approximate average of both statistics to get to 40%.
- To test this hypothesis, we went to restaurants in the area, and spoke with managers to ask if they would be interested in participating in the test program. We are also working with Penn Student Agencies to see if we can leverage their connections in the area to get automatic sign ups for our test program.
- Of the 11 businesses we spoke to, we gained 1 restaurant as a partner (9.1% conversion). This restaurant is only at Penn’s campus. 5 of the 11 businesses (45.5%) were corporate chains, so they asked us to follow up via email with their corporate office. However, the responses from in-store managers were strongly positive: 9 out of 11 businesses said our product would be useful, explaining that customers didn’t want to constantly carry around their rewards cards. The last business we spoke with did not have a manager in and we will be following up with them later this week.
- The verbal responses we received from the managers indicated retailer interest in Trove because they sense a consumer demand for it. However with chains, the standard response we have received is to follow up by email, which lengthens the conversion process. Consequently, our results suggest that one location businesses will be more receptive to Trove because they don’t require corporate approval. Moving forward we will be targeting smaller businesses, which we think will improve our conversion rate.
Our next step is to create a landing page which enables us to analyze our beta sign up conversion rate. Next is deciding the MVP approach. A minimal operations MVP would be helpful in assessing the customer behavior as many consumers would want a fully functional app. From a cost perspective, using a minimal features approach would help to get the mobile app designed, developed, and released quickly. However, with limited features we run the risk of lessening the impact of our product. Rolled into this decision is whether Trove should be a B2B or B2C oriented venture. Our key partners are the retailers because of the analytics we provide, and our shift in hypothesis testing this week could lend itself better to exclusive retail engagement. We hope to tackle these decisions this week.