A Product Strategy for Snap Kitchen: Pt. 1 Landscape Research

INTRODUCTION

Mark Stephan
May 18, 2016 · 9 min read

Product Management isn’t simply about UX design and Software development. Product Management is very much about finding market opportunities through competitive and market research as well as user analysis. The product manager needs to be strategic and visionary in all three segments; business, user experience and product development. The following article focuses on that first aspect of product management, business strategy and vision.

A few months ago I had the pleasure of presenting a proposal for a go-to product strategy for the company Snap Kitchen. Snap Kitchen loved this presentation and the vision, but decided to go in another direction. Because enough time has lapsed, and the work is my own, I am publicly sharing this information believing the research should be useful for showcasing how a product manager, with little time (24 hrs to be exact) can create a vision and strategy for a business. It should be noted here that all research and information I used to create this presentation is my own. Snap Kitchen gave zero help and no information or framework. So there is no proprietary information here. It was the nature of this presentation to create some assumptions that may or may not be correct.

Snap Kitchen is a healthy pre-prepared food company with stores throughout many major metropolitan cities in the US. The following three articles are a summary of that presentation, along with the research and discoveries I found.

The articles are broken down by:

Article 1) Landscape Research

Article 2) Guerrilla User Research & Results

Article 3) Opportunities and Execution Strategy

ABOUT SNAP KITCHEN

The on-demand food delivery market space is hopping. In cities like San Francisco the market is full and competition is stiff. Snap Kitchen would need to distinguish itself from all of their competitors if was going to survive not only today, but in the future as those companies and Snap Kitchen territories expand they will run into each other, and the company with the best model, and the best food will win.

COMPETITIVE LANDSCAPE

  • Competitive Verticales
  • Healthiness vs Delivery Time
  • Tech Usage vs Delivery Time

A good competitive analysis will also include a detailed business-model comparison, market-share comparison, how much funding do they have backing them, growth rates, and who is using what methodologies and an analysis of those trends. As someone once told me, show the numbers! Yes, there are numbers. All of this is research that is easily accessible, and I included it in my presentation, but for brevity sakes, and to leave some mystery to the reader’s research, I left these things out of this article to focus on the main question, how can Snap Kitchen grow and not only compete with the other food companies, but have a competitive advantage.

As you can see in the above chart, Snap Kitchen falls into the category of Single-source (all the food comes from one source), Prep-prepared (food is ready-made), repeatable (food is intended to be heated, i.e. not delivered hot), On-Demand (Food is available when you want it, not necessarily delivered) food providers. As you can see the only direct competitor is My Fit Foods, while Munchery slightly differs by delivering the food, but no brick and mortar.

From the graph above you can also see the different markets and visually see how crowded those markets have become. Indeed, even since the creation of the above chart in November 2015, today (May 2016) many have stopped operating or pivoted their business model. By the positioning of Snap Kitchen, you can see that it provides a unique competitive advantage as they are focusing on brick and mortar stores. We’ll speak more to this in the opportunities discussion in article III.

In the above chart we compared the different food providers by their focus on healthy foods versus how fast the consumer can get access to that food. As you can see, there are a couple of clusters of business models. The two main ones being quick delivery service focused on all times of food (health not a concern) and high-health value food companies that mainly run on a subscription-only model. Again, Snap Kitchen and MyFit Foods tend to be between both models, having a brick and mortar model that focuses mainly on healthy food. They only other outlier is Sprig, who delivers quickly, while also having healthy food as a value. However, it should be noted that Spring can only be ordered online. There is no brick and mortar location. The same goes with all of the other competitors. They are either all online delivery, or online subscription. The only food providers that offer pick-up and on location shopping are MyFit Foods and Snap Kitchen.

I also believe another great comparison is to evaluate the technology that each company used in their business compared to their delivery time. Here we also found a large contrast. The only companies that had virtually no technology used were both the brick and mortar stores, MyFit Foods and Snap Kitchen. Both subscription services, and on-demand delivery services both had high-tech as a foundation to their experience, either mobile or web or both. While at the time Snap Kitchen was experimenting on an order to pick-up system, it was only experimental and available to certain users. It was an interesting contrast between the two models. It was clear that businesses either totally relied on technology for distribution or totally relied on brick and mortar.

ANALOGOUS LANDSCAPE

They are:

  • Brick and Mortar (Has a physical store-front)
  • Rewards Program (Has a customer loyalty program)
  • Online Business (Snap Kitchen wants to meet this criteria)
  • Consumer-focused (Has a passion for making their customers happy)
  • High-touch products (The products are best experienced by physically touching and evaluating them)

From these criteria, I selected the following business as those that I most wanted to study as analogous businesses.

  • Starbucks — Coffee
  • Sephora — Make-up
  • Ultra Beauty — Make-up
  • REI — Outdoors gear

All of these companies are very fascinating in themselves. I believe, that all of them have been very successful, even the two of them that are in the same market-space. It was very interesting to study how they all, each in their own unique ways, but also very much alike, created programs and technology to create a homogenous feel for the brand.

There are three main focuses I felt these analogous businesses identified more than their competitors, in order to become models that are worthy of note. These focuses are continually being innovated with in their business creating an engine that propels the success of that business.

They are:

  • Omnichannel focus — Combining smooth and consistent user experience between: Online, In-store, mobile, rewards, POS, with a deeply personal and customized experience. They simply get the desires of the users in every location and device.
  • Strong human-centered focus — The experience isn’t about the website and mobile, but rather they exist and are structured to meet the needs of real people. i.e. Starbucks pre-ordering.
  • Rewards focus — Creates a gamification effect. i.e. when I want coffee, I go to Starbucks, b/c I am a few stars away from free coffee.

The above three focuses really revolve around the main one, a strong human-centered focus. Each of the above companies realized that in order to grow their brand and influence, they needed to not look at customers as people they need to get money from, but rather, they looked at customers like users, humans who have emotions and values as well as motivations that need to be impressed and wooed, not taken for advantage.

The whole omnichannel focus revolves around the customer, personalizing itself according to where the customer is (at the shop or not). When in a shop, it offers price-checking, or paying with mobile, and in the case of Starbucks, it even lets you sit and enjoy Spotify music for free.

The rewards focus is also human-focused, by subconsciously making the user feel like they’re getting a deal in the experience. That, the next reward is just an arms length away. This is especially true of the Starbucks app, however, it should be noted, Starbucks just changed their mobile app and adjusted the Rewards system ($1=1 Star). It will be interesting to watch how that plays out. The numbers are much larger, and it’s more difficult to get rewards. Indeed, the star number now only reminds me how much I over spend at Starbucks. My intuition says it’s going to cause users to be less motivated in racking up those stars. I wouldn’t be surprised if Starbucks eventually back-tracks this product decision.

SUMMARY

Armed with this information, there is another set of data that is absolutely vital to attain in order to make visionary recommendations. This is user research. The next article will delve into the user research I carried out, including insights I gained from that user research. The third and final article will provide the results of all of the market and user research, with opportunities and recommendations on executing a path to success for Snap Kitchen.

This article was also posted on LinkedIn Pulse.

Part II of this article, Guerrilla User Research & Results, is coming soon!


About the Author

Starting off as an Archeologist, Mark graduated university with 5 majors and 3 minors, and worked on his masters in History and Archeology. However, taking an abrupt turn, in 1999 he entered into the tech world by working at Trilogy Software in Austin, Texas. After the Dot Com collapse in 2001, Mark moved to Istanbul, Turkey where he taught entrepreneurism to persecuted communities and refugees. He also attended Istanbul University, learned Turkish, and on graduation started his own software company in Istanbul and ran it there for 5 years. In 2008, Mark moved back to Austin, Tx moved his company and ran a consulting company helping start-ups start up. In 2012, Mark closed his consulting company and focused full-time on his new product start-up, Community Raiser, launching a crowdfunding platform for non-profits. In 2015, Mark took a short break from his start-up to work at a human-centered digital product design agency as product manager helping clients build the products of their dreams.

Today, Mark is still very involved in giving back to the community by serving refugees and persecuted communities around the world. He is also working on a new product at his start-up Community Raiser, and is about ready to launch a mobile app to build generosity of thought. Afterwards, Mark is looking forward to working for a yet to be determined product company building the next great thing.

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Technophile, Langophile, and Christophile. Making things, and breaking things. I love making products others love.