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Start-up radar: Jet.com

Jet.com - Google Chrome 2015-07-30 08.41.15

Introduction

A leading contender for this year’s hottest ecommerce startup is Jet.com, fueled by a $225 million funding round and great PR calling it the next Amazon. Jet.com brings the Costco warehouse pricing model to the web by charging an annual 50$ member fee in exchange for below-competition prices on everyday goods.

Noteworthy ideas

Jet.com managed to bring gamification into the shopping experience by offering dynamic pricing. Adding certain products to the cart unlocks rebates on other projects and buying more of the same item increases savings further.

Another clever option to save is by waving free returns, an option more retailers should include.

The launch of the company was also accompanied by a very successful referral program. Jet.com gave 100.000 shares to the person who referred the highest number of sign-ups. Certainly a very goal orientated marketing campaign resulting in over 350.000 new members.

Critical assessment

However the business model which relies heavily on upfront losses to gain market share and a pricing model that’s mainly focused on membership fees rather than margin is criticized wildly.

The necessity to keep up with Amazon’s humongous variety of products on sale meant that Jet.com started to sell items from other retails with a representative quietly buying it from other outlets such as Walmart.com. However by sticking to their below-competition prices, Jet.com ended up paying on top.

Verdict

The innovations in play certainly inspire to be re-conceptualized, the pricing policy might however need some tweaking to be sustainable in the long-run.

 

Read more:

Ted Iobst: My First Purchase on Jet.com (via Medium)

Amazon Bought This Man’s Company. Now He’s Coming for Them (via Bloomberg)

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Business model expansion for TV networks

Video Content Reseller

Major TV networks are creating multi-channel networks to secure the service of skilled YouTubers. While this helps to shape the brand digitally and reach new target groups, it also neglects a different demand side.

Digital advertising is increasingly focusing on video formats, especially glossy lifestyle videos made for mobile. The social media platforms are easy to manage but creating original content certainly goes beyond sending a trainee into the wild with an iPhone.

Contently is leading the way with written content by bringing firms, agencies and freelancers together through an elaborated marketplace.

TV networks could easily adapt this new business model by marketing their video expertise to agencies and corporations, offering original premium content. This approach can even prepare them for the fight against Netflix.

Enhance browser games with custom TV shows

Another opportunity, TV networks are already investing in, are browser games along with their ubiquitous television commercials. But instead of keeping these two channels separate why not combine them.

Comunio is based on real-life football statistics, with gamers collecting points for the performance their selected players deliver on the field.  With the weekly occurring phenomenon of gamers rearranging their fantasy football teams, a show reporting on match statistics and the transfer market would certainly find its viewers. And as the rights for German football transmissions carry a hefty price tag, why not create your own ecosystem. Live matches from a minor UEFA league such as Iceland, a biweekly statistics and transfer-show, reporting on the games’ top scorers and a state-of-the art mobile app could certainly bring new opportunities.

Second Screen Shopping

A straight forward option is to empower the second screen and make more content on screen available for online purchase. No matter if it’s clothes or holidays on sale, there are no limits when the sales pitch is cleverly included in the story onscreen.

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European version of the Daily Show with Jon Stewart

Younger audiences in search for information on current affairs are increasingly turning away from traditional media outlets and towards political satire such as The Daily Show, Colbert Report or Last Week Tonight with John Oliver. Understandably, these shows are paving the way for German productions such as Neomagazin Royale or Heute Show, especially as their political impact is growing.

But as these shows are coming from the comedy side of entertainment and being powered by traditional TV stations such as ZDF, maybe the time is ripe for an approach from a different, more grassroots angle.

With populist approaches fueled by old-school politicians on the one hand and apolitical youths on the other, it’s becoming imperative for the few politically motivated, Europe-focused millennials take matters into their own hands.

Exciting examples of direct, self-initiated video formats like Jung & Naiv or Meinungsfern show the way, albeit viewership is still fairly low.

Inspired by the digital possibilities of today,  the goal should be to start small, get together a few like-minded and skilled people and build on the legacy of Jon Stewart and John Oliver. With FM4 as a starting-point for research and some smart data visualizations to connect the dots, a semi-professional yet funny 3 minute YouTube show could be up and running in no time.
And the show shouldn’t stop with funny pointers, but really aim to inspire political activism and pave the way for solutions, however small they may appear. There is certainly no shortage of urgent topics.

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Incremental innovations for the online-grocery market

Innovation for Online Grocery Startups

The online supermarket startup scene is just taking off in Europe with big retailers currently going for the click & collect business models but an overall boom in the online-grocery space on the horizon. Looking at the current German market situation, the differences in the underlying business models are marginal and a few incremental innovations could help them appeal to the most promising target audiences.

While the startup capital is certainly Berlin, Munich brings the best prerequisites for running a successful online-grocery delivery service as legal regulations limit opening hours for supermarkets to 8pm. No wonder this layout is already attracting the first heavily backed start-ups.

With stocking and inventory management being a huge cost driver and some online supermarkets offering 20000 products, customer focused offerings could be more cost-effective. After all most overall purchases are for dinner and light breakfasts rather than multi-meal dinner parties. Proposing fast-casual convenience products and healthy breakfast cereals rather than fresh exotic fruits could help the financial bottom line.

And by partnering with local partners such as Munchee, a high-quality precooked meal provider, cooking would not even be necessary anymore. And for those clients who don’t know what to make why not partner with Schlemmertüte, a startup which provides recipes and all ingredients in one bag for the whole week. An additional profit driver could also be combo-deals such as a Netflix voucher, popcorn and ice-cream packed together.

Focus on the target group that is not going to make the supermarket closing hours like young professionals working late. Instead of touring all the single households, offer special conditions for workplace delivery, right for the end of overtime hours.

A key problematic is matching the shopper with their items as delivery times are often uncertain. So instead of agreeing on a rough time window, how about using a route calculator algorithm computing the estimated time of arrival and if the customer isn’t home yet, he can just snooze the handover (for a small service fee) and the truck is automatically rerouted.

And sometimes none of the inventory seems exciting enough for a purchase. But instead of an aborted transaction the app could offer a different kind of checkout and direct via an affiliate link to an online pizza delivery app.

 

 

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Content Platform

With websites springing up left and right and major news outlets going digital, content is becoming the number one distinctive factor. But still traditional newspapers are focusing on run-of the mill online news-portals and have difficulties to make ends meet. On the other side major corporations are building up an insaturable hunger for original content, narrating unprecedented stories to hit the vibe of the target audience just like Intel’s Creators Project. Sure, major news power-players such as Buzzfeed or HuffPost can draw from talented staff and monetize through native advertising, but eventually content needs to be viewed outside the news and magazine bracket and rather as a commodity.

The matchmaker between the need for more original content and brands aiming to stand out is Contently, creating a vast network of talented writers from prestigious outlets such as Vice, New Yorker and National Geographic and putting them in contact with procurers such as Google and Coca Cola. But Contently goes beyond providing a platform and includes an ideation section, freelancer billing process and direct publishing possibilities and is thus reinventing the editorial process.

Contently_ Tell Great Stories - Google Chrome 2014-12-15 08.24.49And Contently is not just providing the platform, but also showcasing its skills with a dedicated freelancer hub and a portfolio online magazine.

While Contently is taking the English-speaking world by storm, why not adapt the idea for the German market and throw in some additional tools. Branch.com is adding extra value to the ideation process by bringing the public discussion together with personal conversations, creating a credible ideation foundation. They even have a mobile outlet with Potluck.

The market in Germany might not be so tech-savvy yet but as an industry-led society, it offers some interesting niche markets in desperate need for original storytellers. So the platform could incorporate a substantial idea process that helps to breed interesting long reads and connects companies to independent authors like Indie Mags scattered all over Germany. And eventually this project might even give birth to a new printed magazine just like AirBnB managed with Pineapple.