punchbird

A LITTLE CONTEXT

Every person’s skin is different—not just oily, dry, or combination. The problem is that skincare brands make generic products using potentially harmful ingredients that actually damage our skin. As the demands for organic and natural products grows, demands for natural skincare products grows as well. There are many products in the market and most of them solve one or two skin need; this makes it challenging for customers to find the right products for them or follow up their routine. On the other hand making a customized skincare requires lofts of research and trials and it is time consuming. punchbird through an online quiz identifies customer skin type, lifestyle and their need and makes a customized organic oil blend for them and deliver it at their home.

BEAUTY INDUSTRY MARKET ANALYSIS

As of May 2019, the beauty industry is a ​$445 billion dollar​ market worldwide. We are seeing a clear trend towards beauty startups rising in favor of large beauty conglomerates. More specifically, the US sees​ ​24% of this market.

When conducting our market sizing, we identified Millennials living in the US consuming organic, all-natural products. Knowing that the beauty and wellness industry is large and having differentiators is crucial, we specifically narrowed in on target identifiers based on our extensive qualitative research. We will launch in San Francisco and Los Angeles and target Millennials earning income higher than the city average.

OUR APPROACH

We made it our mission to truly understand the pain points and gain creators of the current skincare products, exploration and discovery experiences of our customers. We started with secondary research, surveying over 50 people about their skincare concern and routine. we informed our product from the findings of one-on-one interviews . We were then able to develop many prototype iterations of our product and online quiz, we created a matrix of what our audience need and consider when buying skincare products, crosschecked it against competitive offerings, and made sure that it appealed to our target demographic through user testing.

FINDINGS

Our research shows customer when purchasing organic and natural skin care products often seek for truth, wellness and justice.

KEY TAKEAWAYS

TARGET CUSTOMER

Based on our quantitative research, we identified two segments: Aphrodite and Nymph. Aphrodite wants to see the results in healthy and beauty, whereas Nymph is focused on trusting natural products to be best for them. Those in the Nymph segment use natural oils for skincare purposes because they prefer to take a natural, holistic approach to their personal care. We further broke down the Nymph segment into two personas through the analysis of our qualitative research: Pampered Paloma and DIY Daisy. Ultimately, we narrowed down our target and focused on ​Pampered Paloma​, given their willingness to try out new products—specially customized and ready-to-use ones.

COMPETITIVE POSITIONING AND DIFFERENTIATION

Few industry competitors focus primarily on natural oils, while most focus on effectiveness. Through our research, we have found that most of the companies listed in the beauty and wellness industry do not provide customized skincare products. Natural and organic ingredients come with ethical sourcing, specifically from outside the US or in developing countries.

EMERGING TRENDS IN BEAUTY INDUSTRY

GO-TO-MARKET STRATEGY (4P’s)

Products

Price

Qualitative research helped us determine our target’s willingness to pay for our product. We also evaluated the pricing of our competitors who either 1) deliver customized skincare products or 2) deliver skincare products using all-natural ingredients. At the end we calculated COGS.

Promotion Strategy

Customer research helped us identify how our target customers like to learn and shop for new products. As a result, here is how we plan to promote our products to our target customer, Pampered Paloma:

Placement: Distribution Channels

At launch, we plan to focus on one distribution channel and go direct to consumer through e-commerce. Given our target market are Millennials, reaching them online is feasible. Ultimately, going direct to consumer would be beneficial for our customized product because it will help us understand their behaviors, motivations, and needs to curate our products better.

The targeting identifiers are as follows:

• Region: San Francisco, Los Angeles

• Female

• Male that engages with skincare content online ● Millennials (ages 22–37)

• Income higher than the city average ($100K for SF, $70K for LA)

There are about 1.1 million people that fall into the above demographic target. The goal of our targeting is for higher conversion rates and impressions, and to maximize the impact of our ads.

MARKETING AND SALES STRATEGY

Our sales funnel is broken down into six journey stages: ​Pre-Awareness, Awareness, Interest, Decision, Purchase​, and ​Throughout​. These stages are based on our customers’ buying cycle, and the strategies are based on the customer experience through these stages.

PUNCHBIR’S SUPPLY CHAIN

Punchbird is committed to sustainable sourcing. We will always take social and environmental factors into consideration alongside financial factors in making procurement decisions. An integrated approach for the supply chain has been followed. Given that our natural products have a shorter shelf life than traditional products, the sourcing to dispatch process needs to be agile and dynamic. All this calls for supply chain integration to maintain short lead times between order and delivery.

PLATFORM ROADMAP + MILESTONE

Year 0 will begin on June 2019 with a proof of concept and base algorithm. In Year 0, we will raise our first $20K, raise external funds, formulate our customized oil blends, and begin setting up our manufacturing facilities. Punchbird will launch September 2020, specifically targeting our marketing plan to SF and LA. Below is our platform roadmap and milestones from Year 0 to Year 3

FINANCIALS AND OUR ASK

1. ​The revenue forecast is based on the bottoms-up approach and co-relates to our marketing strategy and spend. As a direct to consumer company, our only channel to drive sales is through digital marketing.

2. ​Sales generated from the advertising campaign (primary sales channel) to targeted audiences majorly from two cities in Year One, San Francisco and Los Angeles. By Year 2, we will be campaigning to New York and Portland, followed by other cities in the US by Year 3.

3. Our sales are affected by seasonality, which we take into account to have dynamic marketing budgets and production forecasts. For instance, we have varying costs of ads depending on the month.

4. ​The retail retention rate is 36% for our product, which is considered to be within the range for standard retention rates in the e-commerce beauty industry.

5. ​Internally, there are two product categories when it comes to our oil blends based on the direct cost involved in making the product. As a conservative estimate, we will sell 75% of product type 2 (direct cost per product: $28.81) and 25% of product type 1 (direct cost: $13.81) of the total sales, which brings our average direct costs per product to $25.06.

6. We estimate the organic monthly growth rate to be 10%.