1
Background
2 Smart Locker Business
4 Customer Value Segmentation
5 Target Market
3 Bumbox Strategy
6 Value Proposition Canvas
Please read the case and work with your small group members to answer these: 1.
Evaluate the attractiveness of the smart locker business in Singapore. Use relevant tools for this.
If online shoppers made the final decision on the delivery method, how could Bumbox increase online shoppers' adoption of its services? (For additional insights, refer to the reports from KPMG and UPS in the Relevant Readings section)
Analyze the customer value created by Bumbox. Is the value high for each of the three potential customer segments? Please suggest how Bumbox could persuade each segment of its value.
According to the case, which target market would you recommend Wong focus on? Why?
Create a value proposition canvas for Bumbox and how it fits with the target market.
Bumbox is faced with the issue of gaining traction while competing agains SingPost in the competitive market of logistics and delivery services. The that Bumbox must take into account when deciding on its business model and navigating the logistics sector are examined in this case study.
The increasing post and parcel industry is propelling parcel delivery companies to adopt advanced smart technologies to enhance customer satisfaction. There is a rising demand for smart cooling lockers across the food & beverages industry vertical to preserve and provide fresh food products. The rising penetration of the internet and smartphones has enabled consumers to import products, resulting in considerable growth in parcel shipments. The rising demand for modern solutions to manage package, mail, and asset delivery from residential and corporate sectors is contributing to the market growth. The growing demand from retail, colleges and universities, and other sectors to transform package and mail delivery is driving the smart parcel delivery locker market.
Easy integration to checkout pages of e-tailers
Bumbox service is immediately accessible to online shoppers E-tailers can deposit parcels for shoppers’ collection Bumbox is flexible and fast to form joint ventures or strategic collaborations with landlords and partners Competence in software and hardware that allows for various applications to use our smart locker systems affordably
Would encounter financial challenges in the face of rivals like Singpost. Having insufficient human resources available can cause work delays.
Can receive assistance from the government to develop the smart locker sector.
Generating new concepts for the smart locker industry. Bumbox can address all the weaknesses of its competition.
Receive opposition from a number of larger competitors in terms of brand value
Having to contend with new competitors who recognize the flaws of the bumbox
Bumbox has a number of advantages, including easy connection with e-tailers' checkout pages, instant accessibility for online buyers, the capability for e-tailers to drop off packages for pickup, flexibility in building partnerships, and proficiency in reasonably priced smart locker systems. In contrast to competitors like Singpost, it can have financial difficulties and run into delays as a result of a lack of personnel. The business has chances to get government assistance for the growth of the smart locker sector, innovate within the sector, and counter competitors advantages. It also faces risks from more established rivals who have a better brand value and from fresh competitors who are aware of its flaws.
Bumbox is threatened by new competitors who are aware of its flaws and might move forward with a more effective strategy. They have the advantage of negotiating advantageous supplier prices, allowing them to offer products at reasonable prices. They use cutting-edge technology to improve the payment experience for customers. The main rival to Bumbox is Singpost, which has a more powerful brand and greater market acceptance. In a highly competitive market, Bumbox must continually develop and offer cost-effective and valuable goods to maintain its customers' loyalty. In addition, Bumbox competes with alternatives from new competitors who fix its problems.
Had to contend with fresh rivals who understood the drawbacks of bumboxes. In order for rivals who appear in the future to adopt all of bumbox's drawbacks
Bumbox's greatest competitor is Singpost because of Singpost's superior brand value and higher level of popularity.
Bumbox uses the most up-to-date technology resources for buying and selling. Using this approach, consumers' ability to make payments may be facilitated.
One of Bumbox's advantages is its ability to negotiate better prices with suppliers, allowing it to sell its products at a lower price than other rivals.
Battling against fresh rivals who included all of Bumboxs flaws. Customers will favor brands that offer goods and services that are more affordable or worthwhile than those offered by Bumbox.
Bumbox fulfills customers’ need on providing smart lockers that are accessable to receive parcel deliveries, which is similar to its competitors ; SingPost and TA-Q-BIN.
Competitor’s Product Feature
Customer’s Desires Your Product’s Feature
Bumbox provide multi-options service that could ease the usage of its consumer, both seller and shoppers, which they can choose the services based on their convenience.
As a start-up business, Bumbox shares the same association that arises from the association of another brand, TA-Q-BIN, on providing services with lower price. Point of Parity (POPs)
Bumbox‘s point of parity that makes it similar to competitors are smart locker providing, options services and lower price services.
Functional&Benefit PODs Performances PODs Imaginery PODs
Immediately accessible to all online shoppers & sellers
Open platform -> integrated with e-commerce checkout page
Offers multi-options services
Rapid & flexible pick up deliveries
Flexible technology apps (API)
Enhanced security (biometric locks, access code, etc)
Eco-friendly (lower carbon emission)
Quality & Privacy-driven person
Bumbox have several PODs that makes it outstanding from its competitors ; multi-options services, flexible pick up deliveries, an gave environmental friendly as imaginery advantages.
Smart lockers
Mobile phone apps
Designated parcel lockers
Lower prices
Lower margin
Area in Singapore :
12 in universities
1 in polytechnic inst.
2 in public places
Facebook posts
Email blasts
Zalora trial-review
4P analysis or known as marketing mix is shown to evaluate Bumbox’s service and offers, in order to make further strategic decisions.
Bumbox’s main services are offering lower price smart lockers which could be designated, along with the mobile phone apps to track and order the service. They have 15 Bumbox lockers, spreaded in universities, institution and public places. They also use Facebook posts and email to build awareness of their product to online customers.
Bumbox’s majority locker box are not spreaded equally (13 out of 15 are in universities) -> more variative locations needed.
Promotion technique used by Bumbox are quite outdated -> create more relevance promotions using up-to-date tools.
POPStation
All
135+
Backed by an extensive
Diverse locations,
Backed by an
Selected “Cheers”
LowFlexibilityPlatform
Compared to its competitor, bumbox has a higher flexibility for collaboration and openess in platform for its partner & customers.
Compared to its competitor bumbox has a lower network system than singpost, but that issue will be tackle time by time as the business grow and increase the number of stations.
HighNetwork System LowNetwork SystemIf online shoppers made the final decision on the delivery method, how could Bumbox increase online shoppers' adoption of its services? (For additional insights, refer to the reports from KPMG and UPS in the Relevant Readings section)
The question Number 2 is to analysis for online shoppers, delivery industry and smart locker industry. The source of researchs are from KPMG, UPS, Journal of consumer research by KYLE B. MURRAY, and articles.
After the analysis we compare how BomBox business model were executed.
And the last one, we make the proposed strategy for the brand
Research from UPS show that shoppers in Asia : They like fast deliveries, use phones and tablets a lot for shopping and tracking orders (asian prioritize mobile tracking than other countries (australia, mexico, US), and Asian love using social media
Based on UPS, these aspects are important to win shoppers by retailers :
Low satisfication (need to invest)
Number of payment options
Variety of brands & products
High satisfication (maintain)
Choose Delivery Date
Green Shopping options
This shows that the opportunity for Bumbox to grow for e-commerce industry is high because shoppers & retailers in singapore are mostlikely use smartphone to buy and deliver products
Cognitive lock-in refers to a scenario where consumers are "locked in" to a particular choice or product due to their expertise and familiarity with it The factors are habitual routine, comfort, confirmation bias the study found that “ease of use” This related to Bumbox services to provide logistic in specific location (near customer needs in school, aprtment, offices) They provide QR code for simplify to get the parcels
Facilitating omnichannel Provide info shipping cost up-front
Provide Tracking Expected Time
Hassle-free return Free shipping/lower cost
Customer needs omnichannels (buy online and return in offline store)
Shoppers also report abandoning a cart because they are not ready to purchase, but want to get an idea of total shipping costs
Retailers that offer a hassle-free returns process can increase consumer satisfaction and drive repeat business.
Free shipping for returns is the most often cited element included as part of a shopper’s best returns experience
Bumbox need to provide these needs to e-tailers and shoppers. Bumbox have facilitated tracking system, hasslefree return. But need to improve expected delivery time, lower delivery cost, availability of the locations.
Research from KPMG shows that price is the most important factors for customer in online shopping. Advances in technology, logistics, payments and trust, coupled with increasing internet and mobile access and consumer demand for convenience.
Best delivery options is the top 3 customer decide to make online purchase
As Zalora managing director, Localized delivery options crucial in Southeast Asia. They invested heavily in logistics for delibery fleet. They also like the idea of picking up or returning items at nearby stores.
Easy to reach places for picking up and returning packaged
The market is exhibiting a CONTINUOUS growth rate. Global market size of intelligent parcel lockers was USD 684 million. It is projected to reach USD 2,148.6 million by the end of 2027, with a compound annual growth rate (CAGR) of 17.8% during the period from 2021 to 2027. Company coverage : china, US, France, apac, australia source : market research world (link)
684 M
2.148M
2021 2027
Customer must motivated by triggers and easy to use Bumbox
Smart Parcel Locker offer secure and convinient delivery
Bumbox location in prominent area is the solution for online shoppers and retailers. Bumbox lockers act as a convenient platform to spread the word about the service, explaining its functionality, pricing, userfriendliness, and advantages. Insights from studies by KPMG and UPS offer recommendations on what these prompts should convey.
smart parcel locker is an autonomous container technology used for storing online delivered parcels
The increasing e-commerce and online shopping platforms are expected to drive the market. Commercial buildings and multi-tenant apartments are highly adopting this technology to manage high stacks of parcels of multiple recipients.
Source : KPMG, The path to purchase journeyTo know how the business can attract the market
Attention :The “delivery box station” innovative product, the design and business model attract customer’s curiosity.
This can be achieved through targeted marketing campaigns, ads, and collaborate with e-tailers.
Highlighting the convenience, security, and time-saving aspects of using parcel delivery boxes could capture attention by Eye-catching visuals and engaging content
Interest : they should emphasize the benefits of using services
24/7 accessibility, secure, and the ability to pick up packages at a primary location Testimonials from satisfied users or demo product of simplicity and easines can generate interest and credibility.
Desire : convince potential customers that parcel delivery boxes is a must-have solution
Highlight : reduced hassle of missed deliveries, and the environmentally friendly (low carbon emmisions).
Offering limited-time promotions, discounts, or special offers can stimulate desire
Action : 60% of consumers prefer user-friendly apps for locker access.
The ease of UI/UX in apps and on computer. Providing clear and easy steps to sign up, offering incentives for the first-time use of the service.
CTA like "Delivery Now," "Try it today," or "Get started" should be visible in marketing communications
Customer needs integrated channel online and offline
Mobile tracking with real-time data is the key for online shoppers
Asia is the 3rd highest in shoppers having returned an online purchase, and customer wants a hassle-free return delivery options
Expected delivery time and lower cost are aspects when choose delivery service
Technology, growth of e-commerce, smartphone are the opportunity of tech company like Bumbox. The growth of Smart locker industry is increasing and expected (CAGR) 2021-2027 17.8%
Define business model for e-tailers
Acquirng as many as retailers
Offers Flexibility to choose delivery time and date
Easy to reach by customer
Easy of return by platform (no fee and simplify the process)
Keep up the supplies meet the demand Marketing Offers
to give special value for customer
Add new Bumbox in prominent area
Time delivered as soon as possible
Real time delivery tracking streamline delivery process and route
Discount price for new users
Loyalty program for customer
Social media promotion will get discount
Bundle prices exclusive with e-commerce
Partnership
Early business need to partnerning with mature brand
Partnership exclusive with 1 big e-commerce, then focus on it
Partnerships with logistics company just for program yearly
Substitute with innovative offer to partner
Best deals program for partners
Young adult, millennials, student
Pain Point:
The individual may be concerned about their privacy & waiting time for the packages.
Wants:
Someone who needs privacy and security for online purchase
Behaviour: Millennials who easily adapt to new technologies
Global LSPs that stationed in Singapore.
Pain Points: Deliveries failed the first time because recipient were not at home.
Wants: access greater and a more efficient delivery process through the smart lockers.
Behaviour: motivated by cost reduction
Retailers on online platforms
Pain Points:
End Consumer expectation, high shipping cost, limited network, delivery time
Wants:
Credibility, expanding network, Cut-off
Times on shipping
Behaviour:
Consumers increasingly demanding faster and more convenient delivery options.
01
Through smart locker and strategic logistics solutions, Bumbox helps to reduce time and cost.
02
Customers can rely on Bumbox's smart locker services to handle their personal and order-related information with privacy and security.
03
Bumbox's smart lockers are more easily integrated into an e-commerce company's logistics network
04
Lockers allowed customers to collect their parcels at their convenience. At the same time, with fewer drop-off locations, LSPs could cut down on travelling distances and time, making deliveries faster and hence increasing throughput.
05
Customers could choose to have their parcels delivered to a smart locker at a convenient location, from which they could collect them.
06
The Package Protection System from Bumbox is a strong security feature made to protect packages kept in its smart lockers.
Cost Efficiency
Privacy
Integrated Delivery System
Productivity
Flexibility
System
Bumbox has values that responds differently to each customer segments: 1. 2. 3.
Cost Efficiency : Bumbox offers cost efficiency by saving time and cost or customers, e-tailers and logistic companies.
Privacy : Customers no longer worry about their purchases being seen by their family or roommate
Integrated Delivery System : Bumbox's integrated delivery system streamlines operations for logistic companies and enhances the shopping experience for online shoppers and e-tailers.
Productivity : Productivity immediately supports the throughput performance of logistics firms and the trust of online retailers due to no missed deliveries and quick turnaround times.
Flexibility : Flexibility to choosing location, from which they could collect the package.
Protection System : Bumbox's Package Protection System is an effective safety system designed to protect items stored in its smart lockers.
Smart Lockers, which have more secure for the package
Establishing more lockers in Singapore
Provide free trials for new users which could increase the familiarity of the services
Reducing inventory space
Help to save costs on rental fees and human resources
Offers 24 hours free storage for packages
Alternative shipping option which can enhance their customers experience
Offers three Bumbox's Services that can customize to customer needs in terms of shipping time and cost
Provide real time delivery tracking
E-Tailers are the main target segment for solution that offered by Bumbox.
“Bumbox offering the solutions for E-Tailers for time and cost efficient of delivery. In addition, also provide time convenience for E-tailers consumers for their deliver package”
IF SATISFIED
To bring the value to E-Tailers, we must also provide value to the end customers of E-Tailers as the person who determines the satisfaction of Bumbox services and overall E-Tailers service.
Based on our market analysis, we recommend Bumbox to choose the E-Tailers market segment. Below are the considerations:
1. 2.
3. 4.
Global E-tailers revenue growth potential reaches a CAGR of 13% from 2014-2018. This means that E-Tailers transactions will potentially increase from year to year in line with the potential increase in the bumbox logistics market.
E-tailers become the low cost platform to increase the brand awareness & product knowledge (optimize on E-tailer consumers base).
Increase the opportunity of B2C Business after the increase of product knowledge & satisfaction from E-Tailer consumers.
Based on survey, 70% of Singaporeans liking or loving to shopping, it means that the potential of daily, weekly, and monthly consumption is high.
To define potential customer and revenue opportunities for Bumbox
TAM -> Total singaporean population
5.47 Mio Singapore Population in 2014
70% from populations love online shopping.
person in SG spent an average $4,906 in month for buy goods & services (source)
70% x 5.47Million population x $4,906 x 12 month = $ 225 Billion usd
SAM-> Total E-commerce market in Singapore
TAM x 55% = 3 Million user E-commerce in SG
*3 million user are from Singapore E-Tailers Consumers (source)
AOV singaporean $110 usd x 3 M (potential cust) = $330.000.000 usd ~ $ 3.9 billion usd in 1 year
*AOV data from Is ASEAN at an Inflection Point for eCommerce? UBS Global research
SOM-> E-commerce Logistic Market in SG
SAM x 17% = 3million x 17% = 510.000 customer in all SG e-commerce that buy clothing, accessories, electronics, sporting and hobby average parcel delivery cost was SG $8 and assuming 60,000 parcels were delivered, SOM = SG $8 (spent per 1 parcel) x 60,000 parcels/days = SG$170 million in 1 year 2014 and SG$423 million in 2019
5.47 Mio population worth to $ 225 billion usd in year
3,0 Mio customer worth to $3.9 billion in a year
510.000 customer worth to SG $170 million in year
DELIVERY SERVICE FOR SMART LOCKERS
INCREASED CONVENIENCE AND FLEXIBILITY
KNOWING THAT PACKAGES ARE SAFE AND SECURE GIVES YOU PEACE OF MIND
DELIVERY WAIT TIMES HAVE BEEN REDUCED
DELIVERY ALTERNATIVES THAT ARE CONVENIENT AND FLEXIBLE
TIME SAVINGS
MISSED DELIVERIES WERE ELIMINATED
24/7 ACCESSIBLE SMART LOCKERS
DELIVERY FAILURES
REDUCE WAIT TIME FOR DELIVERIES
SMART LOCKERS THAT ARE SECURE AND MONITORED
RECEIVE PACKAGES FROM ONLINE MERCHANT
AVOID SIGNIFICANT WAIT PERIODS
PICK UP PACKAGES AT A TIME AND LOCATION THAT IS CONVENIENT
STAYING AT HOME TO RECEIVE SHIPMENTS
REDUCED SECURITY CONCERNS
INCREASED CONVENIENCE
INCONVENIENT DELIVERY SCHEDULES
Overall, Bumbox's value proposition is well-aligned with the needs of both B2B (E-Tailers) and B2C (User). The company offers a variety of features and benefits that can help customers to reduce costs, improve efficiency, and increase convenience.
The services solve B2B to C:
Bumbox Express : E-tailers - Merchant - End customer (most feasible service for long-term)
drop@Bumbox HQ : Merchant - HQ - End customer (least sustainable due to contradictary from customer needs)
Retailer Self Drop : Merchant - End customer
Name : Robert Anderson
Company : Amazon
Industry : E-Tailers
Responsibilities : Products Logistics
In charge of Amazon
Managing the company’s
Shipping carrier Connections
By Providing a convenience and efficient of delivery for his clients, Bumbox may assist Robert in lowering shipping expenses and improving delivery quality. By giving his clients greater control over their delivery, Bumbox can also help Robert enhance customers satisfaction.
Name : Jacqueline Laura
Age : 22
Occupation : Undergraduate
Student
Income : SGD 5.000
Location : Singapore
Lifestyle :
Busy Student
Shops online frequently
Lives in a city apartment
Bumbox can assist Laura in overcoming her needs by providing with a simple and adaptable method of receiving her packages. Laura may pick-up her deliveries whenever she wants without having to wait all day at the apartment. Laura may enjoy her peace of mind knowing that her shipments are safe since Bumbox Smart Lockers are secure and monitored by CCTV cameras.
Smart locker is a promising business idea in Singapore considering its busy lifestyle, techsavvy, and shopping habbit. Despite the up-to-date tech resource and price negotiation advantages, the main challenge Bumbox facing is competitors.
Bumbox has values that responds differently to each customer segments.
We recommend Bumbox to target e-tailers as their market segment due to potential CAGR data, lower cost in product knowledge campaign (collab with e-tailers), unlock B2C opportunity, and the fact of 70% Singaporean loves to spend money for shopping.
Bumbox needs to reconsider their upcoming strategy, such as, increase customer experience, gain customer loyalty, acquire partners, and control quality services.
From 5.47 mio of Singapore population, the SOM that Bumbox could target reach ~510.000 customers which worth 170 mio SGD in a year.
Bumbox relieves customer’s pain on online shopping by giving the flexibility, convenience, time and cost saving, and increase privacy.
For the future plan, it is suggested for Bumbox to increase the quantity of their stations, to increase customer services and to compete with Singpost.