AGENDA PROBLEM SOLUTION S.W.O.T. ANALYSIS IMPLEMENTATION & PROTOTYPES TOTAL COSTS ADDITIONAL SUGGESTIONS QUESTIONS?
PROBLEM How do we create an amazing in-store experience for our guests that complements the digital experience? How does that increase results in trip frequency, basket size, and topline sales? How do you make shopping at Target an event vs. just a trip for necessities?
SOLUTION Implement an augmented reality (AR) game system with microtransactions to the current Cartwheel app.
AUGMENTED REALITY
AUGMENTED REALITY Other retailers are beginning to utilize AR ○ LEGO ○ IKEA Catalog ○ Converse ● Goldman Sachs predicts that VR will be an $80 billion market by 2025 ● Digi Capital predicts that the AR market alone will bring in $120 billion in revenue by 2020
MICROTRANSACTIONS ● As of November 2016, Pokemon GO ○ Generated $600 million in revenue for developer Niantic in the 3 months since its release ○ Generated $115 million in revenue for Nintendo
CARTWHEEL BARCODES ● Light blue Cartwheel Barcodes will be placed strategically under existing Cartwheel signs ● AR Bullseye will guide the user to these barcodes for users to scan with the Cartwheel app ● Cartwheel Barcodes will be one-time use and will be active for 2 weeks ● Promote Cartwheel REDcoins and increase incentive to go into stores
APPAREL & ACCESSORIES For Apparel and Accessories: • When scanning Cartwheel Barcodes for Apparel and Accessories, a digitized version of that item will appear for Bullseye to wear • Cartwheel Barcodes will be scattered in Apparel and Accessories section for trial period
KEY UPDATES Daily special login and special times of week to unlock special coupons
Accumulation of coupons to redeem for larger
coupon for a limited time
Microtransactions for REDcoins to increase revenue
STRENGTHS •
Augmented reality will (1) create engaging omnichannel retail experience, and (2) add more value to mobile app and drive downloads
•
Increase in revenue due to microtransactions
•
Increase in foot traffic due to physical barcodes
•
Encourages daily use of existing Cartwheel app
WEAKNESSES •
Cost to hire a 3D augmented reality artist
•
App crash due to server overload
•
Increase in app size
•
Marketing and promotion costs
OPPORTUNITIES • Further development and updates to the application • Convert customers from other retailers due to increased eventful interactions while shopping for necessities
THREATS • Potential for other retailers to do something similar • Hackers may try to crack source code
IMPLEMENTATION REDwallet replacing My List • REDwallet will include both offers and REDcoins • Each Cartwheel Barcode scanned will add one REDcoin to the user’s REDwallet • Daily RED login rewards to incentivize daily use of Cartwheel • REDcoins can later be redeemed for additional coupons in an in-app Gacha Machine
IMPLEMENTATION REDwallet replacing My List (cont.) • Gacha Machine for prizes • 10 coins for random coupons • 50 coins for premier prizes • Random coupons will be any additional coupons for random products not already available on Cartwheel • Premier prizes may be: Target gift cards, 1-5% off total purchase, and more
IMPLEMENTATION Microtransactions ● Users may purchase REDcoins to use the Gacha Machine ● Microtransactions will create a new source of untapped revenue ● Example price model ○ $0.99 for 10 REDcoins ○ $5 for 50 REDcoins
TOTAL COSTS (FIRST YEAR) LINE ITEM
CALCULATIONS
COST
Yearly salary for 3D Artist (Glassdoor)
= $57,067
= $57,067
Labels (10 barcodes) - 4.25” x 5.5” (4 on 8.5” x 11”) - Requires 3 sheets of 100 lb cardstock ($1.75/sheet) every 2 weeks
= $1.75 * 26
= $45.50
Total cost (first year)
= $57,112.50
BENEFITS • Increase in revenue due to microtransactions and increase use of Cartwheel • In 2015, Target generated $73,785M in revenue • Even a 0.5% increase in revenue ($368M) will cover all expenses related to app development
ADDITIONAL SUGGESTIONS • REDcard Improvements • Connecting REDcard with Cartwheel • Adding REDcard support for Apple/Android Pay • In-store: (along with already existing promotions) • Window decals • Sticker or wrap decals on Target store carts • Signage within store • Cashiers promoting app when checking out customer
SOURCES https://qz.com/819677/nintendo-pokemon-go-profits-we-finallyknow-how-much-nintendo-made-from-pokemon-go/ https://www.forbes.com/sites/deborahweinswig/2016/10/26/virtualand-augmented-reality-become-realistic-revenuegenerators/#27d6a2406fc5 https://www.glassdoor.com/Salaries/los-angeles-3d-artist-salarySRCH_IL.0,11_IM508_KO12,21.htm https://corporate.target.com/annual-reports/2015