Independence Market

Market

Target market

In simple terms we're targeting middle class mums in approximately 30 postal territories. Here's why:

• We’ve invested heavily in understanding the precise consumer segments that would be most open to our service based on their stated desires and needs, and we’ve tracked them based on their density. This density analysis should allow us to avoid the common inefficiencies of mass communication campaigns by knowing at the very least that any investment is reaching the right audience.

• We worked with a team from Oxford to develop an artificial intelligence algorithm that would allow us to pinpoint individuals through their social expression who matched the right profile; we leveraged email addresses sourced through the AI program along with data derived from our quantitative research and fed this through a cluster analysis program to arrive at our high-value consumer segments, what we call Target Clusters. This sophisticated targeting data allowed us to pinpoint 3 consumer clusters referred to in Mosaic as 'City Prosperity', ‘Domestic Success’ and ‘Aspiring Homemakers’ representing an estimated 4.5M households across the UK that are the most likely to be interested in the Independence Market offer. However our priority in the near-term is London where some 2.5M of these are situated.

With this insight in hand we believe we are in a position to know precisely where to recruit our Community Partners - mums that are the face of the brand in each community, each of whom is focused on recruiting customers and monitoring market feedback - based on high-density neighborhood. It also enables us to know exactly what our target audience spends within certain product categories, enabling us to refine our offer based on greatest opportunity.

Characteristics of target market

Our 3 consumer segments are described this way:

• City Prosperity: High status city dwellers living in central locations pursuing careers with high rewards, representing approx.

• Domestic Success: Thriving families who are busy bringing up children and following careers, representing approx.

• Aspiring Homemakers: Younger households settling down with young children, representing approx.

We have identified 13 sub-segments within the 3 higher level segments, 10 of which earn in the top 20% of household incomes, according to our research. And, to give you some perspective: Putney, where we launched the service, has approx. 114,000 homes that fit our profile.

A significant % of this group are peak earners and spenders, here's what their spending behaviour looks like: we estimate that the avg. household spends c.£1650 per month on expenditures of future interest for our business. Specifically, we estimate that their avg. weekly spend on food/non-food purchases is £420 amongst the top spenders, and food and grocery, excluding restaurants, accounts for 54 pence of every £1 spent in retail. According to Kantar the typical household makes 250 visits a year to a food store, this accounts for the massive growth in convenience retail, and this is happening in parallel to growth in the ready meals/home delivery meal categories, one of the fastest growing categories in grocery. Convenience retail and food is a basic necessity for our busy mums.

Marketing strategy

One of the key reasons we invested heavily up-front in targeting data is because the core strategy for new customer acquisition centres entirely around geo-located recruitment.

First, we believe a key daily challenge faced by our core customers is getting dinner on the table - this daily need means consideration and the desire for solutions is high, and mums are highly inclined to share ideas for these solutions (making word of mouth key for our business). We launched by recruiting 30 families who we involved in the development of our first menu - this sense of ownership on the part of our 'charter customers' led to strong referrals on to other mums.

We then supported this with strong referral rewards (coded offers for both referring mums and to referred customers). We followed this with geo-locating social media outreach by identifying social clusters (online mums' groups, school Facebook pages, etc.) and building relationships with those groups.

We've now begun the central phase of our marketing/sales effort by recruiting what we call 'Community Partners' (think of them as Avon reps) who are the face of our brand in each community. Their focus is on hosting dinners with invited prospects, identifying other 'host mums' who themselves host dinners, finding opportunities for us to be present at localised events (for example school fetes) and by offering an aggressive incentive for try a 'first meal on us.' The CPs additionally identify their localised social clusters and media who we then build outreach to.

The plan beyond this direct marketing is to support our CPs with geo-fenced Facebook advertising, this is supported by a customised targeting plan we've worked in collaboration with Experian (to our knowledge the only company that Facebook collaborates with on consumer profile overlays to enhance targeting) on.

Competition strategy

While there's been significant activity in the area of meal delivery services, we don't look at these businesses as our key competitors. Our key competitors (and potential future partners) are grocery chains - these companies still, by a very wide margin, capture the lion's share of 'wallet' from our core customers. Our job is to provide a service that simplifies a mum's life vs. following the well trodden path to a grocery store.

Overall: we're marketing ourselves exclusively to middle class mums, and we do so through a combination of an e-commerce platform and reps who live in each of our communities. We believe our service reflects certain realities that our competitors, be they grocery or otherwise, haven't captured in their offer: our meals are family friendly, first by rotating a new series of offers every week anchored by different family-orientated recipes from different regions like Spain, Mexico, Canada, etc., this to help mums keep it interesting for their family. We complement this with what we call 'Favourites', comfort food options based on dishes we've trialled that have sold well, this to create familiarity.

The majority of UK mums make 2 or more meals a night, therefore our portion sizes are for 1, 2 and 4, we consequently have families that order multiple dishes for different members of their family. We've heavied up our vegetable offers because we have observed mums have a concern with their family getting their '5 a day'. Next, all our meals can be made in c.30 minutes or less and we offer dishes that can accommodate a range of cooking methods: stovetop, oven, microwave, BBQ and slow cooker. Additionally, this being significant vs. HelloFresh!, a company that's raised significant investment, we don't require a subscription to order from us - people have the need every day, we don't ask them to adapt to our model. We also use wooden packaging designed in France that can go straight into the oven or freezer. We've specifically built a business to make choosing us easy.