Non-traditional retailing

OM N I C H AN N E L R E TAI L S T RATE GY Corinne Syquia Christina Tai Louis Yeo

ABOUT THE B R A ND

THE

INCREDIBLY NICE

GOURMET ICE POPS

NICE POPS IS A BRAND THAT DOESN’T TAKE ITSELF TOO SERIOUSLY. It was created by Eddie Chan, whose dreams of getting into the Food & Beverage industry had led him to leave his career in advertising. Chan didn’t want to sell a product that had been done to death - in fact,quite the opposite, he wanted the product offering to be never before seen in Hong Kong, and target a niche market.

Thus, the creation of Nice Pops - a gourmet ice pops brand that puts a special emphasis on creating unique flavors and using the best ingredients. Each ice pop goes through strict quality control, from the ingredients to the final product.

Chan has always favored a “handmade look and feel versus a corporate, clean-cut look.” This handmade aesthetic is seen through the brand’s use of street art, of which Mr. Chan is a huge fan. He sees Nice Pops as an opportunity to bridge the gap between food and street art, tied in with culture (Bakker’s Bites, 2015).

THE

PRODUCT Nice Pops originally started out with producing gourmet ice pops, but had very expanded their product line to include slushies (which are HK$55-75).

The original ice pops come in a variety of flavors, from fruitier flavors to creamier varieties. The fruitier flavors are most popular in the summer.

The Nice Pops come in different sizes. The regular sized Nice Pops are HK$45-55 (HK$45 for the non-alcoholic versions, HK$55 for the alcoholic ones), while the smaller ones cost HK$30-35.

ALCOHOLIC - 20%

NON-ALCOHOLIC - 80%

PRICING

The retail price of the fruit flavor Nice Pops is 40 HKD. By estimating the cost of each ice pop which as 9.75 HKD, we figured out the estimated markup percent is 75%. Though the price point of the products is quite high compared to other brands, we realized through our interview with the founder, Eddie, that they have to price their products in this price point as they only use high quality fruits and sometimes even need to import them. Also Nice Pops positioned themselves as a premium ice pops brand, thus justify their price point.

TARG ET CUS TOM E R

WHO IS THE

NICE POPS CUSTOMER?

Chan describes the target customer as being 18 to 35 years old; are of median income; are willing to spend on dining and trying new things; and are international or have had an international upbringing.

This is an age group that belongs to the millennial consumer group. Generally, this is a consumer group that prioritizes authenticity and transparency, and would often turn to friends, social media networks like Pinterest, or Youtube vloggers for opinions. In addition to that, they like to research the products online before buying. (Basterfield, 2015)

CUSTOMER PROFILE:

ASHLEY Ashley is a young, 22-year-old Hong Kong local who has an international and affluent upbringing. She has studied both in the States and in Hong Kong and travels back and forth extensively. She is also known to be carefree, outgoing and adventurous.

Ashley is a free spirit. She is very open to meeting new people, and because she works as a barista in Repulse Bay, her work life isn’t too hectic. Her favorite hobbies include having fun and relaxing on the beach.

CUSTOMER PROFILE:

NICKI & JAYESH

Nicki and Jayesh are a budding couple who have been dating for 3 years.

They are health conscious and work out together frequently. Because they are huge animal lovers, they have a dog named Max, and are know to be very empathetic as well.

Nicki is a 26-year-old freelance yoga instructor, and has been fro the past 6 years. She is very mindful of what she puts in her body. Jayesh, who came to Hong Kong 5 years ago, is a 32-year old fitness instructor for an established gym. He enjoys weight lifting and is willing to eat anything new as long as it is natural and has no harmful preservatives.

As Nicki and Jayesh have median income levels, they will only spend on something if they think it is worthwhile.

COMP ETITOR S

LOLA’S ICE POPS PRICE: $30-32 WHERE TO BUY: city’super, The Hong Kong Cricket Club, Ladies Recreation Club, The Mixing Bowl, Tree, Yung Lok Beach Store Lola’s Ice Pops started out as an idea between three mothers: Julie Tuan Ru-yi, Sandra Wong Wing-yan and Vickie Hay, because they had wanted to create healthy treats for their children.

Lola’s Ice Pops are all-natural, hand made, and contain no artifical colors, preservatives, or fillers. The pops come in a wide variety of flavors, each classified into 3 categories: “Agua fresca pops,” “Creamy pops,” and “Chocolate Pops.” While all of their products aren’t necessarily vegan, they do create custom pops that cater to the cutomer’s dietary concerns. The company also does small personal orders, catering and corporate orders.

In terms of aesthetics, Lola’s Ice Pops seem to have a more feminine feel; their logo has a vintage feel and makes use of softer, pastel colors.

ISEE ISEE PRICE: $38-42 WHERE TO BUY: 138 Leighton Road, Causeway Bay; TMT Plaza, New Territories

Isee Isee was created by Candice Yeung. The brand has an artisanal approach to creating its ice pops, and prides itself in using fresh, quality ingredients.

Isee Isee aims to bring new flavors to its customers. The brand has up to 10 flavors in the shop everyday, with four core flavors strawberry Hokkaido milk, Earl Grey pistachio, cheesy raspberry, and kiwi. Yeung comes up with all the flavors herself, and has created up to 40 different recipes.

Isee Isee has its own shop in Causeway bay, and had recently opened a new shop in New Territories.

CU R R ENT MAR K ET ING S T R ATEG Y

CATERING Nice Pops have sold their ice pops for catering purposes. They would collaborate with brands for their events, where the ice pops would be given for promotional purposes.

Nice Pops would normally allow the brands to put their labels on the pops. Nice Pops is also open to customizing the pops for the brands, whether it be the flavors, or the look of the ice pops themselves. In the case of the Miffy event, for instance, the ice pops came in the form of Miffy’s face.

This channel seems to be the most successful of all the channels for Nice Pops. Besides selling to very big, well-known brands, it also allows for Nice Pops to meet a bigger customer base.

RETAIL PARTNERS Nice Pops also wholesales their products to several restaurants and cafes in Hong Kong. The Hong Kong Island area is doing much better than other parts of Hong Kong.

While Nice Pops has many retail partners, Nice Pops does especially well in these areas: Chicken on the Run, which sits by the beach (which is popular with young kids with rich parents); Green Common in Wan Chai; and Healthy Chicken in Quarry Bay.

EVENTS Nice Pops also sells their ice pops during events. These events mostly happen in the summer, typically by the beach, because the Summer time is their most successful season. They attend a variety events, ranging from yoga events to junk boat parties.

The Nice Pops staff usually mans the booth during these events, so while this is not their most successful channel, it gives them with the advantage of communicating directly with their customers.

DIRECT DELIVERY The direct delivery channel - which is basically their website - is their least successful channel. The webiste lack plenty of details - like the history of the company, the flavors available - and if there are details provided, they are difficult to find.

However, this presents an opportunity to improve on their e-commerce channel to become truly successful, and will become one of the focuses of the project.

PERCENT OF SALES PER CHANNEL

70%

20%

8%

2%

CATERING

RETAIL PARTNERS

EVENTS

DIRECT DELIVERY

AREAS TO TARGET THESE ARE THE AREAS WE’LL PAY SPECIAL ATTENTION TO FOR THE PHYSICAL RETAIL CHANNELS.

One of the areas that Chan has said does well is in the beach. Nice Pops has always done successfully in events in the beach, especially since the Summer time is their best season for business.

Nice Pops also does successfully in areas that target the healthier consumer.

Henry Chan has specifically cited three locations: Green Common, Chicken on the Run, and Healthy Chicken.

Generally, Nice Pops is more successful in the Island area. This is likely due to the fact that the Island area is more popular with Nice Pops’ target customer.

OMNICHA NNE L S T R ATEG Y P ROP OS AL

NICE POPS POP-UP SHOP @ SHEK O BEACH

ABOUT THE

POP UP Putting up a pop-up shop is the most attractive option for a brand as small as Nice Pops because the rent in Hong Kong is notoriously high, and the spaces are small. Pop-up stores present an opportunity for the retailer to minimize losses; opening a pop-up shop is 80% less expensive than opening a traditional retail store (Retail Touch Points, n.d.). Pop-up stores give retailers an opportunity gauge the consumers’ interests without committing to a permanent space (Dewolf, 2013).

The success of Nice Pop’s products are based on the seasons, and pop-ups have also been proven to be ideal for seasonal products. Ice cream and Yoghurt vendors, in particular, are known to set up seasonal pop-up shops (Klepierre, 2016). In a poll, 61% of of consumers had cited seasonal products as the reason to shop in a pop-up store (Retail Touch Points, n.d.). This has proven effective for established brands like Moet & Chandon, who opened a bar on the rooftop terrace of the Madison restaurant to promote their Summer champaigne (Klepierre, 2016).

In terms of aesthetics, the pop-up will stay consistent with the image that Nice Pops has made for itself. Since Chan had mentioned that the brand image had a more hand made feel, we decided to stick with that image, along with the grafiti that has become so integral to the brand.

WHY

SHEK O? Based on our research, pop-up shops are very successful when it comes to selling seasonal product. Since Nice Pops has the best business in the Summer - and customers go to the beach in the Summer - we felt that putting the pop up in the beach would be appropriate.

Shek O was the chosen location due to its popularity. This particular location is very popular once Summer rolls around, and the amount of traffic in this area would guarantee Nice Pops plenty of customers while the pop-up is happening.

POP-UP FEATURES First, the pop-up will have special-edition flavors. This is so that the pop-up will seem more exclusive, which in turn will give the customer the “fear of missing out,” and will therefore drive them into the shop.

The pop-up will also feature a personalization aspect, where customers can customize their Nice Pops by choosing from a selection of toppings and sauces. Nice Pops have done this before, in events for several companies, and this tactic has been proven to be very popular. Also, this experience isn’t available in other retailers or in e-commerce, so the exclusivity of this aspect will drive customers to this store. In addition to that, millennials are known to value “novelty, personalisation and shareability.” (Baterfield, 2015)

USE OF MOBILE The pop-up will also have an iPad, to a.) let the customers order flavors if they’ve run out in the shop, or if they’d like to order in bulk, and; b.) to let the customer know that Nice Pops does, in fact, have an online shop.

We used the store Oasis as the basis for our best practices. Oasis had presented an omnichannel opportunity in their stores by adding iPads in their stores, which presented an opportunity for customers to browse, pay and order online. “20% of store sales were made through the iPad each day.” (Traynier, 2013) We chose mobile for the main reason that the target customer who is between the ages of 18-30 - uses mobile extensively. A study conducted by Via stated that more than three quartes of millennials cannot live without a computer or a mobile phone (Estopace, 2013).

A 2014 study of millennials and mobile shows that nearly half of them use mobile internet 4 hours every weekday, and one in three uses more than 5 hours of daily use (Baterfield, 2015).

E-COMMERCE As Nice Pops’ current website does not communicate effectively with the customers, we reinvented their website with an e-commerce section. The e-commerce aims to improve the sales of direct delivery, which is the category has the most potential to expand on. By making the layout cleaner, and having headers like “shop” and “catering,” the website can give the customer a clearer view of what kind of services Nice Pops are offer.

For the home page, we added a video clip to show the fun and relaxed spirit of the brand because we believe a video can visually engage the viewers more.

We had a “Shop Now” button on the home page to encourage the visitor to shop using our e-commerce section. We used the term “Shop” instead of “Buy,” as statistics show that the shop button can drive 17% more clicks and improve the revenue.

“The hypothesis behind the test was that ‘Shop’ sounded much less committal than ‘Buy’, and would compel more site visitors to click through.” (Lindquist, 2014) Another significant problem we found from the current website of Nice Pops is the lack of information. Nice Pops positioned themselves as a natural premium popsicle brand; however, without providing enough information of how they make the products and their use of high quality ingredients, it is really hard to convince the customers to buy their merchandise. Thus, we want to be as thorough as possible with information in the product page to strengthen Nice Pops’ healthy and premium brand image.

With regards to integrating different channels, we will have a slightly different layout of website on mobile phone to provide a better shopping experience. Even though there are no apps for Nice Pops, we make sure the customers still can shop easily with their mobile phone without any compatibility issues.

E-COMMERCE To create a pleasing shopping experience on Nice Pops’ e-commerce, we studied some best practices of successful e-commerce sites to make the checkout procedure more efficient.

The first thing we will implement is to eliminate forced registration, which is proven to be a barrier to conversions (Charlton, 2014). The customer can just type their e-mail and buy the products without the lengthy registration procedure. However, customers will be encouraged to sign up after their checkout process.

The second thing we will implement is to make the order form as concise as possible. When customers register as a member, the system will automatically remember the information and prevent customers from typing their information on their second purchase.

Last but not least, we will include a progress indicator on the top of the page. By having a progress indicator, the customer will be able to track their order, which means the customer is less likely to cancel the order in the middle of the process (Charlton, 2014).

For the e-commerce site, we will have two different packaging designs. The packaging will include details that are the lacking on the current packaging, like the nutrition facts, ingredients and expiry date on the box. The color of the package will also change according to the color of the products.

The smallest package will contain 5 ice pops in the same flavors. The price for the small pack will be 180HKD for nonalcoholic flavors and the alcoholic falvors will be 200HKD. We will also have a party packs that include 10 ice pops that the customers can choose the flavors they want inside. The price for party packs will be 380HKD and each alcohol flavor will be cost an extra 4 dollars per each.

One special feature we will implement in our e-commerce is to out free starter pack that consists of three little tasters for the customer’s first e-commerce purchase. This was inspired by the best practices of cosmetics e-commerce sites like Ulta Beauty, where they promote other products and encourage more purchases from new customers by giving out free samples(Macdonald, 2013). “Most people feel a closer connection to a company when they’ve tried a sample product. It usually creates a law of reciprocity that, if they can’t actually use your product, they may think of someone who can” (Hollingsworth, 2015). We believe that this best practice can encourage customers to try more flavors of Nice Pops, which, based on our interview with their founder, is one of the problems they are currently facing. For regular customers, or for customers who purchase more than 800HKD, they will get a little surprise pack of new flavor tasters with note that invite them to give us feedback. “A sampling program is a marvelous way to test a new product before it’s gone into full production, or before you’ve committed to a bulk container load of. Sampling lets you see if customers actually like it, before you commit to more” (Hollingsworth, 2015).

SUGGESTED RETAIL PARTNERS As mentioned earlier, the physical retail spaces that are most successful for Nice Pops are the shops that focus on the healthconscious consumer. For that reason, we would recommend that Nice Pops partner with more spaces that this consumer would frequent.

There is a current trend in Hong Kong towards healthier eating habits. According to a study, “Only about one-out-of-ten of Hong Kong respondents are very willing to pay a premium (13%), while 36% of them are moderately willing and 13% who are not willing. “ (Nielsen, 2015) Some suggestion would include: Cedele (Central, Elements), Cafe O (Central), Mana (Central), Grassroots Pantry (Sai Ying Pun), Eat Right Restaurant and Wine Bar (Central).

The beach is another area that is most successful for Nice Pops are beach areas, where people frequent in the Summer.

Chosen locations include: The Beach House in Lantau Island, and Ming Kee in Po Toi Island.

SOCIAL MEDIA In order to interact wit the consumer and foster a closer relationship with our customers, more relatable posts will be made on their Instagram page. This is inspired by the best practices of Zgallerie, a home decor brand from the US. Posts like personality quizzes will engage the customers and possibly even increase the chances of the consumer to order online. In addition, through such posts, Nice Pops can establish itself as a fun lifestyle brand and personifies the Nicepops brand.

The CEO of the social media marketing company Moment.me, Dovev Goldstein, describes the personalisation of brands as one of the keys to good promotion. He talks about the importance of not only personalizing offers and tweets to individual customers, but also personalizing the business and give it character.

Authenticity is the key to successful social media. Accordign to Goldstein: “People create relationships with people, not with a soulless brand, so ‘personalize’ yourself as the voice of your business online and people will be more likely to trust, like, and ‘like’ you.”

In addition, according to Dovev, experimentation is key in social media. Quizzes or polls engage followers so that the social media page can be more interactive.

FOOD BLOGGERS/INFLUENCERS As Nice Pops hasn’t worked on their promotion very much, we decided that sending free samples to Instagram influencers or food bloggers for review purposes would be an effective and cost saving way to promote the brand. Based on our resea rch, Instagram should be the social media channel we focus most on as “Instagram gives brands 25% more engagement than any other social platform and our own analysis found that it generates a higher average order value than Pinterest, Facebook, Twitter, and Google Plus” (Wang, 2014).

P ROD UCT MA R KET EXPANS ION

MARKET PENETRATION THERE ARE 4 MARKET PENETRATION STRATEGIES The first one is lowering prices. According to Eddie Chan, they sometimes resort to selling their products through events and catering at no profit margins at all or sometimes at a cost. In addition according to Henry, the partner of Eddie, he claims that their ingredients are all natural and are carefully sourced, furthermore, he states that labour cost in Hong Kong is high and the prices they set is more than justifiable. Hence we think as of now, lowering prices can undermine the quality of Nicepops and is not suitable The second one is increased promotion. According to Henry, he states there have been some magazines who have reached out to him for exposure of the brand. However, he said somehow they did not reach out back to them. Seemingly, Nicepops is not doing enough to promote their product.

The third one is improving distribution channels. Nice Pops distribute their products in 4 ways: events, catering, e-commerce delivery and retail partners. E-commerce delivery and retail partners are the weakest distribution channels. A well-designed ecommerce site is important, so as distributing to the right retailers. There are some outlets which are not doing well and there are some outlets which doing particularly well. Take for example, one of the hottest spots is in Repulse bay. According to Henry, it is because there are a lot of rich kids who live near that area and they are willing to spend money on a lolly and it is by the beach. People love to buy icepops by the beach.

The last one is by improving the product. A good way to do that would be conducting a focus group and work on prospective consumers about ways to improving the product. Questions such as is it too sweet or is it too sour? What does eating 3 popsicles consecutively taste like? Does it change your perception of the product? Would labelling or transparency improve your decision with this product. (Sepherteladze, 2015)

MARKET DEVELOPMENT The younger target market - aged 6-12 - would be an ideal market to develop for Nice Pops. Parents are known to buy Nice Pops for their kids, and since kids are known to like sweet food, this would provide a healthier alternative to other ice pops on the market.

Since Nice Pops have non-alcoholic varieties, it could make for a good treat for the whole family. In addition to that, Nice Pops already sells ice pops that come in a much smaller size, which is perfect for children.

This could prove well financially for the company as well. In 2014, the kids’ market in the food and beverage industry was estimated to be worth $23.2 billion, and between 2012 and 2013, it had experienced a 4.4 percent growth. The industry is expected to reach $29.8 billion by 2018 (Italiano, 2014).

DIVERSIFICATION To diversify the product line to reach this target market, we decided to focus on creating creamier flavors.

The flavors for this line will still include the fruity flavors, but flavors like chocolate will be given special focus. Studies have shown that chocolate has plenty of nutritional value According to statistics, the popularity of chocolate in Asia has been booming due to this makret growing more accustomed to Western tastes (Chocolate Industry Analysis, 2016). In addition to that, chocolate milk is the third preferred food for children and adolescents (Caine-Bish & Scheule, 2007).

PRODUCT DEVELOPMENT Ice pops containing vegetable and fruit mixes could be the next product to develop.

Vegetables are known to have plenty of nutrients. Since Nice Pops targets the health-conscious consumer, this would be an attractive prospect. In addition, the competitors for Nice Pops have yet to develop vegetable/fruit recipes for their ice pops, so this would differentiate Nice Pops from the rest.

THAT’S IT. HAVE A NICE SUMMER!

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