In a world of growing awareness for environmental issues, the problem of food-waste in the United States provides a great opportunity to create businesses that profit investors, consumers, and the environment. Spoiler Alert Inc. will target people who are concerned with the massive amount of food waste in the United States, as well as, consumers who are simply seeking efficiency in their meal preparation. To attract users, and become a nationally acclaimed app, Spoiler Alert Inc. will offer a freemium business model that will attract initial users and introduce them to our innovative OCR scanning technology. With the advantage of our dual-mission business model, Spoiler Alert Inc. has the potential to grow a profitable, widespread application.
Freemium Business Model
We chose to work as a freemium business model as this would be a new concept for our customers and with this model they would have the option to try out the app before upgrading to a premium plan. A new customer will have a limit of 50 items that can be added on the app, after which they will have to pay a monthly subscription fee of $3.99.
Customer Data Monetization
We also plan to sell the data to our partner grocery and supermarket chains whose ads would be shown on our application in the form of banners and pop up ads. The data collected by Spoiler Alert Inc. will improve our partners’ advertising efficiency as we would be telling them when and what to advertise to customers based on the customer’s actual needs at any particular moment. For example, a customer’s bread expires in 4 days, this data would be stored on our servers, and then sent to our partner grocery store. Knowing that after 4 days this specific customer will need bread, the grocery store can send bread advertisements and coupons to this customer, who is most likely to make a purchase.
We at Spoiler Alert Inc. believe in saying that, ‘click a picture and let us remind you of your food expiring soon’. We strive to make this app your day to day reminder application for all your food products. Based on our competition’s customer feedback and our research in this industry we found that a serious technological update was due in this market, that led us to incorporate the OCR technology into the phone’s built in camera. This would make it totally hassle free for the user to enter the expiry date of a product into the app. Additionally, the customer will have access to a wide pool of coupons directed to their usage. The application will also have links to our partnered blogs which will suggest the user of all the delicious recipes that can be made at home. And all of this with a motive to reduce food waste in America.
In the company’s favor are its internal strengths: a high quality and user-friendly platform, an innovative and patentable use of OCR technology, an experienced managerial staff, and a large and diverse team of engineers and designers committed to reducing food waste. Externally Spoiler Alert has the opportunity to fulfill the desire of the growing number of families, grocers, and restaurant owners, who want to reduce waste and maintain healthy lifestyles. Additionally, opportunities to build on our design are available through the increased availability of OCR research and data entry technology. Most importantly, our diverse customer target market promises to offer stockholders high ROIs.
Among the unfavorable factors, Spoiler Alerts’ main weaknesses are the growing use of similar data entry technology and its lack of a nationally recognizable brand name. With these internal weaknesses, the company faces the threat of proprietary infringement and stricter government regulation of data mining activities.
Figure 1 shows internal and external factors affecting the market opportunities for Spoiler Alert, Inc. This S.W.O.T. analysis highlights the company’s strong potential for success, while also acknowledging some areas for improvement.
|FIGURE 1. SWOT ANALYSIS|
|Management||Entrepreneurial management and tech industry experts who are environmental activists||Small size restricts access to lower levels of development and design teams|
|Offerings||OCR technology, afforadale, and user-friendly||Some lower quality and lower cost competitors|
|Marketing||Large distribution online and with social networks.||No established brand recognition|
|Personnel||Talented and diverse workforce who value the company mission.||Lack of cross training leads to customer dissatisfaction with technical support|
|Finance||High demand for customer data and advertising space among local grocers||Lack of brand recognition results in limited subscription revenue|
|Manufacturing||Diverse team of designers who appreciate aesthetics and app practicality||Lack of space for research|
|Research & Development||Large R&D Team of talented engineers||Challenges related to widening application usage|
|Consumer/Social||Diverse market among families, grocers, and restaurant owners. Appeal the health and environmentally conscious||Consumers favor long standing brand names, and they won’t see financial savings until a few months after app use|
|Competitive||Distinctive name, appealing and user-friendly application, patentable OCR technology, and access to store coupons||The emergence of low quality and/or high-cost applications for food inventory and tracking systems|
|Technological||Increases in research and access to innovations in app-based technology||Infringements on proprietary technology.|
|Economic||Frugal consumers who enjoy the convenience of finding deals quickly||Increasing number of people eating outside of the home|
|Regulatory||Accreditation by the Better Business Bureau and Green Seal for trustworthy and environmentally safe business practices||Revisions and/or amendments to data mining regulations|
Among Spoiler Alert’s many features, it has four significant “points of difference” that enable it stand out amongst the competition:
- Proprietary use of embedded OCR software. No known competitor includes OCR software in their application. Most of the above applications require users to take a photo of their items, and manually assign dates and reminders to each product. Although the Samsung Family Hub app does not require photos, users must manually assign labels and reminders to each item in the refrigerator. The innovative use of OCR software will provide revolutionary value to our customers. With Spoiler Alert, customers can simply snap a photo of any product expiration date, and the application will automatically label, sort, and set expiry reminders. This OCR technology will not only offer customers ease of use, but also the convenience of photographing their purchases while they are shopping.
- Access to coupons from local grocers when the customer needs it. Young business professionals, families, and restaurant owners are increasingly concerned about saving time and money. To meet the demand for convenient and affordable products, Spoiler Alert, Inc. will partner with thousands of local grocers and produce manufacturers to offer our customers timely coupons and product notifications. No more searching the newspaper or internet for deals, our servers will save each customers’ data, so that they can find the food they need at the price they want.
- Affordable subscription cost. Our mission is to reduce the amount of waste generated in the United States, and to contribute to cleaner and healthier neighborhoods. Therefore, our team will offer customers one-month free access to our application, with a subsequent monthly subscription of only $3.99. With this low cost subscription, we hope to create a competitive price that enables us to enter the industry with ease, while simultaneously ensuring that every American household, grocer, and restaurant owner has the opportunity to save money, improve their health, and reduce food waste.
- Ability to export data to CSV spreadsheets. This feature is especially useful to restaurant owners and local grocers who have to keep track of inventory. The Spoiler Alert app will aggregate users’ data, so that users can import information to CSV spreadsheets such as Excel, Numbers, or Google Sheets. From there grocers and restaurant owners can manipulate the data to track products and expiration dates for monthly inventories.
Of the all the app-based competitors, priced at $9 a month, Expiration Reminder is the most expensive app and web-based software on the market for food expiry reminders . However, Expiration Reminder directly targets business’ interested in tracking document expiration dates, and not food. So while Expiration Reminder has the ability to track food expiration, its services, document collaboration, integrative systems, web tutorials, and document import/export, do not offer much value to Spoiler Alerts’ target base target market. Spoiler Alert Inc. will find a formidable indirect competitor in the luxury refrigerator appliance industry. Today, Samsung is leading the way in smart refrigerators with the creation of the Family Hub Refrigerator. The Family Hub refrigerator comes with an application that, amongst other things, also reminds the appliance owner of any refrigerated food that is expiring; however, the price of this appliance, starting at $2,293, is far beyond the means of the families in our base target market.
The applications, Fridgely, USDA FoodKeeper, and Expiration Reminder, have large distribution channels through Android, iOS, and Windows app stores. The accessibility of these applications coupled with the strong brand equity of Samsung, may create a challenge for Spoiler Alert, Inc. to enter the expiration reminder industry as a superior brand. Nonetheless, the points of difference from competing brands are substantial enough to make the Spoiler Alert app valuable to all consumers and stakeholders.
We acknowledge our direct competitors to be application services such as, Fridgely, USDA FoodKeeper, and Expiration Reminder. These applications are the only major app-based food expiration reminders that exists in the US market. Fridgely is the most readily known app-based food expiration reminder, and is priced as a freemium at $1.99. Fridgely’s offerings are the most similar to the Spoiler Alert, Inc. app, due to its embedded barcode scanner which can read expiration dates, and, like Spoiler Alert, its premium version allows customers to export data to CSV files, such as Excel. Fridgely can also find recipes and assist users in creating a shopping list. Another competing application is the United States Department of Agriculture’s (USDA) FoodKeeper, a free application that requires users to manually input food products and reminder notifications. Uniquely, FoodKeeper offers 24/7 in-app chat with a virtual USDA representative that allows users to ask questions for immediate assistance. In addition, the FoodKeeper app provides food safety and cooking tips based on the latest research, and notifies users of recommended use by dates for most food items. Despite its backing from the USDA and versatility, many users find that FoodKeeper’s lack of technical support and unclear safety recommendations render the application useless — a problem that Spoiler Alert, Inc. guarantees to resolve.
Mobile Apps have become a necessity for businesses in the last five years. In 2017, 42% of all small businesses had a mobile app, and 30% were planning to build an app in the future. Consumers in all segments increasingly rely on mobile apps in every aspect of their day-to-day life. The following are current and expected mobile apps trends:
- As of June 2019, more than 80% of internet users in the U.S. own a smartphone.
- By the end of 2019, mobile advertising is expected to represent 72% of all U.S digital ad spending, although 70% of mobile app users report disliking mobile advertisements.
- In 2018, American adults were spending on average 3 hours and 23 minutes on non-voice mobile media per day, which is an increase of more than 1 hour from 2013.
In the United States, awareness of green and environmental issues is growing by the day, and among them is the growing problem of wasted food. Today, about 40% of all food produced in the U.S. is wasted, and a large portion of that food waste is caused by a lack of attention to expiration dates. A national survey conducted in 2018 found that 76% of the population was “concerned” or “extremely concerned” about the amount of food wasted in the U.S., while only 7.3% of the population was“not concerned”. Moreover, the world economy is quickly moving towards a greener economy by way of renewable resources and greater preservation of the planet. In a recent survey, 66% of all consumers, and 73% of millennials, were willing to pay a higher cost for sustainable goods and services. These economic trends, and the growing awareness of food waste, support a venture, like Spoiler Alert, Inc., that aims to prevent the waste of planet and human resources. While Spoiler Alert, Inc. is set to accomplish its mission, it must overcome the challenge entering a saturated app market by finding ways to target the right users, specifically those who are empathetic to environmental issues and want to save money.
The United States economy has been witnessing a remarkable recovery since the Great Recession of 2007. The growth in GDP went up from 2.2% in 2017 to 2.9% in 2018, with projections for a growth rate of 2.3% in 2019. Additionally, the unemployment rate in the U.S. and New York has been declining in the last several years. In the U.S., unemployment dropped from 4.1% in 2017 to 3.9% in 2018 with projections to lower to 3.6% in 2019. In New York, the unemployment rate increased only slightly from 4.2% in May 2018 to 4.3% in May 2019. Despite the overall decreasing rate of unemployment, recent shifts in consumer spending show a preference for online shopping and a decrease in holiday shopping. Describing this shift to online shopping The Balance reports: “Consumer spending was at a rate of $14.24 trillion as of the first quarter of 2019. U.S. retail sales were soft. Total holiday sales only rose by 2.3%. That’s lower than the 10-year average of 3.5% annual increase before the recession. Fewer people shopped on the three-day Black Friday weekend in 2018. That’s because they waited for online sales later in the season. Consumer spending trends show a definite move toward online shopping versus shopping in brick-and-mortar stores. Department store sales fell by 3.3% while online retailers saw a 3.7% increase over last year” . Another indication for the strong economy is the constant raise of the confidence consumer rate in the last years, although the Consumer Confidence Board reports that the Consumer Confidence Index went slightly down in June 2019 to 121.5, which is the lowest level since September 2017.
The nearing presidential election of 2020 will emphasize critical issues that may have a crucial impact on small businesses. For example, Dem. Bernie Sanders promises to pass the Loan Shark Prevention Act, that would set interest rates for consumer loans and credit cards at 15%, so that entrepreneurs and small business owners can have better access to the credit they need to build and grow their companies. Likewise, Republicans are planning a campaign with promises of additional tax cuts that will also benefit small businesses.
Food waste is a huge problem all over the world. In the United States of America, for example, approximately 40% of all food is thrown to the trash. This has caused several drawbacks to American society, the most pronounced of which is price. Food waste causes over $218 billion dollars to be wasted in the economy annually, at every stage of the food manufacturing process, such as fertilization, croplands, water, energy, livestock, etc. These amounts of waste are unprecedented and occur at both the institutional and retail levels. Our solution to help this problem is straightforward in its logic: to help aid people be more mindful of their wasteful habits, and keep track of when food is about to expire. Currently, people simply do not have the time or the mental energy to manually organize their eating habits. The technology we will be using is OCR( Optical Character Recognition), and the powerful cameras that smartphones have. This technology will be utilized in our mobile application, and users will be able to simply scan the barcode of any food item, and be sent push notifications directly to their mobile device, informing them of expiration dates and reminding them to consume their food before that happens. Customer’s data would be stored on the back-end of our application, which includes both the servers and databases. Customers would include young people, people who want to cut back on costs, working class people, and environmentally conscious people, among others. Among all contributors of food waste, Restaurants and food sellers are the biggest. The adoption of our application would be beneficial not only to retail consumers, but also would reduce the costs are food establishments. Our team is committed to seeing the completion of this project, and would appreciate any feedback, questions, concerns, etc.