Only for the last year, people spent more than $9.5 bn dollars on unwanted gifts, which results in the demand dissatisfaction. That is why our company decided to solve this problem. Smappy team has implemented the deep personalization system in the app and all shops-partners were selected by hand to provide the unique range of gifts which crucial for our customers.
The hypothesis is tested and proved, 70% of target audience has faced the gift-giving dilemma and 87.5% of respondents wait for the platform capable of choosing a gift instead of them. Therefore, we have created a solution - mobile app Smappy, where users can choose a gift from the vast range of presents provided by the chain and small authentic shops, furthermore, there is a machine learning algorithm that helps users to choose a good present for a gift receiver. For now iOS version is only implemented. The release is planned in November.
Market Size Gift-giving in the United States is currently a $465 billion industry, with some reports pointing to a heftier $700 billion. In 2014, Americans spent around $19 billion and $21 billion on Valentine’s Day and Mother’s Day alone, and over 90% of American households engaged in gift- giving at some point in the year. Furthermore, although it enjoys peaks during the holiday season, gift-giving is an active market throughout the year since 60% of the average gifting budget is spent within the first 10 months of the year. With the typical annual gifting budget ranging from $700 to $2000 per person, gift-giving is indeed a lucrative industry.
The total addressable market is the global gifts retailing market is estimated at $ 77 billion
Problem or Opportunity
The problem is the gift-giving dilemma, and the target audience is people from 18 to 45 years old. We have done research and received the following results: people spend on average 13 hours on seeking a present, 81.7% of respondents consider gift-giving dilemma as personally important and 87.5% are seeking a convenient solution, i.e. platform that will help to choose a present quickly. We believe that our product will be popular among the target audience, because there is a machine learning algorithm simplifying the gift choice, the average price of a gift on our platform is 30$, whereas, people tend to spend 32$ on average, and provided small shops on our app are personally approved, so we minimize the probability of fraud.
Solution (product or service)
Our solution to the problem is the mobile app Smappy. There are three major advantages which work for our audience:
1) Fast gift choice
Machine learning algorithm collects open-source data from the gift receiver’s social networks and suggests relative gifts. User can, also, set a budget of a present.
2) Creative range of presents
To avoid the boring gift patterns our team decided to partner with small gift shops that have a unique assortment of usually hand-made goods.
3) Works even with the lack of data
In case of gift receiver’s modesty or unwillingness to share information in social networks the app enables to choose a gift by answering some questions.
Our biggest competitors are Giftagram and Token. Our competitive advantages relating to Giftagram are a vast partnership with the gift shops and developed machine learning algorithm. Concerning Token, first of all, Token is a platform especially dedicated to corporate gifts which is not a primary field of Smappy. Also, there are such competitors like HelloPrint, however, they have a lack of gift personalization and diversity.
Advantages or differentiators
Our main competitive advantage is a unique recommendation system, which provides a high level of gift personalization. Besides, we select shops-partners only by hand what results in creative range of gifts.
Our revenue is planned to be:
1 year = $277 420
2 year = $1 387 099
3 year = $2 774 198
4 year = $5 548 396
5 year = $8 322 594
if the following conditions are provided:
- conversion from marketing is at least 10%
- conversion from total usage and subscription purchase is at least 3%
- an average bill of gift is $30
- user outflow rate is 30%
ROE of our project is 164.67%
Money will be spent on
Boost marketing, hence, sales. Embed the AR for gifts in the app.