Table of Contents
Introduction
Notonthehighstreet.com serves as single channel for creative
small businesses in the UK and when it was launched in 206, the company was an
instant success after getting 16000 unique visitors on its first day of launch.
The company turnover reached to £15.1 million in
2010 from £100,000 in 2006.
Mission and Objectives
Mission
statements indicate the direction and tone of the organization, while
objectives provide an insight into the focused targets of a business to follow
the directions set out in the mission statement. In case of
notonthehighstreet.com, the business aims at becoming one of the most exciting
and fast growing e-commerce business in the UK. The company aims at providing
original things to its customers. Notonthehighstreet.com claims for looking for
the new ideas, designs from innovators that have the guts to make something
unique, personal, and beautiful.
Report Objectives
In the
wake of ever-increasing number of e-commerce companies in the UK, the
competition is becoming fiercer. The aim of this report is to analyze the
strategic business model of the case company (notonthehighstreet.com). To
conduct strategic analysis of the case company to find out the factors that has
played a vital role in the growth of the company. Compare its business model
with its competitors to recommend changes and suggestions for new businesses
and business under investigation.
Methodology
Because
the company in question is a social shopping entity, the social science method
of research is applied to gather information about the target company. We have
applied qualitative rather than quantitative research methodology to gather
secondary data about the company. Social scientists have widely used
qualitative research methodologies to examine the contemporary real-life
situations (Yin, 1984).
Business Style
Business
model consists of architectural configuration of different key elements that a company
adopts for its business (Yousept,I. & Li, F. 2004). The business model of a company gives insight into
the factor that how a company creates value for its customers and generates
revenues from the business. Afuah (2004) has
established that business model of a company is a framework of making money. Osterwalder A. (2005 ) have refined the understanding
of a business model, and according to them, business model is a conceptual
tool containing a set of objects, concepts and their relationships with the
objective to express the business logic of a specific firm. Therefore, we must
consider which concepts and relationships allow a simplified description and
representation of 
what value is provided to customers, how
this is done and with which financial consequences.
notonthehighstreet enterprises ltd hand-picks the products from creative small
business and sell these products on their e-commerce store
notonthehighstreet.com. Notonthehighstreet enterprises limited don not follow a
particular style or brand and everyone that can offer great and unique designs
of one’s creative quality products can sell products via
notonthehighstreet.com. The collection of items displayed on
notonthehighstreet.com comes from artists, designers, and curators and when any
customer buys a product, he or she actually buys from businesses of a
population of diverse and independent sellers. The strategy also helps in the
growth of local creative talent in the UK.
what value is provided to customers, how
this is done and with which financial consequences.
notonthehighstreet enterprises ltd hand-picks the products from creative small
business and sell these products on their e-commerce store
notonthehighstreet.com. Notonthehighstreet enterprises limited don not follow a
particular style or brand and everyone that can offer great and unique designs
of one’s creative quality products can sell products via
notonthehighstreet.com. The collection of items displayed on
notonthehighstreet.com comes from artists, designers, and curators and when any
customer buys a product, he or she actually buys from businesses of a
population of diverse and independent sellers. The strategy also helps in the
growth of local creative talent in the UK.
serves as
marketplace for all the talented businesses that affiliate themselves with the
enterprise. The customer selects from website and artist sent the item directly
to the customer. With more than 3500 small businesses, the customers get
various styles and products from the site. The customer pays at notonthehighstreet.com
using it as single checkout and gets the desired product from the original
creator directly. Notonthehighstreet.com charges 25%from the original artist
whereas customer pays for the product only including delivery charges if any
(notonthehighstreet.com).
As marketplace, notonthehighstreet.com provides
opportunity, support and community to the creative sellers. The sellers have
the opportunity to display their products to around 2 million unique visitors
of the website per month and through other marketing activities conducted by
the marketplace. Several of sellers have reached the magic figure of £1million turnover from zero.
like other
companies in the niche has plans for global expansion. Recently
notonthehighstreet.com has added multi-currency functionality to its website to
reach global consumers. To increase incremental sales from its conventional
channels, notonthehighstreet.com hired professional services to have an
accurate visibility of the ROI on its investments in the traditional marketing
channels. The move helped notonthehighstreet.com to gain a 25% gain across
generic campaigns by applying behavioural attribution model. I the words of
Senior Marketing Manager at notonthehighstreet.com, this move helped them
developing their internal operations around behavioural attribution model. The
company is gaining more from the metrics created by the behavioural attribution
model.
Market
Trends
In the UK, online sales rise 10% in the year 2012 but this trend
is going to decline in the year 2013(ystst, 2013). The top products sale were
apparel,media, music and pictures. More than three quarters of online shoppers
shopped online (ystat, 2013).
Recent E-commerce Europe Report by Mintel tells that online sales
will be doubled in 2018 touching the figure of 323 billion Euros. Mintel (2013)
suggests that online sales will grow to 188 billion Euros in 2013. The sector
will witness a growth of 1.8% in 2013. Non-food items will grow up to 1.0%.
Though there is a growth in the non-food sector, it still has to cross the peak
figure of 173.3bn in 2007. The retail stores ambitious of
expansion will continue their romance with Europe, India, and USA. Companies
with better convenience and competitive prices will be strong performer in the
market. Specialist stores with single product will suffer. The older shoppers
will make the most important demographic as shoppers age 55+ will rise by 31.9%
between 2011 and 2016. More customers will turn their back on high street in favour of
the cheaper online channels. (SAS, 2013).
Research
conducted by Javelin has found that in 2020:
...ecommerce will capture 34% of the
sales in [Clothing & Footwear, Electricals, Furniture & Floor
Coverings, and Health & Beauty] (up from 14% today), with the internet
influencing 75% of sales (up from 44% today). Sales through stores (including
those researched online) will decline to 66% (down from 86% today). Competitors
Notonthehighstreet.com is operating in the niche where
giants like eBay, and Yelp, Kaboodle, and Zlio are trying to attract customers
according to their own business plans, but they all lack the touch of creative
product line from the UK artisans.
SWOT Analysis
As marketplace, notonthehighstreet.com possesses
certain strengths, weaknesses, opportunities, and threats. The SWOT analysis
helps to understand and review a business to make decision about the business
itself or decide to venture on a new business.
Strengths
As
marketplace, notonthehighstreet.com gets huge exposure for being a success
story from scratches to millions
·
Winner
of around 20 awards in the niche
·
Huge
database of customers and sellers
·
Best
utilization of market mixes in accordance with the current UK retail trends
·
Huge
web presence as company gets around 1 million unique hits every month
·
Direct
linkages with creative sellers
·
Provider
of support and opportunity to small businesses
Weaknesses
·
The
company is not yet so strong in financial terms like its rivals
·
Not
giving 24/7/365 support to customers and sellers
·
No
valid check and balance on the sold goods
·
Chances
of fraudulent deals
Opportunities
·
Addition
in creative businesses list
·
Expansion
to other countries; firstly Europe and then rest of the world
·
Increased
number of traffic through mobile traffic using The
Thoughtful Gift Finder
Threats
·
New entrants working on the lines of
notonthehighstreet.com
·
Specific country conditions and
regulations that may not allow import of gift items from the website
·
Seasonal
buying
Seasonal
buyingPEST
PEST
is considered the best tool for assessment of marketing and business
development. It encourages proactive thinking for business development. A PEST
analysis of notonthehighstreet.com will give us opportunity to have more
in-depth knowledge about the company and environment in which it operates. PEST
provides analysis of external environment of the business including political,
economic, social, and technological environment.
Political
environment in the UK is business friendly and there is no such hurdle for
business growth and expansion for notonthehighstreet.com. UK’s relationship
with other countries may bring few opportunities or threats for marketplaces
such as notonthehighstreet.com. Any changes in the UK regulation or EU
regulation can affect the business of notonthehighstreet.com.
Social conditions are favourable for online business, as the value of internet sales has risen to 9.7% in 2013 while a peak in internet sales was observed in December 2012 at £844m (BRC, 2012). The UK government’s Plan for Growth is aimed at supporting the SME sector that will provide new opportunities for enterprises like notonthehighstreet.com as creative small businesses will enjoy the Business Rate Relief (Rhodes, 2013).
The business environment is increasingly becoming mobile oriented
and today it has become critical for any e-business to improve its mobile
capabilities. Notonthehighstreet.com has responded positively to this situation
by launching its social m-commerce app, The Thoughtful Gift Finder.
Being a pioneer in launching m-commerce app The Thoughtful Gift
Finder, notonthehighstreet.com has proven ability to coop with any
technological changes in the future.
Discussion and Recommendations
With more than 3500 SME businesses of home ware, fashion and gift
retailers on its list, notonthehighstreet.com is enjoying a unique position due
to its unique products and services. The ‘bespoke’website is made to ensure
that customers get shopping experiences that are tailored to their individual
needs. The company is making double from every previous year that shows its
business model is incredibly successful. There is further need for
notonthehighstreet.com to adopt such a strategy that attracts both its distinct
audience, the independent retailers and customers. While retailers need their
artisan-style products be showcased on website, the customers need
personalization and individuality in the global village.
Though
notonthehighstreet.com has demonstrated the power of original products and
customers believing in individuality, notonthehighstreet.com is not satisfied
with its efforts and it does not want to become a victim of its success, so in
the words of Product Manager at notonthehighstreet.com, “we know that customers keep
coming back time and time again because we offer them something very
different to the products and experiences delivered by big retailers. Ours is a
very personal service for discerning individuals, and we have to maintain this
if we, and our retailers, are to continue to grow.”
Notonthehighstreet.com
is not only winner of 20 awards of entrepreneurship and customer service; it
has been ranked first retailer and ninth overall in the Sunday Times Virgin
Fast Track 100. On the technology fronts, notonthehighstreet.com is ranked
eight at the Technology Fast 50. The company fetch award of ‘Women of the Year’
for its founders Holly Tucker and Sophie Cornish.
Starting
a website right in the middle of recession proves the determination of its
founders and in the words of Cornish, executive director notonthehighstreet, "What we offer to customers is
incredibly recession-friendly in the sense that you don't have to spend a huge
amount of money to give somebody a gift that really feels like it has value.
That sense of attention to value is what we do."
From
the above discussion and evaluation of the business model followed by
notonthehighstreet.com, we have come to suggest certain recommendations that
can be helpful not only to notonthehighstreet.com but also to any of its
competitors or new entrant that want to become a successful online marketplace;
·
Notonthehighstreet.com has refused
business of millions of dollars where it felt the manufacturing small business
would not come up the standards of its esteemed buyers by understanding the
consumer needs rather than business partners and income. Any company willing to
follow the footsteps of notonthehighstreet.com should pay specific attention to
the needs of customers. More personalized services for these customers would
accept such customers in the light of their shopping behaviours and ultimately
generate sales.
·
Notonthehighstreet.com has developed a strong and loyal community
of customers that has become a strong bargaining power of the company and is
bringing in lot of advertising and investment. As notonthehighstreet.com has
relatively smaller and medium sized business partners they do exert small
bargaining power over notonthehighstreet.com.
·
Becoming global is not necessarily the key to success, as Cornish
has said, they do want to become global but first they want to become household
name in the UK, hence any company venturing into e-commerce should first study the
chances of its success at local level.
·
Differentiation is one of the key success factors behind
notonthehighstreet.com, for the reason that it does not keep lion’s share of
the sold product but charges reasonably to its suppliers. Secondly, notonothehighstreet.com
has a niche market that does not involve heavy spending and anyone can opt for
spending few pounds to send a gift to a loved one.
·
We should remember that in this fast paced world, the convenience
has become the core factor in how people shop and with the ever increasing
change in technological aspects of shopping, the retailers and marketplaces are
widening their horizon of offerings while consumers are zeroing in on hassle
free shopping.
References
·
Afuah Allan (2004) Business Models: a strategic management
approach, McGraw Hill/Irwin, cop. New York.
·
Concept‖, Communications of the Association for
Information Systems, Volume 15, Article, May 2005
·
Javelin Group press release, 31% fewer town centre stores by 2020, says
Javelin Group report, October 2011
·
Osterwalder, A. (2005) Clarifying
Business Models: Origins, Present, and Future of the
·
Rhodes,
C. (2013), The Retail Industry, Standard Note, House of Common Library
·
Yin, R. K. (1984). Case study research: Design and methods. Newbury
Park, CA: Sage.
·
Yousept,I.
and Li, F. (2004) Online Supermarkets:
Emerging Strategies And Business Models In The UK, University
of Newcastle upon Tyne Business School, United Kingdom
Web pages
·
http://www.ystats.com/uploads/report_abstracts/1021.pdf?PHPSESSID=be5f8628a79d29eb3c64c404f59c7854)
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