The Industry Is Growing

The global retail sales for baby and related products have exceeded 350 Billion dollars, and is anticipated to maintain a compound annual growth rate of 6.25% going into the 2020s. Though the overall (geographic?)competition is high, as population and birth rate increases across the world, there is enough growth in the market for new entrants to exploit.

Furthermore, the baby product market is unique that most consumers are first-time purchasers, and will then subsequently semi-permanently exit the market. Hence, a differentiated offering that goes beyond the product, that of which holistically touches the family-starting experience backed with credible reputation and positive relations will ensure our success.

The Competition

In the baby product industry, there are many competitors depending on the specific market a company is going into. In the case of SUKI, we are going into the non-consumable products of the baby product market. The competition in this section of the industry is huge, nowadays startup companies are very popular for new parents. The main competitors for SUKI are Stokke, Baby Bjorn, Bugaboo, UPPAbaby and ErgoBaby. These companies are our main competitors in the baby product market, some of these companies, like Bugaboo, and UPPAbaby are companies that their main or only products are strollers. These companies wouldn’t become our competitors until the rest of our baby products, like strollers, high chairs, and car seats, became part of our business. Until then, Baby Bjorn, ErgoBaby and Stokke are our main competitors. They are companies that are very well known by families and parents that have had children or know of them because of family and friends. 

Target Segment

End users in the baby product industry are parents. In the case of SUKI, our end users are Millennial parents. Millennials are the generation that was born between 1981-2001. The Millennial generation is generally marked by an increased use and familiarity with communication, media, and digital technology. 

Millennials are not only our target market but they are going to be our end users. We also have to target family members and friends for when they are going to buy gifts. But the end users at the end are Millennial parents; they are the ones buying, receiving, and using the baby products. From carriers to strollers to high chairs. Millennials are a generation that follow trends and health.

Research shows that Millennials are environmentally conscious. We found out that Millennials are more conscious of the effect on the environment of the decisions they make more so than the previous generations. When Millennials are making decisions of what to buy, they tend to be more mindful of the environmental impacts by the materials and processes involved in the production and distribution of the products. Millennials also tend to be more conscious about recycling of the materials. 

To serve a customer base that is committed in purchasing exactly what they want and need, we must offer meaningful and relevant information about our offering in attractive presentation through accessible channels.

Service Offering

The diagram encompasses different services and goods that will be offered by the company. In the beginning, we will offer our flagship baby carrier product through our online only store. Following up with Suki’s success, we will expand our offering with a variety of proprietary, non-consumable baby products like strollers, car seats, and high chairs. We will also expand our offering with other enhancing/promotional services. After several years in the market, we plan to partner up with hotel chains, airlines and car rental providers. Through the partnership, customers of hotels, rental cars, or airlines can try our products all the while having the benefit to travel without all their big baby products. In this way, parents can have free hands and have better experiences when going on trips or vacations, on Suki.

Service System

Product Cycle

We are dedicated in conducting our business as sustainably as possible. We developed the stainability initiative based on the idea of the circular economy model, which minimizes wastage by directing used products back into the recycling loops. This system must be supported through our long-lasting design, repair, reuse, remanufacturing, refurbishing, and recycling system.

We anticipate that some customers will return their purchases once the business is operational. The returned products will re-enter the market as re-shelfed, “like-new” products once we build sufficient inventory in the first year of operation. By year two, we should be able to even sell the used products, as we incentivize customers who no longer need their products to send them back in. With the help from our third-party recycling company, we can build inventory of broken/used products that are in poor condition. Once they reach a critical mass, we can begin to harvest different components of the products and send the functioning parts to for reassembly and sold as refurbished products at attractive price points.

By employing this model on our business, we will not only reduce the amount of waste that ends up in landfill, but also dramatically extend the fiscal life cycle of our products. Additionally, we are hoping to raise the environmental awareness within the industry and lead as a  positive example for our competitors to follow.

Brand Identity

Here at Suki, we understand the struggles, the responsibility, and mostimportantly, the joy of raising a child, which is why we are committed to support the loving bond between parents and their children. We believe in making the difference of child care becoming from routine to a meaningful and joyful experience. Suki is also a design-driven company that values high level innovatiopn.  Therefore, we will constantly look for innovative solutions and improvements based on our rigorous safety and quality standards and by learning from the community. We will make sure that we not only develop safe products but also provide parents with good information through our online platforms.

Suki is also committed in reducing waste and keeping resources in use for as long as possible by extracting the maximum value from them whilst in use, then recover and reconstitute products and materials at the end of  their life cycle. 

In the consumers’ perspective, we are noticeably differentiated by: 

1. our unique product offering, i.e. baby carrier with back support system and the rental to ownership program. 
2. streamlined process, which lower the cost of manufacturing, and increase the efficiency for every service touchpoint. i.e. outsourcing manufacturing and bundling it with the majority of the distribution. 
3. We have a rigorous safety and quality standards to follow, and we always strike to provide the best customer experience. 
4. Our operations are made sustainable by reusing, refurbishing, and recycling products and materials.
5. We support the community through co-creation with our users, so that we may learn from the commnunities and the users to improve our product and service quality.

Business Model

Based on our insights generated from industry and market research, we decided to base our business model on some of the best performing online baby brands such as Baby Bjorn and Stokke. These brands rely on their online platforms to sell their baby goods and conduct a significant portion of their marketing by being active members of the online parenting community. 

As such, our value propositions, distribution channels, and customer relationships are very similar to these other firms. We offer 2 complimentary value propositions. The first offering is our baby goods. They are distributed to our customer base through our online store. To differentiate ourselves from the competition, we offer our baby goods either New or used, with the ability to pay either full price upfront, or spread out through a payment plan. Product customization, warranties, and other options are also offered. The second offering are our articles, videos and other media, created by our writers, centered around sustainable parenting. This is free content that is distributed through our online sphere - a collection of our social media platforms, and our dedicated website. Our customer base is made up of Millennial parents,  their friends, and their relatives. Overall, we are striving to foster a close relationship with our customer base, by being active members of the online parenting community.

Another significant aspect of our business model takes inspiration from the concept of product life extension, and the circular economy. A key part of our business is taking back used baby goods from our customer base, and either refurbishing them for resale, donating them to charity, or recycling them. We’ve positioned ourselves primarily as an eco-friendly alternative compared to our competition - and our customer base resonates with this. To support this, one of our key activities is the receiving, recycling, and refurbishing of our brand of baby goods. We will also need to foster a  partnership with recycling centers and charities in order to complete these key tasks. In this sense, each rented product is a greener choice compared to our competition. A strong aspect of who we are at Suki, is our commitment to being a leader of sustainability, and an enabler of eco-parenting and sustainable consumerism as a whole.

Marketing Strategy

Suki will rely heavily on independent content creators at the beginning of the service to better reach out to the Suki’s target customer segments and build a relationship with the customer in the community. Customers are expected to have high expectation built up during their research & planning, making the point of purchase an important moment of truth. Once the customer reaches the “point of purchase”, our efforts must ensure that the process is easy to use and understand, while mitigating any pain-points. We also need to provide good support all the way to the end of service; thus, Suki will rely on the social media, online store, and as well as the contentsphere to build the relationship with our customers even after the purchasing. At the end of the service, feedback is gathered, and a continuous relationship is emphasized with our customer base.

Pricing

Thanks to the circular economy strategy, we are able to offer variable price points with a single product in the production line. The rental-to-ownership program, dubbed “Trial by payment” will be offered as a simple credit card installment scheme with the option to cancel at any point. The reversed teaser rate structure will incentivize the customers to stick with paying through the six-month period, further maximizing our products’ revenue potential. We will also offer a “Like new” option - products that have been re-shelved due to a customer returning their product within short period of purchase that is otherwise brand new. It is not customizable and the price may fluctuate as it has to be adjusted based on state of the inventory and the market. 

Finance And Projection

The company will be based in South Carolina to benefit from the generous corporate and sales tax rate. Part of our strategy entails selling re-shelved and used products to extend their life, and sales tax is not applied in South Carolina for said products, which makes our offering more attractive to budget-sensitive buyers.

We project that with proper marketing, we should be able to clear 10,000 units sold in the first year of operation, and expect sales figure to climb from there on. By end of fiscal year two, Suki should be able to turn a profit and financially stabilize. There are also additional revenue stream opportunities once we reach a big enough customer base whose usage data we can monetize.

Measuring Success

Our target segments’ receptiveness to our brand identity is the foundation of our strategy. Hence, we must be able to measure the success of our sustainability initiative and communications. Once the communication is received, the results of these factors will be validated through audiences’ reaction in social media avenues, and finally through sales.

The following graphics list some of the Key Performance Indicators that help meter our success in these grounds and mocks up a dashboard that would keep the information updated for easy viewing.

Most KPIs, including the sales figures and revenue can be identified from analytics collected from our website and social media presence. They are readily available and can be collected on-demand. On the other hand, Material repurposing, Innovation roadmap and review figures have to be collected and updated manually, but the process itself is not overly complicated.