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CORE 77 - SERVICE DESIGN
Team Avocado | March 18, 2014
Katie Kowaloff, Adam Panza, Drew Raines, Paul Sheetz
IDEAL DINNER
REALITY
“I stand in front of the fridge. Open
the door, look. And there’s nothing
I want to eat...I’m looking for the
fridge to tell me what to eat. But
the food I have doesn’t fit my
eating mood.” (Melissa)
Why is it still so difficult to get
the ingredients we need to make
the dinner we want—right when
we want it?
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 3
Competitive landscape
HIGH CONTROL
(of ingredients & prep)
GROCERY STORE
?
“I don’t like shopping on Sunday because
it’s so freakin’ packed. But we almost
inevitably end up shopping on Sunday
because the rest of the week is so busy.”
-Jim
PLANNED
IMPROMPTU
GROCERY DELIVERY
& DINNER KIT
TAKE OUT
“It’s so prepacked, you don’t even have to
measure anything...I’m so worried about
following the recipe, I forget to do the extra
things I know I like—like adding ginger.”
-Jack
“Cooking at home feels better. I
have more say in what I’m eating.”
-James
LOW CONTROL
(of ingredients & prep)
How might we connect people to
great quality ingredients where
and when they need—keep people
in control, but still make it easy
and inspirational?
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 5
The Merchant
and Muse is your
neighborhood
market on wheels.
We carry a curated
set of high-quality
ingredients—the
essentials to cook an
easy, awesome dinner.
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 6
Who we are
EVERYDAY, WE HAVE NEW INGREDIENTS
& IDEAS TO INSPIRE
(Cause sometimes it’s easy to fall into a food rut.)
AT&T
AT&T
AT&T
ROASTED FREE-RANGE CHICKEN
GRASS-FED LAMB CHOPS
HANDMADE SOBA NOODLE STIR FRY
with organic brussel sprouts & potatoes
with Iron Creek acorn squash
with organic mushrooms & tofu
Where we’ll be
FIND OUT WHERE WE’LL BE,
4PM-10PM DAILY
AT&T
4pm - 7pm
7:15pm - 10pm
Essentials of the experience
CURATED
QUALITY
THOUGHTFUL
CONVENIENCE
INSPIRATION,
NOT INSTRUCTION
Curated set of ingredients,
organized by meat, grain
and produce
Portioned quantities,
perfect for dinner tonight
Daily dinner ideas to inspire
and push your palette
A helping hand with light
ingredient prep
(e.g. pre-snipped veggies,
pre-marinated meat)
Friendly guidance from
merchants, eager to answer
your questions
Emphasis on quality and
local, including partnerships
with neighboring farmers
and foodies
Select cooking essentials
(like oils and vinegars) to
complete your kitchen
Free spices for all
Easy, round number pricing
for quick payment; option for
house accounts
Recipe cards with daily
dinner ideas (at the truck
and online)
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 9
Evening extensions
AT HOME, CHECK OUT RECIPES &
SHARE PHOTOS OF YOUR TRIUMPHS
(If your photo rocks, we’ll
feature it on the truck—and
you’ll get a tasty gift card.)
AT&T
ROASTED FREE-RANGE CHICKEN
with organic brussel sprouts & potatoes
[INGREDIENTS]
2 bone-in, skin-on chicken thighs
1/2 pound Brussel sprouts, trimmed
1/2 pound Yukon gold potatoes
1/2 tablespoon unsalted butter
1 tablespoons Dijon mustard
1 sprig fresh rosemary, chopped
1 lemon, thinly sliced
2 tablespoons olive oil
40
MIN
[INSTRUCTIONS]
1. Heat oven to 425° F, with the racks in the upper and
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 10
From a (m)user’s perspective,
The Merchant and Muse allows
for inspired, impromptu cooking.
From a business perspective,
the opportunity is huge.
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 11
Business model
PEOPLE PAY MORE FOR CONVENIENCE;
THE MERCHANT & MUSE IS HYPER CONVENIENT
Dominic’s: $0.62
Walgreen’s: $0.87
Merchant: $1.00
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 12
Business model
FROM A SINGLE TOMATO TO YEARLY SALES,
OUR PROFITS GROW
100%
markup on our tomato
- Convenience of a corner store
- Quality of a farmer’s market
- 100% markup on proteins,
grains and veggies
- 200% markup on cook’s corner
$6.38
gross profit per ticket
- 20 people/hr (avg)
- $12 ticket/person (avg)
- 52% margin (avg)
- 6 hrs/day, Mon-Fri
- 8 hrs/day, Sat + Sun
$55,214
operating profit per truck/year
- Trucks, website depreciated over
10 years
- Operating expenses include wages,
warehouse rent, marketing, food and
spoilage costs
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 13
Business model
...AND GROW, WITH LOTS OF
POTENTIAL FOR EXTENSIONS
$165,641
net annual income
- 3 trucks
- 9% profit margin
- Includes non-cash expenses
(depreciation/amortization);
does not include taxes
<2 years
break-even point
- Opportunity to reinvest
- Based on a $500,000
initial cash investment
$150,000
in additional annual revenue
- Prime memberships (bike delivery)
- $45,000 net after wages
- Not including expected business growth
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 14
A different routine.
A different business model.
The Merchant & Muse.
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 15
Appendix
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 16
SERVICE BLUEPRINT
PRE-TRUCK
USER
EXPERIENCE
CHANNEL
Track truck
(expert user)
See times and
location near
you on map
Get inspired
Learn about
food on truck
today
AT TRUCK
Participate
Give input
on new truck
locations
See images
and ideas for
dinner tonight
Browse food
Discover truck
(new user)
Greeted by
name (expert
user)
POST TRUCK
Select food
Chat about
food/ask
questions
Sample/pick
up free spices
App
Truck
Website
Truck signage
Truck worker
Social media (Twitter, Facebook, Foursquare, Insta)
Packaging
Recipe cards
(online) Show
map times and
location
(online) Show
inspiration
ideas for
dinner
Exit
Provide
feedback
Pay with cash
Sign up for
membership
Establish
truck
locations
(See rollout
& launch
campaign)
Determine
food ‘menu’
for truck
Create
database of
recipes and
images
Create recipe
photo for day
OUTSIDE
PARTNERS
Truck
location
contacts
City of
Chicago
(for permitting
and licensing)
Food
suppliers
High-end food
purveyors
Farmers/
growers
Cook & eat
Reference
recipes and
inspiration
Photograph
food and
share for a
chance to win
gift card and
have photo
featured as
inspiration on
truck
Participate
Give feedback
on experience
Request/
suggest new
food for truck
App
Peg board/
suggestion box
Website
Recipe cards
iPad/Square
Social media
Square reader
Provide
platform for
user input on
locations
Greet customer
Answer
customer
question
Suggest
ingredients,
inspire
Assist with
purchase
Check out
customer
Give out recipe
cards
SERVICE
BACK OF
HOUSE
Travel home
Get inspired
by daily ideas
Daily email/newsletter
SERVICE
FRONT OF
HOUSE
Buy food
Pay with credit
card
Aggregate
feedback for
new test truck
locations
Transport and
layout food
Create daily
recipe cards
(See rollout
& launch
campaign)
Occasional featured
partnerships with farmers
and foodies
Record data
(for learning
and adapting
inventory,
stock and user
preferences)
Provide
platform for
feedback at
truck
(online) Show
inspiration
ideas with
simple recipes
Explain
membership
Supply recipe
cards at truck
(See prime
membership
overview)
(per previous)
Provide
platform for
photo sharing
Select and
notify ‘winner’
to be featured
on truck
Review photos
regularly
Integrate user
photos into
image/recipe
database
Provide
platform for
feedback and
input online
Collect
feedback data
and update
inventory
and user
experience
accordingly
Square
Establish partnerships
Integrate inventory into truck
process
Private land
owners
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 17
Supply chain
WHERE OUR FOOD COMES FROM
Purveyors
Central warehouse
(for portioning and packaging)
Local growers
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 18
Wireframes
Home Page
Home Page
MOBILE EXPERIENCE
http://themerchantandmuse.com
http://themerchantandmuse.com
Login / Register
My account area
Primary Navigation
Main website areas as static
links
Interactive Map
Interactive Map
Responsive Navigation
Reformatting of the
header navigation
based on screen size
Image Carousel
Selection of images and
information to inform readers about
the concept and how it works
Scroll Content
Re-sized and positioned
content based on mobile
platform
Represents where the Merchant
and Muse trucks currently are
located
http://themerchantandmuse.com
http://themerchantandmuse.com
Responsive Navigation
Primary Navigation
Main website areas as static
links
Represents where the Merchant
and Muse trucks currently are
located
Reformatting of the
header navigation
based on screen size
Login / Register
My account area
Image Carousel
Selection of images and
information to inform readers about
the concept and how it works
Scroll Content
Re-sized and positioned
content based on mobile
platform
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 19
Big picture planning
ROADMAP
PILOT(S)
A 3 month pilot will allow
us to test hypotheses and
determine the feasibility
of the concept as a whole,
and of specific details
within it
Once established, it’s time
to consider reinvesting in
additional trucks and exploring
other revenue channels
LAUNCH
3 TRUCKS
ADD TRUCKS
AND EXPLORE
EXTENSIONS
The Merchant & Muse is a
scalable operation. Three
trucks provide the greatest
balance of investment risk
and return
EXPAND TO
OTHER CITIES
After a successful
operation in Chicago, it’s
time to expand to other
cities, strengthening our
relationship with suppliers
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 20
Rollout & launch plan
SELECTING TRUCK LOCATIONS (AN EARLY PLAN)
Identify prime locations
with census data
Launch guerrilla chalk
campaign in key hoods
Key location criteria include
- high density neighborhoods
- high income households
- non-family households
Gain user input on truck
locations in key neighborhoods
through chalk/social media
campaigns
Launch roaming
‘test’ truck
Gauge demand more precisely
with a flexible test truck before
committing to a stable route
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 21
Behind the business model
ESTIMATING DEMAND THROUGH
BENCHMARCKING OF SIMILAR SERVICES
Boutique Local Grocer
Chicago Food Truck
The Merchant & Muse
Valued for its high-quality
products and convenience,
customers are willing to pay
a premium at Buckstown’s
Olivia’s
The Fat Shallot rolls into
busy public areas, offering
sophisticated takes on deli
favorites. Customers line up,
even in the cold
We’re a neighborhood market on
wheels, carrying a curated set of
high-quality ingredients—everything
you need to make an easy, awesome
dinner tonight
Observed Peak
90 customers/hour
Observed Peak
65 customers/hour
Expected Peak
30 customers/hour (conservative)
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 22
INCOME STATEMENT
Income Statement
Merchant & Muse
Year 1
Q1
Q2
Q3
Q4
Year 1
Food Sales
COGS
440,068
211,154
440,068
211,154
440,068
211,154
440,068
211,154
1,760,273
844,615
Gross Profit
Gross Margin
228,914
52.02%
228,914
52.02%
228,914
52.02%
228,914
52.02%
915,658
52.02%
37,262
47,003
105,120
9,000
5,625
37,262
22,003
105,120
9,000
5,625
37,262
22,003
105,120
9,000
5,625
37,262
22,003
105,120
9,000
5,625
149,050
113,014
420,480
36,000
22,500
7,508
875
150
212,544
7,508
875
150
187,544
7,508
875
150
187,544
7,508
875
150
187,544
30,033
3,500
600
775,176
16,370
3.72%
41,370
9.40%
41,370
9.40%
41,370
9.40%
140,481
7.98%
16,370
41,370
41,370
41,370
140,481
Operating Expenses
Food Spoilage
Marketing
Labor Wages
Rent
Truck Depreciation
Truck Upkeep/
Liscense/Insurance
Website / App
Hosting
Total
Operating Profit
Operating Margin
Interest
Taxes
Net Income
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 23
PROFIT PER TICKET
14.00
profit
revenue
cost
12.00
$10.78
$5.39
10.00
8.00
6.00
$4.02
4.00
$1.47
$0.49
$2.35
2.00
$1.37
0.00
average food
retail ticket
COGS
SG&A
primary
profit
extras
extras
COGS
total
profit
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 24
Process overview
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 25
PRIMARY
RESEARCH
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 26
CONCEPTING &
POSITIONING
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 27
SERVICE SCENARIO
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 28
EXPERIENCE PROTOTYPE 01
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 29
EXPERIENCE PROTOTYPE 02
The Merchant & Muse | December 4, 2013 | Adam, Drew, Katie, Paul| Page 30