r2s biz 0703
DESCRIPTION
runway2street business plan and deckTRANSCRIPT
a curated platform enabling luxury brands reach their ideal customer worldwide
www.runway2street.com
Atelier to Closet
30+ million
Women
1000s of
Independent &
Emerging Luxury
Fashion Brands
Anywhere to Anywhere ShippingGlobal Customs Handling
Mobile Platform
Hand Picked High QualitySlow Fashion
150 countries
worldwide
150 countries
worldwide
1. IT costs and technology
2. Reduced margins
3. Marketing costs
4. International expansion
5. Brand Dilution
6. Forecasting
Problem for brands
1. International selection
2. Discovery of exciting emerging brands
3. Curation
4. Personalization
5. Quality & Authenticity
6. Value & Transparency
Problem for consumers
R2S Solution
Boutique Storytelling
Curated community
International Supply chain/logistics
Cutting edge mobile ready platform
Self serveBrand tools
Retail Analytics
Transparency & Value
30+ million
Women
150 countries
worldwide
1000s of
Independent &
Emerging Luxury
Fashion Brands
150 countries
worldwide
Market Opportunity & Business Model
20MTarget
Customers
CurrentAvg. Order Value
$400
Sales1 sale/yr.(typical retailer -4/yr.)
$8B $300B
*Assuming reach of 20M out of 30M addressable market (Polyvore has 20M, Lyst has 10M)*R2S makes 25% commission/sale (Potential to increase to 35%) on retail opportunity (above).
*Luxury industry was 300B in 2013, growing at 13% in US and 30% emerging.
Unique Users X Conv. rate X Avg. Order Value X Commission% = Revenue
Additional opportunities
BEAUTY & SKINCARE
• Expand to emerging/cult beauty and
skincare products. A logical extension to
brand.
• 55B industry
• Acts as a gateway drug – easily afforded
option for a women. Increase customer
reach & engagement.
• Ability to add 10M additional millennial
addressable market. They want to be early
adopters.
Additional opportunities
WHOLESALE/VIRTUAL SHOWROOM
• Extend offering as wholesale marketplace
for R2S brands
• Showrooms take 10% commission/sale
• Leverage supply chain network worldwide.
Results in better discounts with carriers for
shipping and returns.
• Positions R2S a premier site for discovery
of up and coming brands
• Holistic retail analytics
Founding Team
Rathna has combined a love for fashion and online retail with years of experience in technology, advertising, and international logistics to bring runway2street to life. Prior to runway2street, Rathna was the Director of Product Management at Microsoft, where she was responsible for overseeing the Advertiser Marketplace for Bing Ads Business Group. Earlier in her career she held technology leadership positions at UPS, Menlo Worldwide Logistics, and Emery Worldwide. Rathna Sharad,
CEO/Founder
Sherwyn Soff, CTO/Co-Founder
Sherwyn is an entrepreneur at heart with a strong, deep rooted software engineering background and a passion for cutting edge e-commerce technology which helped create runway2street marketplace. Sherwyn founded enQoS, a successful online marketing and technology solution company with global presence.Prior to that he gained vast experience at Microsoft building crucial engineering platforms within online advertising such as Search, Display, Apps and Ad Exchanges.
Advisors/Investors
Tarek Najm, Technical Fellow, MSCEO, Parllay
Michelle GoldbergPartner, Ignition Ventures
Jessica Michaels, Founder, Bread and Butter Digital
Sophia BanksCelebrity/Fashion Stylist
Diane Najm, Founder, PhotoPad/ Angel Investor
Heather Redman, VP Biz Ops, Indix/Angel Investor
Retail Evolution
Brick and Mortar
MallsDept. StoresBoutiques
Online RetailersVertical brands
Marketplaces 1.0Fast
Fashion/Outlets
Specialty Marketplaces
2.0OmniChannel retail
Neighborhood Variety/ ChainsEntertainmentCurated experiences
DistributionScaleAvailabilityLow costConvenience
InternationalCurationCommunityReachAll devicesOnline/Offline play
In house supplier fulfilment
Regional sourcing & distribution centers
Global sourcing&Regional fulfilment
Global sourcing&Global supply chain network
CUSTOMER
RETAILERS
FULFILMENT
Retail Landscape:Fragmented space and no global platform/retailer leader in emerging luxury
Luxury
Established designers
Emerging designers
High street
1. Our products (unique and not found at typical retailers)
2. International logistics & supply chain integration
3. Business model (Atelier to Closet)
4. Worldwide markets (specifically emerging)
5. No inventory and Fulfilment costs
6. Cutting edge Technology platform
7. Self-serve brand tools
8. boutique-style consumer experience
9. Curated fashion community
10.Our team/skillset
Competitive advantage
Customer Acquisition and engagement Plan
Social media Marketing Industry
Partnerships
Influencers
(bloggers &
stylists)
R2S pop-ups
Trunk Shows
PR
Newsletter
Blog
Content
Syndication
Affiliate Networks
SEO/SEM
Promotions
1. Raised angel/bootstrapped with 200K investment.
2. Launched runway2street to US, UK and IN markets in Jan 2014
3. Created community of ~50 brands across 20+ countries
4. Customer Touch Points ~25K across platform, newsletter and social media
5. Press – Tech, Business and Fashion
6. 4X increase in traffic to website
7. 3X increase in conversion rate
8. 35% return visitors
Traction
Financials Forecast
$156.1K $2.3M
$29.3M
$73.2M
$183.0M
$457.4M
$800.9K $2.0M $7.2M$16.6M
$39.2M
$104.2M
$0.0K
$50.0M
$100.0M
$150.0M
$200.0M
$250.0M
$300.0M
$350.0M
$400.0M
$450.0M
$500.0M
FY1 FY2 FY3 FY4 FY5 FY10
R2S Forecast
Revenue Expenses
1. Women’s apparel, accessories, shoes, and jewelry brands
2. $50 - $20,000 retail price
3. Luxury aesthetic
4. Non-mass produced
5. Production cycle and inventory
6. Customer service
7. Terms compliance
Brand Sourcing (Curation)
1. Fine jewelry
2. $1K - $10K
3. One of a kind design with high
quality workmanship
4. Limited quantities and made-to-
order options
5. Able to meet our inventory needs
6. Beautiful packaging and offer
returns even for custom sizes
Xin, London
• Women
• Global customer
• Active in Social media
• 25 - 55 age group
• Fashion savvy
• Conscious consumer
• Travels the world
• Avg. household income > 75K
• Avg. luxury purchase 2-5K/year
• 30M+ worldwide
“They don’t want ordinary, and in fact, ordinary doesn’t sell for me” – Tom Ford
Our Target Customer
What are our customers saying?
“@runway2street I love my new #armcandy”
“@runway2street1 I am loving my first purchase from you! Many more to come!!!”
Seeking 1M in seed round for next 12 months
Terms:
o Convertible note with 20% discount, 4% APR and 3M Cap
Exit Strategy:
o IPO
o Acquisition in 3-4 years
o Etailers: like NetaPorter.com
o Luxury Department stores: like Neiman Marcus, Nordstrom, Barneys
o Publishing Houses: Like Conde Nast, Hearst
o Luxury Conglomerates: Like LVMH
o Online platform: Like Ebay
Offering & Exit Strategy
Use Of Funds
Customer Acquisition&
engagement
Technology, Ops &
Scale
Team
35%25% 40%
Use Of Funds
Scale Technology, operations and cloud services:-Servers -Tech & Data services-Brand acquisition-Editorial & samples-Returns/insurance/shipping-Operations-Finance/accounting
Retain team and hire great additions:-Hire 1 Marketing Lead+ 1 new developer -Customer service and operations support-Existing full-time team of 3 developers, 1 UX designer and 1 content marketer
Brand awareness, grow and engage customers in R2S fashion community:-Social media (Pinterest, Instagram) -Partnerships with Polyvore & Motilo-Affiliate networks-SEO and content creation-Content syndication (Outbrain)-SEM Search and display networks. Adwords.-Direct/email marketing -Influencers like bloggers and stylists (Fashiolista)-PR for magazine/ tradeshows.-Pop-ups & Trunk shows- Promos/refer a friend
TECHNOLOGY, OPS. & SCALE TEAM CUSTOMER ACQUISTION
1. GAP in international retail landscape
2. Unique and diverse team skills
– 25 years combined experience in building scalable technology platforms
– 13 years combined experience in online advertising and marketplaces
– 10 years experience in international supply chain and logistics
3. Great revenue model with no inventory/warehousing costs
Reasons to Invest
Appendix
R2S vs. FarFetch
Atelier to closet (no middlemen)
Curation and storytelling about brand.
100% emerging mid-high end brands
Entire collections featured
Worldwide Supply chain/Fully automated
Mobile ready
Extend to Beauty
Extend to Wholesale
Connecting boutiques to consumers (3 degrees of separation from brand)
No curation. Boutiques handle that.
Primarily established brands – with 30% emerging mix
Limited styles for each brand similar to traditional retailers
Worldwide Supply chain
Launching mobile App. End of year.
Boutique model does not support beauty
Boutique model does not support wholesale
Customer acquisition tactics
Tactic Outcome Metrics/Spend
SEM (Search + Display) using Adwords Customer acquisition (30%) <$1 CPC, Conv. Rate 0.3%
Influencer Partnerships: Fashiolista, TheBloggerNetwork
Build fashion communityCustomer acquisition (20%)Brand awareness (4M potential customers, 2.5Knew reg. customers)
$2.4 CAC for registered users, $7000/mo.
Affiliate marketing – PepperJam (Ebay), ShopStyle, RewardStyle and ShareASale
Customer acquisition (8%) 8% order value
Social --custom audience on FB--Polyvore product feed/shop
Customer acquisition (30%)And brand awareness (20M+ potential on Polyvore)
<$1 CPC, conversion rate 0.3% $0.40 CPC, conversion rate 0.5%
PR (online Fashion, Beauty, Lifestyle & celebrity)Promotions (coupons)
Brand awareness and engagement (8%) $5K/mo. For contests, gifting, PR $2K/mo. Promo codes for all channels
SEO and organic- Blog and content creation- Traffic from designers/brand partners
Customer acquisition (4%)Brand awareness and engagement
NA
Remarketing and direct marketing- Popup/trunk shows- Email- Retargeting using Adroll
Build fashion communityBrand awareness and increase engagement
7K/mo for trunk shows (increase conversion rate to 1%) $100/mo. Email (open rate 12%, click rate 1.5%)