DRF pitch deck

1 DRF Pitch Deck vF BOS

Vision

Pop Shop creates a scalable cross-

marketing channel for online brands and brick & mortar stores of all sizes.

Our vision is to leverage the consumer driven phenomenon of “show-

rooming” to disrupt the traditional

relationship between brands and stores


•Acquiring customers without a physical presence limits brand reach

•Online brands have potential customers that want to see, touch, and feel their products

•Home try-on programs are expensive; Pop-up Shops are difficult to implement; Traditional wholesale presents pricing and margin challenges

•Retail stores need ways to draw new customers to the store

•Buyers are looking for new products but don’t like to take chances

•Stores experience customer “showrooming”, but can’t compete with lower prices online

Brands Retailers

The problem?


Online brands

showroom their products in a network

of stores, enabling fans to see, touch, and feel

their products

Retailers receive new

store traffic, eager to come check out their

favorite brands

Smart matching helps brands and stores

make sure they are getting their money’s

worth

+

$$$

Pop Shop We connect online brands with a plug-and-play

network of stores to showroom their products


The Product

Brands sign up for Pop Shop and get recommendations on best-fit stores for their products in geographies of their choice

Pop Shop creates the merchandising and collateral for the “pop-in” campaign. All the brand

has to do is send over a small amount of inventory for the display.

During and after the campaign, Pop Shop tracks traffic and sales lift in the store and online – creating measurable value for both the brand and the brick and mortar.


Target Customers

Brands Retailers

Builds visibility and

awareness

Start-up seeking

increased

awareness in new

markets

Reaches customers

who need to

touch/feel

Selling tactile goods

where try-on is

barrier to conversion

Gains data and

exposure to bring to

wholesaler

Companies with

limited retail

experience to date

Value proposition

of Pop Shop

Ideal customer

profile

Low-risk revenue

streams

Retailers unable to

afford high inventory

costs

Drives traffic and

incremental sales

Stores with high

seasonality, or

limited organic

growth potential

Easy access to up

and coming brands Limited or

unsophisticated

network of buyers Gives buyers data to

make informed

decisions

Value proposition

of Pop Shop

Ideal customer

profile

Large scale Etsy retailer Independent/regional retailer


Target Market

e-Commerce market*

$25.8B

Addressable market for

Pop Shop

10% 20%

Pop Shop total commission

10% 25%

Total market size $400M $1.3B

Low estimate High estimate

*includes apparel, housewares, health & beauty, toys & hobbies, jewelry, flowers & gifts **estimate based on current % of sales driven from Warby Parker showrooms Source: Internet Retailer Top 500


Why now?

Brick & mortars are recognizing the importance of cultivating multi-channel shoppers and of using up-and-coming brands to drive traffic.

“Checking stuff out in stores, then ordering online is becoming the new way to shop. According to a recent survey from IBM, nearly

half of all online shoppers use this technique. About 34% of them end up buying from an online-only retailer, too, which makes most traditional retailers pull out their hair, says Jill Puleri, vice

president of retail at IBM.” --USA Today, March 2013

Pioneering online only players are recognizing the importance of physical distribution.

Source: “Bonobos opens stores that don’t sell anything” USA Today, March 2013


Competitors

Storefront offers startups a marketplace for short-term retail space by tapping into vacant real estate. • Launched in San Francisco

in Sept. 2012 • 1M+ sq. ft. listed • 200 inbound pop-up shop

requests in one month

DIY Pop-Up

Brands can execute their own pop-up shops by finding flexible leasing or subletting arrangements. • Starting cost of $3000-5000

depending on city • Difficult to measure impact

“This is a real estate model… I still had to do all the work myself.”

--Former storefront customer interested in trying PopShop

“We just hired someone to run our trunk shows and it’s still a logistics nightmare. A plug and play solution would literally be a dream come true.”

--Current PopShop brand


Competitive Advantage

•First mover advantage

-Building out a marketplace is one of the few times there is truly a first mover advantage!

•Pop Shop owns relationships

-Network of stores will be proprietary, and difficult to

circumvent given that bookings will be conducted via Pop Shop platform

-Pop Shop offers security, structure, and plug-and-play use

•Pop Shop owns data

-Proprietary data gathering on success of Pop Shops by brand, by store will allow Pop Shop to make smart

recommendations about where brands can get the most bang for their buck


` Business Model: Brands

Brands gain retail exposure, with better margins than wholesale

1.2x store sales/sq ft

30% 5% Store: 15%

PopShop: 5% Store: 150% of rent cost/sq ft Pop Shop: $10/campaign

This is in

addition to

value of

customer

acquisition

Assumptions

Source: Sales based on Etsy benchamrk of avg. price per item of $15-20; rent cost based on ~$2.54/sq ft rent for storefront Old City location in Philadelphia

Profit if selling wholesale

Profit if selling online


Business Model: Stores Even when space is constrained, stores almost breakeven on

PopShop, without including spillover spend + PR

Sales = 8x rent/ sq ft

50% of sales

15% of sales

150% of cost

$100/yr

Assumptions

Made up with ~13%

spillover spend in

store, not including

PR and awareness

benefits


Business Model

Pop Shop Philadelphia 15 cities 100 cities

Revenues # of brands 50 5,000 15,000 # of stores 17 5,000 50,000 # of campaigns/yr 100 30,000 300,000

Commission/campaign/month $24.38 $24.38 $24.38 avg. months per campaign 2.0 2.0 2.0 # of campaigns/year 2.0 6.0 20.0

Commission revenue/yr $4,875 $1,462,524 $14,625,239

Fixed fee/campaign $10.00 $10.00 $10.00 Fixed fee revenue/year $1,000 $300,000 $3,000,000

Store annual fee $100 $100 $100 Store annual fee/yr $1,667 $500,000 $5,000,000

Store onboarding fee $250 $250 $250 Store onboarding fee/year $4,167 $1,245,833 $11,250,000 Total Revenue/yr $11,708 $3,508,357 $33,875,239

Costs Merchandising costs/campaign $20.00 $15.00 $10.00 # of campaigns per year 100 30,000 300,000

Merchandising costs/year $2,000 $450,000 $3,000,000

Stores per Acct. Mgr Merchandiser 30 50 75 Salary per Acct Mgr Merchandiser $40,000 $30,000 $30,000

Total Merchandising costs/yr $66,667 $3,000,000 $6,000,000

Logistics per campaign $20 $10 $5 Total Logistics cost/yr $2,000 $300,000 $1,500,000

Total Costs $70,667 $3,750,000 $10,500,000

Operating Income ($58,958) ($241,643) $23,375,239


Where We’re At

Milestone # Milestone Timeframe

1 Pilot campaign in Philadelphia Apr 5th

2 Revise model, launch 2nd pilot as needed

May – June

3 Incorporation & Fundraising May – Aug

4 Develop platform June – Aug

5 Hire sales & marketing June – Aug

6 Launch in 5 cities December

7 2-3 partnerships with large e-commerce brands

June 2014

To date we have: • Won pitch competition, received funding for April pilots • Signed up 8 online only brands • Signed up 6 stores • In talks with 1 regional chain – 19 locations • Brought on a seasoned entrepreneur as an advisor


Team

Relevant Experience/Info: 3 years at Endeavor; worked with 300 start-ups in 10 countries; branding & marketing intern at 3 consumer-facing tech start-ups during Wharton

Not Relevant Experience/Info: Ravens super fan; Scuba Diver; Happy Hour enthusiast; sometimes gets mistaken for Shannon

Relevant Experience/Info: 3 years consulting at Bain; worked in loyalty program marketing at Starwood Hotels; interned at Facebook ad sales

Not Relevant Experience/Info: Walks with purpose; die-hard fan of “Ru Paul’s Drag Race”; sometimes gets mistaken for Alli

Alli Berliner

Shannon Pierce


Why We Need DRF

Bill Gurley’s (@Benchmark) 10 Marketplace Success Factors

Enhancing rather than aggregating a market ✔

Enhancing economic advantages for both sides ✔

Opportunity for Technology to Add Value ✔

High Fragmentation ✔

Low Friction of Supplier Sign-up ?

Size of the Market Opportunity ✔

Potential to Expand the Market ✔

High Frequency of Transaction ?

Integration in Payment Flow ?

Positive Network Effects ✔

7/10 is the threshold for a compelling idea – now we need to understand our suppliers more deeply.


Thank you!

For more information about Pop Shop please contact:

Allison Berliner:

[email protected]

Shannon Pierce: [email protected]

mailto:[email protected]

mailto:[email protected]

DRF pitch deck

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