Executive summary of customer interview

·      Research objective

The interviews were conducted to understand the unforeseen customer need in order to improve the business model of Arteixo.

·      Data collection

Face-to-face interview (n= 106) and self-administrative online survey (n=49) were carried out from Nov 7, 2013 to Nov 10, 2013 at different locations in Madrid (i.e., university, main square, shopping mall) by seven interviewers. In total, 155 people provided their opinion.

While analyzing the input data, the main customer segments became clear that were worth to pay more attention compared to other groups. Therefore a detailed analysis will be presented regarding the main segments in the second section of findings, to capture the key insights of the primary target market.

·      Findings

o   General information

Among the participants, female represents the majority (74%) as well as the initial target of Arteixo. Young people aged from 16 to 24 were the most common in terms of age groups followed by the people aged between 25 and 34, 67% and 25% respectively. As the application aims to start in Madrid (Spain), Spanish respondents accounted for more than half.

When the interviewees were asked, around 80% of respondents were willing to have a virtual closet provided by Arteixo. The answer further provides an interesting figure in the following, which illustrates the main customer age segments of Arteixo. Age group 16-24 and 25-34 show the most positive response to the product with having slightly different behaviors.

o   Customer segments

§  Coco (Female 16 – 24, n=81)

The first main customer segment was internally named as Coco, which is a young group of female aged between 16 and 24. Around 85% of girls showed interest in the virtual closet. Most of the people were university students who like to use the virtual closet to save time (58%) when choosing outfit while have fun (46%). The most usage for this group was making combinations (82%).

In terms of social media usage, Coco uses Facebook the most, followed by Twitter and Instagram. This group showed the highest interest in social function such as “liking” or commenting. In addition, 55% of the respondents were willing to pay for extending the closet and 28% of people positively reacted to additional cost to receive the professional advices.

§  Marilin (Female 25 – 34, n=24)

The second group is called Marilin, female group aged from 25 to 34. Just below 95% people said they would like to have their own virtual closet. When it comes to the most interesting feature of Arteixo, time saving was in the first place (53%). This group showed a particular interest in receiving professional advises compared to other customer segments, which could be used for up-selling to generate more profit.

Facebook accounted for the majority of social media usage followed by Instagram and Twitter. A big part of this group (40%) wishes to use the “sharing” function of Arteixo to interact within their social circle. Marilin showed the highest profitability considering their willingness to pay for extra feature, such as extending the closet or advises from professionals, 76% and 57% respectively.

§  Hugo (Male 16 – 34, n=38)

The third customer segment is named as Hugo, which represents a male group aged between 16 and 34. Three out of every five people showed an interest in the application. Timesaving and receiving professional advises were equally ranked for the most interesting feature for them (43% each). This group focused on the practical use of the application such as making combinations rather than social function including “liking” or commenting on other’s outfits.

Around 60% of the group uses Facebook for main online social interaction channel, followed by Twitter (36%). Instagram accounted for the third most used social media (31%), but the usage was considerably lower than other segments. When it comes to the extra cost, this group showed the least interest. Around one-third of people are willing to pay to extend their closet and 26% of the respondents consider paying for advises from fashion experts.

o Concerns of potential customers

During the face-to-face and online surveys, the people’s main concerns after learning the idea were almost the same. General answer can be grouped in five categories:

1)Privacy

2)My combinations might be copied

3)It may cause problems between people

4)User-friendliness

Moreover, most of the people answered that they don't have any concerns as they thought it will have the similar privacy options of Facebook. The one’s who answered that their main concern is privacy also added they would like to have privacy options and would like to choose who can see their combinations, who can see their closet etc. In this point of view, as our products’ privacy will be optional. First two concerns such as ‘Privacy’ and ‘My combinations might be copied’  are going to be solved for all users

By considering the ‘It may cause problems between people’ is an important issue, but in this point, users should arrange their privacy options and block people who could cause problems.

Last concerns is one of the most important for us, because application must be easy to learn and use in order to take the attention of our potential customers. Who would like to use an extremely difficult application for their daily life? What do they suggest to us? What do they want us to consider?

When we asked what more would you like to have in our application, we got interesting answers such as:

1)Follow famous people's combinations, their outfits or weekly advises

2)Link to fashion magazines and blogs

3)Automatic suggestions from application of our clothes that users can save if they like

4)Seeing some brands creations such as zara, mango etc.

5)It would be good if we can ask others 'where did you buy this t-shirt, shirt etc.’

When we asked what should we consider while defining the application, they gave us important points to think such as:

1)Wearing and combination is not the same thing

2)Photo quality is important if it is bad, application is meaningless.

3)It should be easy to upload photo or use the app, if not it would be time consuming.

4)Doing same combinations with other people might be a problem.

·      Conclusion

The interview revealed many interesting customer insights that were unforeseen before going out of the building. It developed three customer segments (Coco, Marilin and Hugo) and differentiated them to target in an effective manner. The understanding of target customers acquired through the interviews will bring a significant benefit to improve business model canvas by providing the best interest for customers, that will ultimately benefit Arteixo.