This teaching note provides an overview of the case study "Bumbox: Choosing

a Business Model for a Start-Up." The case focuses on Bumbox Logistics, a

start-up that offers smart lockers for parcel deliveries in Singapore. The CEO,
Ron Wong, is considering strategies to expand the company's network of
lockers and increase adoption among online shoppers. The teaching note
includes learning objectives, relevant readings, assignment questions, and a
suggested teaching plan. The case is suitable for undergraduate-level courses
on marketing, entrepreneurship, logistics, and strategy.

Describe the e-commerce and logistics business environment in

Singapore.

The e-commerce and logistics business environment in Singapore is

characterized by several factors. Firstly, Singapore has a high demand for
online shopping, with e-commerce revenue estimated at US$4.4 billion in
2017 and projected growth of 20-30% until 2020 [1]. This healthy demand for
online shopping drives the need for efficient logistics services.

Secondly, Singaporean consumers have a preference for both online and

offline shopping. However, due to cultural reasons and the high costs of real
estate, many Singaporean young adults live with their parents until a much
older age compared to other countries. This lack of privacy creates a need for
smart lockers, which allow consumers to shop without family members being
aware of their purchases [1].

Additionally, Singapore is characterized by road congestion and expensive

parking, especially in high-rise buildings where many homes are located. This
poses challenges for traditional delivery methods, as delivery vehicles often
need to park at car parks located a few blocks away. Delivering multiple
parcels to one smart locker location is more efficient and reduces driving
distances, leading to lower fuel costs and fewer parking fees or fines [1].

Overall, the e-commerce and logistics business environment in Singapore is

driven by high demand for online shopping, the need for privacy in shopping,
and the challenges posed by road congestion and expensive parking.
[1] "BUMBOX: CHOOSING A BUSINESS MODEL FOR A START-UP" Teaching
Note, Ivey Business School, 2020

Evaluate the attractiveness of the smart locker business in Singapore?

The smart locker business in Singapore can be considered attractive due to

several factors. Firstly, Singapore has a high percentage of dual-income
couples, with 65.5% of all couples falling into this category. This means that
there is often no one at home to receive deliveries, leading to a high
prevalence of failed deliveries. Smart lockers provide a convenient solution for
consumers to collect their parcels at a time that is convenient for them,
avoiding missed deliveries [3].

Secondly, Singaporean consumers have a preference for both online and

offline shopping. The e-commerce revenue in Singapore was estimated at
US$4.4 billion in 2017, with projected growth of 20-30% until 2020. This high
demand for online shopping generates a corresponding demand for efficient
logistics services, including smart lockers [1].

Furthermore, Singapore is characterized by road congestion and expensive

parking, particularly in high-rise buildings where many homes are located. This
poses challenges for traditional delivery methods, as delivery vehicles often
need to park at car parks located a few blocks away. Delivering multiple
parcels to one smart locker location is more efficient and reduces driving
distances, leading to lower fuel costs and fewer parking fees or fines [1].

However, it is important to note that the smart locker business in Singapore

also faces competition, particularly from SingPost, which has a larger network
of smart lockers. SingPost, being the national postal service, has the authority
to determine whether a smart locker address is a valid delivery address, which
presents a significant hurdle for other players in the market [2].

In conclusion, the smart locker business in Singapore is attractive due to the

high demand for online shopping, the need for convenient delivery options
for dual-income households, and the challenges posed by road congestion
and expensive parking. However, competition from established players like
SingPost should be taken into consideration when evaluating the
attractiveness of the market [1][2][3].

Analyze Boombox’s ability to meet market conditions.

Bumbox's ability to meet market conditions in Singapore can be analyzed

based on several factors.

Firstly, Bumbox's focus on locating its smart lockers on the property of tertiary
educational institutions indicates an understanding of the target market. This
strategy allows Bumbox to target students who may have a higher demand for
online shopping and a need for convenient delivery options [1].

Secondly, Bumbox's recognition of the challenges posed by road congestion

and expensive parking in Singapore demonstrates an awareness of the market
conditions. By delivering multiple parcels to one smart locker location,
Bumbox can provide a more efficient and cost-effective solution for both
consumers and delivery drivers [1].

However, Bumbox's ability to meet market conditions may be limited by

several factors. Firstly, the competition from established players like SingPost,
which has a larger network of smart lockers, poses a challenge for Bumbox.
SingPost's authority to determine valid delivery addresses gives them an
advantage in the market [2].

Additionally, Bumbox's small network of smart lockers may limit its ability to
reach a wider customer base. B2C marketing requires reaching an entire
demographic, which requires significant resources. Bumbox needs to invest in
educating consumers about smart lockers, but there is a risk that SingPost
may benefit more from these efforts due to its wider network [3].

In conclusion, while Bumbox demonstrates an understanding of the target

market and the challenges posed by market conditions in Singapore, its ability
to meet these conditions may be limited by competition from established
players and the need to expand its network of smart lockers [1][2][3].

If online shoppers decided on delivery method, how could Bumbox

increase their adoption of its services?
To increase online shoppers' adoption of Bumbox's services, the company can
implement several strategies:

1. Build awareness and educate consumers: Since smart lockers were still in
their introductory phase in Singapore, Bumbox needs to invest in
building awareness of the benefits of using their lockers. This can be
done through targeted marketing campaigns, social media engagement,
and partnerships with e-tailers to promote the convenience and control
over delivery timings that smart lockers offer [1].
2. Highlight convenience and control: Bumbox should emphasize the
convenience and control that smart lockers provide to online shoppers.
This includes the ability to pick up parcels at a time convenient to them,
avoiding missed deliveries, and the option to return goods at Bumbox
locations, which enhances the overall shopping experience [1].
3. Collaborate with e-tailers: Bumbox can work closely with e-tailers to
integrate their services seamlessly into the online shopping experience.
This can involve offering free returns if consumers drop off the returned
goods at Bumbox locations, making Bumbox lockers the go-to place for
shoppers to "touch and feel" products before deciding to keep or return
them [1].
4. Implement a loyalty program: Bumbox can introduce a tiered loyalty
system to incentivize consumers to use their lockers more frequently.
This can include rewards such as free returns, exclusive discounts, or
priority access to lockers. By offering additional value to frequent users,
Bumbox can encourage online shoppers to choose their services over
other delivery methods [1].
5. Enable easy specification of Bumbox locations: Bumbox should work on
reducing dependence on e-tailers by allowing consumers to easily
specify a Bumbox location as a delivery address, even when the e-tailer
does not offer the option of delivery to a Bumbox location. This would
provide more flexibility and convenience for online shoppers, increasing
the likelihood of them choosing Bumbox for their deliveries [1].

By implementing these strategies, Bumbox can increase online shoppers'

awareness and adoption of its services, positioning itself as a convenient and
reliable delivery option in Singapore's e-commerce market [1].
Analyze the customer value created by Bumbox. Is the value high for
each of the three potential customer segments? Suggest how Bumbox
could persuade each segment of its value.

The customer value created by Bumbox can be analyzed for each of the three
potential customer segments: logistics companies, online shoppers, and e-
tailers.

1. Logistics Companies: The value created for logistics companies lies in

the increased efficiency and cost-effectiveness of their delivery
operations. By delivering multiple parcels to one smart locker location,
logistics companies can reduce driving distances, lower fuel costs, and
minimize parking fees or fines [1]. Bumbox can persuade logistics
companies by highlighting these benefits and demonstrating how their
smart locker solution can streamline their operations, improve customer
satisfaction, and reduce costs.

2. Online Shoppers: For online shoppers, the value created by Bumbox is

convenience and control over their deliveries. Smart lockers allow
shoppers to pick up their parcels at a time and location that is
convenient for them, avoiding missed deliveries and the need to wait at
home for packages [1]. Bumbox can persuade online shoppers by
emphasizing the flexibility and convenience of their smart locker
solution, promoting features such as 24/7 accessibility, secure storage,
and easy returns. They can also collaborate with e-tailers to integrate
their services seamlessly into the online shopping experience, offering
incentives such as free returns or exclusive discounts for using Bumbox
lockers [1].

3. E-tailers: For e-tailers, the value created by Bumbox lies in enhancing the
overall customer experience and reducing the burden of managing
deliveries. By partnering with Bumbox, e-tailers can offer their customers
a convenient and reliable delivery option, improving customer
satisfaction and loyalty. Bumbox can persuade e-tailers by showcasing
the benefits of their smart locker solution, such as reducing failed
deliveries, providing a physical touchpoint for customers to interact with
 products before deciding to keep or return them, and offering a
seamless returns process [1].

In conclusion, Bumbox creates value for logistics companies through increased

efficiency, for online shoppers through convenience and control, and for e-
tailers through an enhanced customer experience. To persuade each segment
of its value, Bumbox should highlight the specific benefits that are relevant to
each segment and demonstrate how their smart locker solution can address
their pain points and improve their operations or customer experience [1].

Which target segment would you recommend Wong focus on?

Based on the analysis provided in the case, it is recommended that Wong

focuses on targeting e-tailers as the primary customer segment for Bumbox.
This recommendation is supported by the following factors:

1. Market Focus: Bumbox's strategy of locating smart lockers on the

property of tertiary educational institutions primarily targets students.
However, the KPMG Global Online Consumer Report indicates that baby
boomers shop online as frequently as millennials and have higher
average transaction amounts [4]. Therefore, to scale the business and
reach a wider customer base, Bumbox needs to expand its network of
lockers to be accessible and convenient for older consumers as well.

2. Cost-Effective Awareness Building: Focusing on a few large e-tailers

would allow Bumbox to more cost-effectively build awareness among
their shoppers. By partnering with e-tailers, Bumbox can educate
consumers about its services and address any concerns about
integration [4]. This approach aligns with the rational and return-on-
investment value that Bumbox's services provide for businesses [4].

3. Fragmented E-commerce Industry: The e-commerce industry is highly

fragmented, with many independent e-tailers. Reaching these e-tailers
can be challenging, making it almost as difficult as a business-to-
consumer (B2C) effort [4]. Therefore, targeting e-tailers with larger
customer bases would allow Bumbox to reach a wider audience and
potentially achieve greater market penetration.
In conclusion, focusing on e-tailers as the primary customer segment would
enable Bumbox to cost-effectively build awareness, leverage the rational
appeal of their services, and reach a larger customer base in the fragmented
e-commerce industry [4].