Project Everest

Experiment Results

[Experiment Results]: Channels - Pick Up vs Delivery - Fuel I Timor-Leste July 2019

by
RickM
+1
Submitted by
RickM | 3 months ago | in Sustainable Fuel Consulting - Timor-Leste

Experiment Design Post: https://projecteverest.crowdicity.com/post/1013430

Lean Phase: Channels

Assumption: That an equally significant portion of paying customers prefer to collect the stove themselves from a predetermined location as pay an additional amount to have the product delivered directly to them. Both pick-up and delivery channels are worth utilising.

Results: 

The success points for this experiment were:

  • Green light: Of customers that express a preference for pick-up or delivery, at least 40% of customers prefer pick-up AND at least 40% prefer delivery.
  • Red light: If less than 20% of paying customers opt for one of the options.

We collected survey data from 50 individuals within our customer segment in the Dili, Dare and Hera regions in order to gauge customer attitudes towards pick up versus delivery. In response to the question “Do you prefer to have items delivered to you, or do you prefer to pick them up?”, 19 of the 40 people who answered responded with store pick up, 16 responded with delivery, and 5 did not nominate a preference. That is to say, 54% of people who indicated a preference (or 48% of people who responded) prefer to pick up the item in person. This means 46% of people who indicated a preference (or 40% of all respondents) would willingly pay to have the stove delivered. These results indicate a green light on the experiment.

Our data also suggests that when the customer considers their previous habits, and their most common method of collecting items, a significant majority will still have items delivered to their house. The graph below illustrates that of the 40 people who responded to this question, there were 26 (65%) responding that they would pick up items they have purchased from the store, and 12 (30%) responding that they would have them delivered. There are a host of reasons as to why pick up is the most used delivery method, such as whether home delivery is warranted at the time of purchase, the size and weight of the product, the cost of transportation, or whether the store even offers a delivery option. Given the 10% disparity between customer preferences and these historical actions, it is likely as a result of whether the service is offered or not.

In regards to delivery, the price customers would be willing to pay for delivery was also investigated, however only 15 data points were collected. Of the 15 responses, six respondents said they would pay $5 for delivery. This coincides with the price that D&N Movers charges for delivery within metropolitan Dili, suggesting that $5 may be the standard cost of delivery. On the other hand, two responses were recorded for prices of $15 and $20 each with one response for $30. Whether these responses were outliers or were a general trend present in more affluent or remote households will require further analysis and more data points. The remainder of the 15 responses suggested a delivery price of $3 or less.

If we are just to consider customers that indicated they are willing to pay $5 or more for delivery, we find that 31% of people who indicated a preference (28% of total respondents) would be willing to pay the set amount to have the stove delivered. This achieves an orange light. As such, this avenue should continue to be explored but consideration should be given to how the price could be decreased and priority should be placed on developing the pick-up service first.

Validated Learning: 

The results of the survey support the assumption made by the previous team that paying customers almost equally prefer to collect the stove themselves from a predetermined location as have the stove delivered for a set fee.

Having surveyed 50 people, it can be said with reasonable confidence that the results obtained are representative of a broader population. As such, the results being well above the failure point is a clear enough indication that the experiment was successful.

Data was obtained from Dili and two of the surrounding areas, Dare and Hera, to provide a wide pool of data to infer results from. However, due to time constraints and transportation costs, much more data was collected in Dili (34 surveys) than in Dare (9 surveys) and Hera (7 surveys). Consequently, should there exist any trends in the Dili population which differ from those in the Dare and Hera populations, these would have a strong influence on the trends of the overall data i.e. skewing of data. Moreover, as not all questions in the survey were asked to each surveyee, not all questions that were asked were responded to, and that follow up questions divided an already small data pool of 50 into smaller and thus less reliable pools, there is some uncertainty in the data.

It is acknowledged that the object to be delivered was not always clearly explained as a result of the communication barrier, and at times may have been assumed to be larger than the reality. Our data suggests that customers are much more likely to have larger items delivered as opposed to smaller items.

Despite the above errors, it can be said with reasonable confidence that both store pick-up and home delivery are viable options for stove distribution. It is believed that by providing both channels to customers, the accessibility of the stove will increase and thus overall interest in the product and by extension its sales will grow.

Next Move: 

Given that the experiment has passed the green light success point, the further development of a Facebook ordering system and chatbot is appropriate, as is proceeding with the determination of an appropriate location for the collection of stoves and developing partnerships with businesses or individuals willing to offer a delivery service.

Store pick-up is currently available in the form of purchasing a stove outright from a distributor. With regards to payment plans, future teams may want to think about developing a way to integrate the payment plan process with the option of picking up the stove from a store once a certain payment threshold has been met. Should this eventuate, payment plans will need to be organised directly between distributors and customers, as currently distributors purchase stoves from us and then sell them on to customers. This could look like an invoice generated when a customer submits the stove order form, the invoice being confirmed with the distributor with regards to stock availability, and then the customer bringing the invoice to the distributor and proceeding with payments from there. Alternatively, if we are able to find partners who will sell the stove on our behalf rather than purchasing and reselling, we could arrange payments to be made to a business bank account and arrange for pickups to be made in suitable locations upon receipt of payment. More information can be found in the Payment Plans experiment here: https://projecteverest.crowdicity.com/post/2119580.

Whilst in country delivery can be done through PEV members. Whilst PEV is out of country, an exact partnership will need to be developed with D&N Movers, who currently offer delivery to metropolitan Dili for US$5 and to nearby regions such as Hera and Dare for US$7. Alternatively, to allow both payment plans and delivery to happen concurrently, it is recommended an intern from the local universities be hired and trained to act on our behalf collecting both payment plans and delivering stoves as the payment plan threshold is met, as per the above linked Payment Plans experiment.

Tagged users
edited on 29th July 2019, 01:07 by Laura Taylor

Nic Makram 3 months ago

Status label added: Experiment Results

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Nic Makram 3 months ago

Hey Rick, there seems to be a significant amount of overlap between this post and the post regarding home delivery options (https://projecteverest.crowdicity.com/post/2118970). If you could present these in the same results post I think it would aid in the ease of reading. Otherwise the results look good! Please comment on this post once merged and then I can remove the other post.

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