Shifting from B2B to B2C
Overview
I was presented with a challenge by Papelmania, a popular Arts and Crafts brand in Peru. Despite their success during the pandemic, they noticed a decline in profits as things started going back to normal. The company had a small niche market of around 20,000 DIY stationery users and needed to find a way to sustain their operations and grow their customer base.
Challenge
Papelmania had a lean operation, but with the decline in profits, it was clear that they needed to take action. The company was solely operating in B2B and was not able to capture the full value chain. I was tasked with finding a solution to improve their operations and sales while maintaining their high-quality products.
My Role
- Project manager
- Business Analyst
- Web Developer and tech consultant
The Process
- Research and Planning
- Implementation
- Measure, Learn and Iterate
The Solution
After careful analysis, I presented Papelmania with a plan to shift operations from B2B to B2C. This would allow them to have a larger chunk of the value chain and increase their customer base. The plan also included implementing digitization and automations to streamline sales and inventory management. By automating sales reporting, staff could spend more time developing new products and creating content for marketing instead of guiding customers through the sales process.
1
Digital Transformation
To streamline analysis and reporting, facilitate sales to wider audiences and automate operations: Inventory management and CRM.
2
Short-term liquidity
To keep the lights on and be able to invest in the necessary transformations.
3
Sustainable product strategy
With optimization of marketing channels and financial modeling.
Research and planning
I conducted extensive research to better understand the brand’s strengths, weaknesses, and opportunities for growth. By analyzing market trends and competitors, I identified several key areas where Papelmania could improve its operations and profitability.
1. Selling below market prices
Through a comparative analysis, I discovered that Papelmania was selling its products well below market prices, both for bulk B2B sales and individual B2C sales. This presented an opportunity to increase profits by optimizing pricing strategies.
2. High potentital to target B2C sales
I found that there was a high potential to target B2C sales due to Papelmania’s strong social media presence and brand recognition. With the increasing trend of e-commerce adoption in Peru and plenty of affordable resources such as couriers and marketplaces.
3. Great opportunity to improve UX, efficiency, operations with digital tools
Papelmania was not using many technologies like an ecommerce website, CRM, inventory managment, product analysis.
4.Overstock on many products, and too many variations of some products.
I identified that there was overstock on some products with relatively low liquidity. This posed a risk to the company’s financial health and could be addressed through improved inventory management and pricing strategies.
Implementation
Digital Transformation
The digital transformation was crucial as it would allow us to streamline operations and analysis.
I chose a stack of a wordpress website with elementor design tool and woocommerce e-commerce framework. I decided to work with WordPress before because of its wide range of stackable free tools and integrations that in other platforms tend to be too expensive to users from SME or outside of high income countries at the expense of a higher learning curve for clients.
The website style and UX was optimized to Papelmania’s user base which is mostly women from ages 30 to 55.
Features:
- Integrations with Google Analytics, Whatsapp, Meta Pixel and CRM hubspot.
- card and mobile payments,
- printing shipping labels and sales and discount management.
- Inventory Management Papelmania’s
Increase liquidity short term
issue of overstocked products and low liquidity. Our solution involved organizing in-person and online liquidation events for select product variations that were not aligned with our product strategy. This helped us clear up valuable inventory space and generate some cash flow in the short term.
In addition, we used the proceeds from the liquidation events to invest in improving the quality and diversifying the offerings of other products that were in line with our product strategy. This allowed us to optimize our product portfolio and better meet the demands of our target market.
Product Strategy
the first step was to focus on rebranding to position the brand as a high-end one. This involved revamping the packaging, improving the finishing touches on products, and enhancing customer service. The aim was to create a unique and memorable customer experience that would differentiate Papelmania from its competitors.
Next, we looked at pricing strategies to improve profitability. After conducting a cost analysis, we discovered that we could increase pricing by an average gross margin of 70%, with room to implement continued discount and pricing strategies. This would help to ensure that Papelmania was not selling below market prices and would contribute to the company’s long-term sustainability.
Then, we looked at increasing the product offering by including accessories that are imports. This will not only diversify the product line but also provide an opportunity to offer unique and high-quality products that are not readily available in the local market.
Finally, we implemented a content strategy that included a calendar for social media, email marketing, and online events. This would help to engage with the target audience and build brand loyalty. By providing relevant content, such as tutorials, product reviews, and inspirational ideas, we hoped to increase the appeal of Papelmania’s products and ultimately drive sales.
Andres Clavier
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