| With a mission to create an ‘ethical Amazon’, Vic Morgan and Andy Redfern are determined to change the way we shop. Passionate about growing PointOV Ltd - the socially responsible business they founded just three years ago - they operate in the growing £29 billion market for ethical and fair trade products and services driven by increasing consumer demand. The majority of the turnover (80%) is generated from www.ethicalsuperstore.com, the leading UK online shop for fair trade, organic and eco-friendly merchandise. With the widest range of ethical products, the site stocks over 3,000 products and projected sales are over £2m this year. With a business plan to turnover £40 million within five years, aims to raise a further £3 million from venture capital sources by April 2008 and plans potentially to float as early as 2009, what is it about this partnership which helps them so successfully combine ecommerce with ethical trading? 1. Doing what the big retailers don’t… Big retailers are failing to stock an adequate range and number of ethical products, says Ethicalsuperstore.com. The company, which positions itself as the ‘ethical Amazon’, is a one-stop-shop for ethical products ranging from jewellery to jam. The aim is to provide consumers with much-needed choice in the face of restriction by major retailers. For example, typically, only one or two of Divine’s chocolate bars can be found on sale at Tesco yet Ethical Superstore stocks all Divine products (currently 62 lines). Fair trade tea, coffee and chocolate are the usual items stocked by large retailers with fair trade sugar and bananas also gaining precedence. However they have a reputation for turning down fairly traded crafts because they don’t fit neatly into their sourcing handbooks. Large multiples have the capability to offer a range of ethical products yet narrow their selection and limit consumer choice. This is often to the detriment of ethical producers - Ethicalsuperstore felt compelled to act… 2. Ethical suppliers given new hope… Ethical producers are struggling to secure listings with large retailers. Often lacking the capital to invest in marketing and selling directly to consumers, sales often suffer – leaving their enterprise vulnerable. By stocking over 3,000 products Ethicalsuperstore has given these suppliers hope and an effective and reliable distribution channel. With aspirations to stock tens of thousands of ethical products the company aims to empower producers both locally and globally – contrary to the major retailers who limit consumer choice. Ethicalsuperstore.com has recently launched a fresh food delivery service, supporting local farmers and other organic box delivery schemes. This is a further example of how Ethicalsuperstore.com will continue to flex and develop its business over the coming months - to achieve its goals. Ethicalsuperstore aims to support wide range of suppliers of ethical products from small scale UK farmers to producers and artisans from some of the most remote and economically challenged regions of the world. 3. Riding the ethical consumer wave… The appetite for ethical gifts has trebled in the last three years alone as consumers actively seek to become more educated about their purchases and aware of the production techniques and sources. Ethicalsuperstore believes consumer power will play an even greater role in defining the future of shopping. A new era of information-intensive shopping will emerge that enables shoppers to make more sustainable decisions. Future shopping experiences are likely to include using mobile phones to identify ethical credentials not found on product labels, information more impactful than a standard certification. Ethicalsuperstore supports this notion and is actively developing technology that empowers shoppers. Ethical purchases are no longer confined to food, drink and crafts for the home. ‘Hippy’ has evolved into ‘hip’ as ethical products range from gadgets with cutting-edge technology to a gift of buying a goat in a third world country. Ethicalsuperstore enables consumers to get ethical products and services conveniently and confidently. The business strategy has evolved in line with a demand for information about what makes a product ethical – ethical for people, for the planet, and for animals. As evidence of this, Ethical Superstore regularly showcases ‘hero’ products to illustrate this diversity. Hero products have included: 1)Trevor Baylis Eco Media Player £154.99
2)If You Care Aluminium Foil (95% recycled) £3.59
3)Green Glass Recycled Glasses - Grolsch Bottles £12.00 for 2
4)Rechargeable USB AA Cell Batteries £10.99 for 2
5)EyeMax Wind Up and Solar Powered Radio - £22.99 The people Andy, Co-founder Creative maverick with a passionate belief in the ability of good business to alleviate poverty, assist cultural development and promote environmental sustainability. Work history includes Editor and Editor in Chief positions at leading business magazines and eight years at Traidcraft as Director overseeing Operations and International Development. Vic, Co-founder Social entrepreneur with skills honed by a Harvard MBA and four years Management Consultancy in the US. Vic pioneered new ways of doing business in a company he founded which built a mainstream customer base for fair-trade and environmentally friendly merchandise in the US gift market. Experienced in venture development, strategy consulting, raising venture capital and public and private sector management. The business - 80% of turnover: www.ethicalsuperstore.com – the leading UK online shop with the widest range of fair trade, organic and eco-friendly merchandise.
- 20% of turnover: e-commerce and fulfillment services to leading fair trade companies, charities and values-based organizations (e.g. Traidcraft, People Tree, Divine Chocolate). Also selling wholesale products to independent shops, catalogue companies, and major multiples. Customers include Natural Collection, Tesco, WHSmith, and Waterstones
The ethical market opportunity - Ethical consumerism is entering a new era – massive interest in ethical companies evidenced by venture backed startups eg: Adili floating on AIM; Abel and Cole buyout and Clipper Tea financing
The strategy - To capture an initial share of the online ethical consumer market Point OV has raised £1.1 million in venture financing in two rounds – £286k in April 2006 and £800k in April 2007
- Making good progress towards achieving £2.2m, a three-fold increase in turnover for the year ending June 30 2008, up from £800k in 2007
- The business plan outlines strategies to achieve turnover of £10 million for year ending June 30 2009 growing to £40 million within 4 years (June 2012) when the business is forecast to be earning EBT of approximately £5 million
- To achieve this growth strategy the business is looking to raise a further £3 million in March-April 2008 from VC sources
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