How Graze are experimenting their way to growth with Magento and AWS – Part (1/2)
In a recent webinar, Graze’s CTO Edd Read gave us an insight to the secret sauce powering their staggering growth. I am not talking about the secret sauce for making healthy tasting snacks; I am referring to Graze’s ability to innovate and create new business models, while expanding their core business.
Here you can find the original webinar recorded on the 25th May 2016. It’s 40 mins long, so if you don’t have time, below is a summary.
Considering that it often takes retailers several months to plan, build and launch a site, hoping that it will deliver the projected revenue, Graze’s approach is very practical and straight-forward, aimed at testing the viability of new e-commerce ideas, without sacrificing quality and scalability, while producing better plans with real data on hand.
Graze’s vision is “to use technology to become the world’s number 1 healthy snacking brand”. That vision is a reality, considering that Graze turned over £68m in the year to February 2015.
How does technology help Graze to have an advantage over their blue-chip FMCG competitors?
A few examples:
- Graze can take a new product to market in 48 hours and gather 15,000 customer reviews an hour. Since they started 7 years ago, they launched over 2,000 different snacks. This allows fast learning, through quick tests and iterations;
- Marketing is extremely efficient and measurable;
- Graze launched their top-selling products into supermarkets; in 7 months their products were on 5,000 distribution points and during their period it achieved £7m in retail sales;
- In 2015 they also launched in America;
- They recently launched Graze Shop, a complementary offering to their subscription model;
- and more coming…
Graze is the hallmark of an innovative company. In fact, they were early adopter of AWS, since 2008, when EC2 and S3 were the only services available with no console at that time. Graze’s site was on cloud since day one. Today Graze adopt many more AWS services, such as RDS, Elasticache, Cloudfront, ELB, WAF and Redshift. Even their ERP and dispatch systems are deployed through Docker on Elastic Beanstalk. The whole business has real time access to valuable and accurate reporting.
Over a year ago, Graze’s decided to test an online shop to complement their subscription service, as result of their customers’ feedback, who wanted the option to buy their favorite snacks, as an alternative to receiving weekly boxes of snacks selected by Graze’s intelligent engine.
Graze has a very capable and substantial technical team; however, they knew that building their e-commerce platform would have been a step too far, considering that there are options available in the market. They needed a platform that would provide the flexibility for them to best control the user experience, without completely handing over the keys to one of the SaaS players. They selected Magento 2 Enterprise Edition, and in the summer 2015 they were one of the few participating in the Magento merchants beta.
- Unlike many merchants using over-provisioned dedicated infrastructure to run Magento and deal with the spiky nature of e-commerce traffic, Graze wanted to keep using AWS. They didn’t want to move away from the cloud and they didn’t want to work out how to deploy, scale and run Magento on the cloud either, although they clearly had the skills and capability to work that out by themselves. There was an opportunity cost for them and speed to market was the essence. This is where Akoova came in, to provide Graze exactly what they wanted, immediately:
- the ownership of the platform to control the user experience
- the easy and cost effective way of running Magento on the cloud
Graze’s new shop running on Magento 2 is seamlessly integrated with their subscription site, under the same URL https://www.graze.com/ via CloudFront (CDN):
Akoova, being a Lean company to the core, was also a great fit with Graze’s culture, the way they operate, collaborate and innovate.
Graze needed to quickly set-up their new online shop to validate their hypothesis by running quick experiments. They know that the truth is not in what customers say, the truth is found in customers’ behavior, especially when asking them to part from their money.
Graze, instead of launching a new line of business after thorough market research, strategy, customer surveys, by building the best web site etc…, they quickly and cost efficiently built an MVP (Minimum Viable Product), to assess customers interest, demand, conversion rate etc… This was achieved by selecting the right ingredients (you bet they know a few things about good ingredients):
- Magento 2 – as E-commerce Platform
- Amazon Web Services (AWS) – as Cloud Infrastructure
- Akoova – as the platform to run Magento on top of AWS
- Inviqa (formerly Session Digital) – as the e-commerce agency to build the site
By entrusting the right specialists and by keeping the initial scope to a minimum, Graze managed to deliver a fully working prototype in two months, without compromising the platform’s foundation on top of which they needed to quickly iterate and scale with peace of mind, in case their experiment was successful.
The results were very encouraging, much better than they expected, so they decided to scale the new business model, while keep running experiments.
Graze’s experiments aim to answer the question “Should we build it?”, rather than “Can we build it?”. This is why initially Graze’s new site was an MVP (Minimum Viable Product). An MVP is the simplest thing that you can show to customers to get the most learning at that point in time.
This allowed Graze to learn what they needed as fast as possible and at the lowest cost.
In fact this is a key concept of “The Lean Startup” by Eric Ries: “The only way to win is to learn faster than anyone else”. (Eric Ries, the father of The Lean Startup, is one of the Senior Advisors at Akoova, together with Dan Jones, the father of Lean).
You can appreciate why Graze has chosen to work with Akoova. Innovating at product level is important, innovating the way of doing business is key.
Where do we go from here? We know that we need to keep running experiments and learn faster than anyone else. But how? This question is answered in part 2 of this blog post.
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