Reebonz is a platform that enables the transfer of luxury goods to various stakeholders. The key to success depends on how well Reebonz manages its supply and creates demand for its products. When scaling the business, Reebonz should use the data to identify the product’s demand and its strategies to manage the product chain.

At the initial stage, Reebonz should get a good product mix to test out the market demand. This can range from limited edition products to mass-market luxury products. The focus would be on sourcing products with a lower cost to have a healthy margin, allowing them to have a small buffer to cover other unforeseen operating costs.

After collecting the data and insights on popular brands and items at the initial stage, Reebonz should utilise the information to make the decision on the products mix and decide if its business strategy is to target the mass consumer market (more sales but lower margins) or go after an exclusive group of clientele (less sales but higher margins).

When targeting the mass consumer, Reebonz’s focus would be going up the product value chain to source items at a lower price and increase its margin when selling products. To increase its scalability, Reebonz can consider focusing on a few big suppliers to decrease costs and increase profit margin.

For exclusive clients, the focus would be to bring in high-end limited edition luxury products providing its customer with access to premium items.

Company can decide to target both groups. However, one needs to be clear about its primary and secondary target audience. The primary target audience should be the company’s main source of income, and the company should prioritise its efforts.

A clear understanding and choosing its approach would enable Reebonz to focus on more strategic planning to foster valuable partnerships to increase its basket size or the number of products sold in a single purchase by bringing in the types of products that cater to the tastes of its particular target audience.

As businesses expand over the years, their original customers would also experience shifts in their lifestyles, needs, and desires as they enter different phases of their life.

Businesses can grow together with their customers to maximise the Customer Lifetime Value. Businesses need to understand the needs and changes in demographics of its customer to build customer loyalty to the brand. With 12 years of operations, did Reebonz map out the shift in their customer demands over the years?

For instance, customers who were fresh graduates when Reebonz first started would have developed different spending patterns and requirements as they move up in their career or lifestyle changes when they enter a different stage of life. Customers who started with Reebonz in 2009 would likely have increased in earning power and demands as they mature in their careers and lives.

Segmenting their customers and understanding the different needs would have allowed Reebonz to develop specific marketing strategies to target its customers and understand and address their needs. For example, a business executive might prefer function over form, while a socialite would emphasise trendy designs, and a newborn parent might choose space over design.

Reebonz’s marketing strategy seems to lack emotional appeal. Reebonz’s Facebook posts mostly showcased their products in a commercial manner, focusing on the product focusing on the saving rather than the emotional appeal of the product.

The image above explained how Reebonz could extend the life cycle of products within its ecosystem. First, customers would enter the Reebonz ecosystem as buyers or potential sellers of high-end luxury items. Then, Reebonz would market its supporting services, such as care services. Finally, customers could sell the products on Reebonz’s platform and purchase other products, and the cycle would repeat. This would allow Reebonz to maximise the product's value within the ecosystem, and Reebonz could cross-sell its other product offerings, such as its care services and its White Glove or Closets services.

An example of a business that grows with its customers is LoveBonito, a fashion eCommerce and retail concept. LoveBonito started out selling affordable female casual wear on its online platform with its target audience of female youth. To maximise its customer lifetime value, the business grew its product line throughout the years to include businesswear as its customers entered the workforce and maternity clothes as its customers became parents. LoveBonito understood the needs of its customers and addressed them as they entered different stages in their lives. Its founder also developed a strong brand identity by becoming a spokesperson for women’s issues connected with its primary target audience.

Reebonz’s White Glove and Closets service relied on a steady stream of individual sellers to list their pre-loved items on the platform. Since sellers were a key part of Reebonz’s supply chain and strategy, it needed to understand the supply and test whether potential sellers were willing to sell the high-end luxury products they owned and the demand of buyers to purchase pre-owned luxury items.

These potential sellers might have received their luxury items as gifts for special occasions such as anniversaries and birthdays and may have an emotional attachment. As a result, they may be less willing to sell or replace these items.

Reebonz might have to look beyond and may have needed to establish partnerships with other businesses for its C2C offerings.

Reebonz entered eight markets within just two years of its commencement. For Reebonz to grow rapidly, it needed to make its business scalable. Without scalability, operational costs would have been high, which would eat into Reebonz’s profits. One way to make its business scalable was to increase its product scalability. Reebonz has to identify the common denominator within the business offerings, such as common preference for items from a particular brand.

This would help scale the business, as Reebonz would have been able to source multiple products from a single supplier. Similarly, a single brand may have numerous items that cater to different target audiences with different purchasing power. For example, luxury handbags for those willing to pay more and luxury wallets for those willing to spend less. Reebonz could have sourced for brands with a range of products that catered to these different target audiences.

Establishing a team to understand and analyse the data on Reebonz’s platforms would allow Reebonz to understand its different target audiences and increase its ability to scale.

Reebonz only allowed sellers on its Closets platform to sell to buyers from the same country. This may have been a missed opportunity as it could have leveraged its presence in various markets to facilitate the trade of pre-owned luxury items from different markets. Having entered multiple countries with varying demographics of consumers, Reebonz could have leveraged these market entries by understanding the customers' demographics, purchasing power, and pattern in the markets they entered. For instance, products from White Glove sellers in countries with higher purchasing power could be marketed at a lower price to customers in countries with less purchasing power.

In leveraging its entry into different markets, Reebonz would also have needed to account for import duties and logistic issues such as warehousing, storage, and ensuring that these high-end luxury goods were not damaged or lost during the delivery process. These issues would affect Reebonz’s profit margin or sales if Reebonz decided to pass the costs on to its customers.

As an eCommerce platform, it was easier for Reebonz to enter multiple markets simultaneously. First, however, Reebonz needed to ensure that its business operations were scalable and understood the various markets it served.

Business owners who intend to scale their business and enter into various markets should consider doing the following:

Internal

• Setting up a data team: Having a team that analyses and interprets key data and indicators enables the business to optimise its business functions and understand the markets it serves.
• Don’t neglect the relationship with your investors: When companies decide to list on a stock exchange, they need to manage their investors carefully. Create an investor relations department or hire an external agency to manage this aspect.
• Understand your customers and address their needs: To capitalise on key opportunities, maximise customer lifetime value and grow with their customers, businesses need to understand and address the needs of their customers. Displaying an understanding of your customer’s needs through your products would also increase customer loyalty to the business.

External

• Identify your primary and secondary target audience: It is important for businesses to identify their primary target audience early. The primary target audience should be the target audience that generates the most profit for the business and one that the business should strive to increase. Identifying this segment allows businesses to set the business strategies on the partnerships and product mix that would maximise profits from this group.
• Test the willingness of customers to buy and sell (for C2C businesses) the products: While businesses build products that they believe there will be market demand for or launch products based on customers’ feedback, it is still important to test the willingness of the consumers to buy and sell products on their platform.
  

When businesses attempt to scale and enter various markets, they need to streamline their business operations and processes to ensure the scalability of the business. When simplifying and scaling your business operations, consider the following points:

• Outline processes required to support your business: After the early identification of their target audience, businesses should outline the processes and operations required to support their business strategies. This will provide business owners with an idea of the strategy's feasibility and may result in adjustments to the strategy to increase profitability.
• Research: When entering new markets, businesses need to understand the different legislations and duties that might increase their costs and affect their profitability. Companies need to research early on potential tariffs and taxes of each country they plan on entering and how these might affect their profit margin.
• Calculate and estimate operational costs: With any new business venture, the business needs to do its budgeting. Operation costs such as warehousing, logistics, and even the delivery service needed (for example, as Reebonz was shipping high-end luxury items, premium delivery services may be needed).
• Know the business models of each product: Businesses may have multiple products, each with its business model. For example, Reebonz had its B2C eCommerce platform and C2C White Glove and Closet business. Therefore, businesses need to understand the requirements of each of the different business models they are engaged in. For example, for Reebonz’s B2C eCommerce platform, one of the key requirements was to know how to manage the costs of doing business. However, for its C2C business, a key requirement would be the sensitivity of paying sellers (potential customers) on time and the transparency of its payment process and timeline.

When attempting to expand their business, it is also important for business owners to study how they can increase their product scalability and leverage their presence in various markets.

• Increase product scalability: When scaling your business, identify ways to increase product scalability. For example, you may be able to streamline your supply chain by sourcing multiple products from a single supplier, or you may identify if your audience has a common preference for items from a particular brand, allowing you to source for a range of luxury products from the same brand.
• Maximise your product value: Business owners need to consider how customers would use the products and how they can increase the product value or the benefits the product offers to the target customers. For example, Reebonz could have increased its care services' marketing and increased the product's life cycle in its ecosystem.
• Use your market entry to your advantage: Reebonz was an eCommerce platform; it was simple for them to enter several markets. They might have taken advantage of this by analysing market demands and repurposing pre-owned products that were no longer in demand in one market to another.