Executive Summary
Shopden is a shopping list and budgeting mobile application designed to be the go-to solution for every budget-conscious shopper seeking a user-friendly and efficient approach to shopping. Our mission is to save people time and money on their shopping trips. Shopden is in the personal finance software industry, as the app primarily focuses on couples and families who seek to take control of their spending habits.
Unfortunately, the three most significant challenges consumers face are overspending, forgetting essential items, and miscommunicating with those they shop for or with. As a result, shoppers spend over $300 per month on impulse purchases (CNBC). Furthermore, approximately half of shoppers come home regularly without the items they intended to buy (Independent). These problems lead to shopping debt, food and packaging waste, and task delays.
Shopden’s solution to these problems are through its collaborative shopping lists, ensuring people plan their trips to stores ahead of time and can track what has or hasn’t been purchased. Instead of buying impulsively, shoppers can make informed decisions based on their budget and shopping needs. Shopden users can track their expenses by: (1) Safely and securely connecting their bank or credit card accounts via Plaid API, and (2) Scanning and uploading receipt data to Shopden’s Expense tab. Additionally, users can see their spending breakdown by each category (i.e., groceries, electronics, hygiene products). These expense tracking features significantly reduce overspending, as people can easily see how much money they have spent at any given time and monitor how much of their budget remains. Shopden will generate revenue solely through our paid subscription plan. We offer all users a one-month free trial of Shopden’s full suite of features (i.e., unlimited shopping lists, expense tracking features, priority customer service). Once the trial ends, users can choose to subscribe to Shopden’s $3.99 premium plan or use Shopden’s free plan that includes basic features. Our user-friendly and affordable approach makes budgeting realistic and efficient.
Shopden is seeking $20,000 to fund our marketing campaign aimed at increasing visibility on the Google Play Store, Apple App Store, and Google Search Engine through paid advertisements. Shopden’s Marketing team will ensure these advertisements increase our engagement and conversion rate on these platforms. Based on surveys, interviews, and online research, the data projects 1,030 active users (309 paying subscribers) by the end of Shopden’s first year, generating an expected monthly revenue of $1,236. Shopden’s exit strategy is to be acquired by a larger technology company in the consumer services or personal finances industry, such as Intuit or NerdWallet.
Company + Service Description
Shopden is an upcoming mobile application designed to help users save time and money on shopping trips by organizing and planning purchases, collaborating on shopping lists, and tracking expenses. Shopden consists of four team members in charge of their area of expertise: Kristina Shkalenkova is the Social Media Manager; Vivek Sharma is the Chief Technology Officer; Jacob Ulmer is the Digital Marketing Manager; and myself; Mikael La Ferla is the Founder. The idea for Shopden was originally discovered by Mikael La Ferla in November 2023, and will be operational on Google Play/App Store on December 1, 2024.
Shopden is a service and for-profit organization for shoppers. Our features include collaborative shopping lists, receipt upload and expense tracking, and advanced notifications. Users can create, add, edit, and remove items to the lists (in real-time) they have with their friends, family, co-workers, roommates, or just themselves. Shopden’s receipt scanning feature allows users to take a picture of their receipt and upload the items and prices to their expense tab. Additionally, users can securely connect their bank and credit card accounts through Plaid API, allowing them to track their debit or credit transactions. Shoppers can see the category breakdown of how their money was spent (i.e., food, hygiene, clothing, etc.). Lastly, users can create advanced notifications for themselves or others regarding when and where to go shopping.
Shopden was founded out of the understanding that millions of Americans encounter problems related to their finances, specifically shopping. In today’s world, with stagnant wages and rising prices, it is essential for people to have a spending budget and be able to stick to it. Shopden’s mission is to fix this problem, as the app offers people a realistic, effective solution. Planning each trip with shopping lists and monitoring spending in real-time helps people avoid overspending and accumulating debt.
Market + Competitive Analysis
Shopden aims to enter the personal finance software industry, as Shopden primarily focuses on couples and families seeking control of their spending. This industry was valued at $1.27 billion in 2023 and is projected to grow to $2.07 billion by 2032, giving the industry a 5.7% CAGR (Expert Market Research, 2024). The main factor for its industry’s growth is the rise in financial awareness, as high interest rates and inflation costs affect millions of Americans. As a result, many people are seeking a convenient, effective solution to their money management habits.
Shopden’s main competitors are mobile apps that offer similar services, which include:
- AnyList is a popular shopping list with meal-preparation features
- Quicken is a reputable expense-tracking and budgeting tool
- You Need a Budget (YNAB) specializes in creating realistic user budgets.
Shopden differentiates itself from these three apps by seamlessly integrating their biggest features while adding our unique ones. No single app on the Google Play Store or Apple Store combines collaborative shopping lists, expense tracking, and advanced notifications. As a result, Shopden plans to be the first of its kind so people can prepare for their shopping trips and track their progress with one app. In addition, these apps lack modernity and visual appeal, which is a major factor in whether people will continue using an app. Shopden’s user interface/user experience (UI/UX) provides a layout similar to that of popular apps such as DoorDash and Instagram, which are considered to offer users an easily accessible approach to using its features.
To better understand the competitive landscape of Shopden’s industry, we have analyzed the threat of new entrants, the threat of substitute products, supplier power, buyer power, and rivalry.
The number of new entrants in the personal finance software industry is moderate, as nowadays, there aren’t many barriers to building an app and having it approved to operate on the Apple Store or Google Play Store. As a result, it may be challenging to stand out against more personal finance apps coming out each year. To mitigate the threat of new entrants, Kristina will continue generating unique and informative content each week, keeping our current social media followers and potential users engaged. By catering to our followers’ personal finance interests, Shopden is more likely to retain its user base and attract new users to our Instagram profile, giving us a stronger social media presence than apps with little to no presence.
The threat of an app substituting Shopden’s service is likely to occur if/when Shopden grows in popularity. Whether it’s existing apps, like AnyList, adding an expense tracking feature, or a brand new app that offers the same features as us, the best solution to combating substitutes is by promoting Shopden as much as possible and ensuring our unique UI/UX is as good as it can be. This consists of keeping our features simple and allowing users to interact with them easily. In addition to social media advertisement, optimizing our website for relevant keywords (i.e., SEO), and enrolling Shopden in business plan competitions, I plan on reaching out to bloggers and staff writers who specialize in technology and personal finance apps towards Shopden’s launch date. The more awareness people have of Shopden being readily available and addressing their problems with shopping, the more likely people will see our superior value proposition and not go to substitute products.
Due to Shopden using cloud service providers and development tools from Microsoft at no cost, supplier power is relatively low since there are so many competitors offering similar products and services as Microsoft. As a result, Microsoft offers free services to startups to build long-term relationships and brand loyalty with its customers. If Microsoft no longer offers these services, Shopden can remain cost-effective in the technical space by potentially considering other providers like Amazon Web Services (AWS) and Google Cloud.
Similarly, buyer power and rivalry are high as people have many shopping lists and expense-tracking apps, such as AnyList, Quicken, and YNAB. These apps offer free services and can be obtained by simply downloading the mobile app on a smartphone. Vivek, Kristina, and I plan on being as attentive to our users’ feedback and questions as possible, as they can reach out to us on our website, Instagram, and app. When Shopden is launched, the app will be monitored for any glitches or issues and will be fixed accordingly. We also plan on giving users a comfortable free version of the app, as there will not be any advertisements or shopping list restrictions for these users.
Marketing + Sales Plan
Shopden’s multi-channel marketing strategy consists of free and paid advertising on our Instagram page, website, Google Play Store and App Store, and business plan competitions.
Kristina is responsible for creating engaging and informative content regarding shopping and personal finance tips. These posts come in different formats, such as quizzes, polls, short clips, and one-minute analysis in a current event. Shopden’s Instagram currently has around 140 followers and receives an average engagement score of around 1,000 views and/or 40 likes per post. As a result, Shopden’s view-to-follower ratio is about 7x and Shopden’s like-to-follower is about 3.5x. Compared to other Instagram accounts under 1,000 followers, Shopden is well within the industry average of user engagement (view-to-follower ratio is 7.14x, and likes-to-follower is 2.3x) (WordStream, 2023). Kristina will continue growing Shopden’s audience by being informed on emerging trends and stories that apply to people’s personal finances. With the industry average conversion rate being around 3% (without advertisements), Shopden’s Instagram page can generate around 20 downloads per month (WordStream, 2023).
Jacob ensures Shopden’s website is fully optimized and is being properly indexed by Google’s Search Engine. Currently, Shopden’s website welcomes approximately 2,000 visitors each month. When Shopden launches in December, we plan on purchasing Google Ads with cost-effective and relevant keywords and phrases, such as “shopping list app,” “expense tracking app,” and “budgeting made easy.” In addition to Google Ads, we will also purchase Apple Store and Google Play Store ads with similar keywords to achieve favorable results. With the industry average conversion rate being around 3% (without advertisements), Shopden’s website can generate around 60 downloads per month (WordStream, 2023).
Similar to Rutgers University’s business plan competition, I plan on entering more local competitions which will hopefully provide funding, networking, and exposure for Shopden. Some events are Temple’s Innovative Idea Competition, Philadelphia’s Regional Tech Startup World Cup Pitch Competition, and Philadelphia’s StartupPHL Competition.
Management & Operations
As stated previously, Kristina Shkalenkova is the Social Media Manager; Vivek Sharma is the Chief Technology Officer; Jacob Ulmer is the Digital Marketing Manager; and myself; Mikael La Ferla is the Founder. Below are the resources needed to develop and grow Shopden for each person’s specialization:
Canva is a user-friendly marketing tool that makes digital art through pictures, videos, and advertisements. Kristina uses Canva to create, post, and share engaging content weekly on Shopden’s Instagram page. The content is related to shopping and personal finance tips, which align with Shopden’s goals of promoting financial well-being for those who seek it. A strong Instagram presence allows us to reach people’s accounts, and they can learn more about how Shopden can optimize their finances. Kristina leverages her creativity and background in digital marketing to engage Shopden’s followers and encourage them to follow Shopden’s continued progress.
With there being many startups to compete against, taking advantage of as many free platforms as possible is critical to developing an app on a budget. Microsoft Starter Hub allows Vivek to use free application programming interfaces (APIs), development tools, and mentorship resources. Vivek uses these free credits from Microsoft to build, test, and manage Shopden’s infrastructure in its early stages. Vivek’s strong academic background in computer science and work experience in software development allow him to build a scalable app while staying within budget.
Jacob’s expertise lies in Search Engine Optimization (SEO), a significant focus within marketing that allows businesses to improve visibility online, save money on various forms of advertising, and stay ahead of competitors in the aggressive online marketplace. He optimizes websites and mobile applications to do exactly this and align with the Google algorithm to deliver a high performing online presence to businesses.
Most of the resources required in my area have already been used in Shopden’s idea validation and vetting phase. I used Centiment to create and send surveys to people regarding their shopping and budgeting issues, and what app features would properly address these problems. I used Figma to design Shopden’s UI/UX, which is now being used by the development team to code the app. I use QuickBooks and Microsoft Excel to update Shopden’s financials (i.e., income statement, balance sheet, cash flow statement) and Hostinger to host Shopden’s website.
Long Term Development & Risk Analysis
Shopden’s environment of the personal finance software industry can be broken down into eight categories: (1) Complementary products or services, (2) Technological change, (3) General economic conditions, (4) Population demographics, (5) Ecological/natural environment, (6) Global competitive forces, (7) Political, legal, and regulatory forces, and (8) Social/cultural forces. These categories may shape and change this industry, so analyzing trends and consumer behavior is important.
As Shopden’s user base grows, we will consider partnering with non-profit organizations (i.e., The One Less Foundation) and for-profit organizations (i.e., Mint) that share common goals of promoting financial literacy and well-being. Shopden benefits by attaching its name to reputable companies, ultimately increasing its user base, and our partners benefit by promoting its services to our user base. Whether it’s incorporating artificial intelligence (AI), updating our APIs, or replacing a key feature, our technical team will stay updated on ways to improve Shopden’s processes.
Economic conditions may affect our profitability, whether they affect Shopden or its consumers. Currently, all of our costs are relatively fixed, consisting of subscriptions ranging from $0 to $40 per month. Shopden does not rely on paid labor; we receive equity for our services. As a result, our costs are kept to a minimum and aren’t affected by the economic climate, which allows us to not have to ask too much from our users regarding payment. We can provide an ad-free experience for free and paying users and unlimited shopping list abilities for our users. On the other hand, our sales are contingent on consumers purchasing power. Since Shopden is necessary for people wanting to take control of their spending, users may be willing to use Shopden’s services.
While anyone can use Shopden, it’s important to bring Shopden to a specific demographic that responds well to its purpose. When I surveyed to determine the kind of person that responded the most favorably to Shopden’s impact, it consisted of women in the 26-35 years old range, followed by men in the same age range. I wasn’t particularly surprised by these results, as over “80 percent of purchases and purchase influence are made by women” (Bank Rate, 2023). With this being said, it was especially important to choose a unisex color format for Shopden’s logo and app design, as well as create social media content that would translate well to both young adult men and women.
Since Shopden is a mobile app and the vast majority of our operations are done online, Shopden’s focus on implementing a concrete data protection and disaster recovery plan consists of utilizing Microsoft Azure’s services, which are provided for free. In addition to environmental challenges, Shopden is indirectly affected by global forces and governmental change, such as rising prices, higher interest rates, and strict consumer privacy laws. In order for people to stay ahead of economic struggles, Shopden must ensure it operates without any issues so people can conveniently and effectively plan their shopping trips and budget accordingly. Unlike companies heavily reliant on consumers’ search and spending patterns, Shopden does not profit from users’ location or personal data. As a result, Shopden is compliant with regulations such as the General Data Protection Regulation (GDPR) and California Consumer Privacy Act (CCPA), as Shopden only makes money from its subscription plan.
SWOT Analysis
By evaluating Shopden’s strengths, weaknesses, opportunities, and threats, we can have an effective strategy that leverages our advantages and addresses our challenges in the best way possible.
During Shopden’s idea validation stage, the most common problem people had when shopping was that they did not have a consistent method for planning what they were buying. People went back and forth between texting, using the Apple Notes app, sticky notes, or just going to the store without a plan. This resulted in people purchasing duplicate items, forgetting to buy specific items, and impulsively buying items that they didn’t need. Statistically, “the average person spends over $300 on impulse purchases every month,” which amounts to over $3,600 annually (Luther, 2023). With this being said, Shopden’s unique value proposition is being the first app to have collaborative shopping lists and expense tracking features so that anyone, regardless of age or technical proficiency, can use it. The convenience of not having to switch between different methods of shopping lists and browsing hundreds of budgeting apps saves people the time and stress of having it in one location. Shopden’s user-friendly UX/UI makes people more likely to use it, as they are able to share this experience with their friends, family, co-workers, and more.
Shopden’s second biggest strength is our ability to keep costs minimal. Shopden is fully operated by its LLC members, which means everyone works on equity instead of cash. Most notably, Shopden’s code is overseen by CTO Vivek Sharma, who has a strong background in creating strong softwares and applications with minimal expenditures. We are passionate about helping people with their finances and making them more financially literate through our online presence.
Shopden’s most significant weaknesses are its limited brand recognition and budget for spending. Due to Shopden being a new entrant in the personal finance software industry, we will be competing against reputable mobile apps such as Quicken, YNAB, and AnyList. This is relatively common with startups, especially ones that do not have investors.
On the other hand, Shopden has many opportunities to address our weaknesses and capitalize on our strengths. While the companies mentioned above have more users, revenue, and industry experience, we have a strong strategy for promoting Shopden organically. These growth strategies consist of posting relevant content on our social media platforms and website, contacting newspaper writers and bloggers to give their honest reviews on Shopden, and entering into business plan competitions. Additionally, forming local partnerships with organizations that align with our goals can expand our user base in Philadelphia, PA. Shopden can offer financial literacy resources and assistance at local credit unions and community banks, non profit organizations like Financial Literacy Organization for Women and Girls (FLOW), and local schools and colleges.
The biggest threat to Shopden is the possibility of large companies imitating Shopden and creating its platform. For example, when Square, a mobile payment company for small businesses, began gaining traction, Amazon launched a competing product 30% cheaper than Square. With Amazon’s large user base and strong financial standing, it was almost guaranteed that Square would no longer exist. However, Square’s easy-to-use interface and commitment to its users helped them through this period, and Amazon eventually withdrew its product from the market.
While this is a rare scenario of a startup succeeding over one of the largest companies in the world, Shopden’s user-friendly UX/UI and commitment to catering its services locally will affect people on a personal level, which is the most important element for any business starting.
Financial Plan
As of October 14, 2024, Shopden has spent a total $10,000, which consists of trademarks ($1,500), LLC registration fees ($1,000), mobile app development ($5,200), website and domain subscription ($300), graphic design subscription ($1,000), and miscellaneous ($1,000). Shopden’s short term costs (on a monthly basis) are about $1,000 per month. Due to Shopden’s self-sustaining business model of having all four members contribute its labor, and not needing a central office to work from, Shopden does not have any long term costs.
Shopden’s cost strategy focuses on spending most of our money and efforts on operational expenses (i.e., Plaid API, App Maintenance, SendGrid, Miscellaneous, and Google Play Store and App Store Fees) while also meeting our non-operational expense obligations (i.e., Instagram and Google Search Engine advertisements). Below is a breakdown of all of Shopden’s operating and non-operating expenses:
- Plaid API ($500/month): While this is our biggest expense, it is the most important feature for our paying users. Shopden is able to automate how people track their spending by safely and securely connecting Shopden to their bank accounts. As their transactions appear on their banking or credit card statements, users can see at-a-glance how well they are operating within their spending budget and in what areas.
- App Maintenance ($100-$200/month): Due to Vivek’s overseas development operations, Shopden is able to save the initial and continuing maintenance costs of having Shopden run smoothly. This includes routine updates, bug fixes, and necessary performance enhancements to the app. Ensuring Shopden runs smoothly and addresses any issues when it is operational is crucial to its success, as people will not trust to use an app that crashes often. While hourly rates in the U.S. vary anywhere from $20-$100 an hour to ensure a mobile app’s quality, we are fortunate enough to have an affordable rate of $5-$10 an hour.
- SendGrid ($20/month): SendGrid is an app email service that allows our technical team to send and manage emails between themselves and Shopden’s users. These emails consist of two-step verification, password resets, and promotional offers. This service ensures users can sign up and log in to the app effortlessly.
- Google Play Store & App Store Fees: To operate on both Google Play Store and Apple Store, Shopden is required to pay for its spot on these platforms. Google Play Store only charges its mobile applications a one-time payment of $25, and Apple Store charges an annual fee of $99. These are low, essential costs that all mobile apps need to pay to service Apple, Android, Samsung, and Google phone users.
- Miscellaneous ($50-$100/month): A buffer that accounts for roughly 5% to 10 % of our monthly spending was needed to cover any unexpected and minor costs. This could also cover any price increases or service fees incurred during our operations.
- Marketing Expenses ($200/month): Kristina and Jacob are in charge of promoting Shopden on its various channels, such as Instagram, LinkedIn, and website. They are able to pay for advertisements related to Shopden’s benefit, such as centering its wordage and images around shopping lists and budgeting.
(Please see attached Excel sheet detailing Shopden’s Financial Projections)
- Shopden is projected to break even by Year 2, with a net income of $10,387.07. Shopden will need to have 2,680 total users, 804 paying users, and a gross profit margin of 53.24% to achieve this.
- At the end of Year 3, Shopden will have 5,470 total users, 1,641 paying users, gross margin of 69.45, and a net cash flow of $49,465.22.
- The average gross profit margin across all industries is 36.56%, so having a gross profit margin of 53.24% is considered well above-average (Vena, 2024).
Differentiation
Shopden differentiates itself through its unique offering of combining collaborating shopping lists and expense tracking, all while offering a user-friendly user experience and interface to anyone using the app.
Every shopping list we have downloaded and used needs to include the most important aspect of shopping lists: sharing them with the people you shop for or with. While most of the apps offered an “export” option to send to someone via text message, email, or WhatsApp, there wasn’t any way people could add people within the app to these shopping lists. Shopden is adapting a similar approach to how social media companies operate. Like how users can share Instagram posts by creating group chats and threads within the app, Shopden allows users to share shopping lists with those they associate with. This feature lets its users see all their shopping lists at a glance and monitor what needs to be purchased in real-time.
While there are expense tracking apps (i.e., QuickBooks, Wave) that allow users to scan receipts and connect their banking information to the app, these services often require prior accounting experience or a strong handle on finances. These services are great for businesses and some people; however, they leave out a lot of other people who either have never tracked their expenses or do not know how to. As a result, Shopden summarizes every relevant expense tracking metric on one page. The top half of the page shows a colorful, engaging graph showing how much money has been spent on each category by month. It also includes a receipt scanner button and a single bar chart that shows how much money has been spent in the user’s budget. The bottom half of the page shows the user’s spending transactions, which contain the shopping category, price, and date. As a result, people can interact with one page that displays what items they have spent, how much they have spent, and how much of their budget remains.
Market Research (Cited)
Dickler, Jessica. “Despite Recession Fears and Fueled by ‘Revenge Spending,’ Americans Spend $314 a Month on Impulse Purchases.” CNBC, CNBC, 22 Aug. 2022, http://www.cnbc.com/2022/08/20/shoppers-spend-over-300-a-month-on-impulse-purchases-despite-recession-fears.html#:~:text=Shoppers%20now%20spend%20%24314%2C%20on,%24183%20in%202020%2C%20Slickdeals%20found.
“How to Do UX/UI Research and Why It Matters.” Email and Internet Marketing Blog, SendPulse, https://sendpulse.com/blog/ux-ui-research. Accessed 23 July 2024.
Luther, William. “Impulse Buying Statistics and Facts: A 2023 Update.” Fit Small Business, 13 July 2023, https://fitsmallbusiness.com/impulse-buying-statistics/#:~:text=4.,%2C%20consistently%2C%20on%20impulse%20buying. Accessed 23 July 2024.
McFarland, Matt. “How Square Beat Amazon in an Unlikely Tech Battle.” CNN, 10 Mar. 2020, https://www.cnn.com/2020/03/10/tech/square-amazon-jim-mckelvey/index.html. Accessed 23 July 2024
Omnicore. “Instagram by the Numbers: Stats, Demographics & Fun Facts.” Omnicore Agency, Omnicore, 15 Sept. 2023, https://www.omnicoreagency.com/instagram-statistics/.
“Personal Finance Software Market Size, Share & Growth 2032.” Expert Market Research, www.expertmarketresearch.com/reports/personal-finance-software-market. Accessed 14 July 2024.
“Purchasing Power of Women Statistics.” Bankrate, 10 July 2023, www.bankrate.com/loans/personal-loans/purchasing-power-of-women-statistics/#purchasing. Accessed 14 July 2024.
Vena Solutions. “Average Profit Margin by Industry.” Vena Solutions, https://www.venasolutions.com/blog/average-profit-margin-by-industry. Accessed 14 Oct. 2024.
Wegner, Douglas, et al. “A Systematic Review of Collaborative Digital Platforms: Structuring the Domain and Research Agenda.” Review of Managerial Science, vol. 17, no. 2, 2023, pp. 485-512. Springer, https://doi.org/10.1007/s11846-023-00695-0. Accessed 23 July 2024.
Weston, Charlie. “Most People Forget to Buy What They Went to Shop For.” Independent.Ie, Independent.ie, 30 Apr. 2018, http://www.independent.ie/irish-news/most-people-forget-to-buy-what-they-went-to-shop-for/36857147.html#:~:text=Many%20people%20say%20they%20often,buy%20before%20they%20set%20off.
Created by Mikael La Ferla
Mikael La Ferla 