Hermes Business Plan

Preview

Project Hermes is an Artificial Intelligence ecommerce prediction engine that helps determine the shopping patterns of individuals according to multiple factors.

Hermes gathers information from every participating online store as well from social media channels of visitors and customers.

Hermes display the products that are most likely to be purchased by an individual on participating stores along with personalized text that is most likely to encourage the customer to purchase.

Hermes integrates to popular platforms such as Shopify, Magento and WooCommerce with Shopify Apps, WordPress Plugins and HTML Widgets.

REST API access is also available for custom integrations.

As phase 1, Hermes will be marketed to 650,000+ online stores in the US, while phase two will be an expansion to China and the EU.

Why Hermes?

There are currently four main hosted turnkey ecommerce platforms: Shopify, Volusion, BigCommerce and 3DCart.

The CEO of Hermes and the writer of this plan, Mr. Gal Ratner, was the Chief Software Architect for Volusion, Reporting directly to the CEO betweenJuly 2008 and Jan 2011and have built their entire ecosystem. Volusion had up to 400 employees and a sales cycle of more than 200 mil.

Mr. Ratner then started another ecommerce platform named ShopSnap (

During his time at Volusion Mr. Ratner noticed some pretty serious issues: downtime, software bugs, poor customer service, but the main issue was that 95 percent of merchants didn’t really sell anything. They opened a cheap store for 150-200 dollars a month and put some products on it but never really sold anything and would close the store a year or two later.

All online merchants today experience the same lack of sales Volusion’smerchants’ experience.

In fact while online sales are up across the board, most stores experiences a decline.

Why? In one word: Amazon!

Merchants today are competing with Amazon, and they are losing.

When was the last time you typed a credit card number to a store that wasn’t amazon?

Amazon accounted for 60% of U.S. online sales growth in 2015 ($23 billion more in U.S. e-commerce sales in 2015 than 2014).

In fact Amazon’s conversion rate is a whopping 74%. And for non-Prime members, the conversion rate is still at 13% - that’s four times the average conversion rate of 3.32%

Why are Amazon so successful in converting visitors into customers? Amazon are extremely good at understanding their customers and designing an online experience that is tailored to the individual consumer.

Amazon keeps track of everything customers do on their website and predicts the products they might be interested in.

For Example: related products have a better chance of getting bundled into a cart with a product the user was viewing, while inspired products might be a better fit for a user over time.

This type of attention to details and smart customization is what helped propel Amazon, yet it is sourly missing from every other ecommerce platform.

Why Hermes?

In order to help online merchants compete with Amazon and increate online sales by risingtheir conversion rate using level of personalization that until now has only been reserved for Amazon.

Team

The founder of Project Hermes is Mr. Gal Ratner

Mr. Ratner has over 20 years of ecommerce experience in different capacities from developer to CTO and CEO.

Mr. Ratner has been responsible for such systems as the RockStar Games online store, ShoppingCart.NET and the Volusion ecosystem.

Along with Mr. Ratner there will be a team that includes:

  • 1 integration developer: This developer will be writing the integrations between Hermes and the different ecommerce platforms. They will write the Shopify App, The WordPress Plugin and the JavaScript and HTML widgets.
  • 2 Middle tier developers:Will be developing the Services layer, Multitenancy features, vendor integration, data collection and the database integration to and from Hermes’s neural network.
  • 1 AI developer: Will develop the core of Hermes’sneural network, compensation factors and recommendations.
  • 1 Data Scientist: Will develop the customer profiles Big Data solution and the merchants SQL database.
  • 2 UI designers:Will handle both graphics and HTML on the main website, widgets and PPC banners.
  • 1 PPC Manager: Will design and manage all of the pay per click campaigns.
  • 1 Marketing Manager: will assist in social media, branding and content marketing.
  • Up to 4 Customer Service Reps (pending on sales and volume): Will handle customer support requests.

Solution

Hermes collects information across multiple channels into its Data Store based on visitors of its global network.

Some of the information is collected from the stores, while some will be minded from the customer’s social channels or their local news:

  • Purchase history will be provided by the stores by adding a 1px image on the checkout page
  • Likes and dislikes (TV shows, movies, books, music, food, and sports) will be minded when a user logs into a store with a Facebook account.
  • Influences (celebs, athletes) will be minded from a user’s twitter feed and who they are following.
  • Life events (birthday, anniversary) will be minded from Facebook
  • Friends purchase history will be minded from a list of friends that have purchased from participating stores.
  • Online habits (time online, time on websites) will be gathered from the integration widgets.
  • Professionwill be minded from Facebook
  • Mood (by the nature of posts in the last two days on social media) will be aggregated from theirFacebook and twitter feeds.
  • Travel plans from partnerships with travel sites like Expedia (In return to information will help Expedia upsell travel related products)
  • Local emergencies will be minded from local news sources

When a potential customer visits an online store, Hermes will load the products that are most likely to be purchased by the customer at that particular time and customized verbiage based on its AI understanding of consumer behavior, thus increasing the likelihood of a sale and the store’s conversion rate.

The products will be either loaded on HTML cards or as a part of the regular store layout, depending on the type of integration this store has with Hermes.

For example: “Hi Joe, We noticed you have been researching those shoes for a while now.How about a 10% discount to buy them today? We will have them delivered tomorrow!”

Or: “Hi Mitch, Your wife’s birthday is next week. Click here to send her some flowers and this necklace she has been looking at recently.”

Whether a customer does or does not purchase a product Hermes suggested, the neural network will learn and adjust its parameters to be more effective based on the new data.

Project Development

Development will be done in stages:

  • Stage 1: MVP which includes only a Shopify app, purchase history and likes and dislikes.
  • Stage 2: which will include the rest of the integration widgets and data minding channels
  • Stage 3: Localization which will allow for china and EU customers.

Sales and Marketing Strategy

There are 3 main target merchants that will use Hermes and we have 3 different marketing approaches for them:

  • Small merchants (0-1m): will be marketed by PPC campaigns. Keywords such as “Make more sales with your Shopify store” will be used to tailor ads to different merchants.
  • Medium merchants (1-5m): we will use industry specific trade shows to capture sales leads and make a personal connection with such merchants.
  • Large merchants (> 5m): we will use targeted lists and lead nurturing in order to develop relationships with key executives and demonstrate our value.

Please refer to the projections sheets for PPC cost and trade shows cost.

Timelines

Timeline to first sale is 8 months. Timeline to profitability is 11 months with a churn of 10% and with the second month of sales already showing in the black.

Please refer to the projections sheet for EBITDA.