Entrepreneurship (Business Model Canvas - Home24)

ENTREPRENEURSHIP

REPORT

HOME24

BUSINESS MODEL ANALYSIS

Students: Professor:

Francesco Di Cicco Guido Bortoluzzi

Student 1

Lisa Lucassen

Simone Dalla Costa

Kristina Sommer

Student 2

Niklas Broscheit

Student 3

Student 4 ACADEMIC YEAR 2022 - 2023

Index

1. Introduction ................................................................................................................................................1

2. Customer segments .....................................................................................................................................1

3. Value propositions ......................................................................................................................................2

4. Channels .....................................................................................................................................................3

5. Customer Relationship ...............................................................................................................................4

6. Key Resources ............................................................................................................................................5

7. Key Activities .............................................................................................................................................5

8. Key Partners ...............................................................................................................................................7

9. Cost structure ..............................................................................................................................................8

10. Revenue Streams ......................................................................................................................................8

11. Conclusions ..............................................................................................................................................9

Bibliography .................................................................................................................................................11

1. Introduction

home24 SE is an internationally operating online furniture and decor retailer. It offers a wide range of products

such as beds, sofas, tables, chairs, and home decor accessories of third-party as well as private label brands.

The company was founded in 2009 and today is operating in Europe and Brazil. In 2012 it extended their

operation in France and the Netherlands and acquired Mobly Comercio Varejista Ltd. which is today's

Brazilian segment. After launching the e-commerce in Austria, Italy, Belgium, and Switzerland within the next

acquired the brand “Fashion for Home” in 2015, integrated

two years, home24 its assortment into the company

and its founder and managing director, Marc Appelhoff, became the new CEO of home24. Three years later,

the company was listed on the Frankfurt Stock Exchange. In 2022, home24 acquired Butlers, a German

lifestyle retail chain that sells home accessories and decoration throughout Europe. After the acquisition it had

over 200.000 daily visitors on its website and over two million active customers. Furthermore, the company

launched a marketplace in Germany in 2022 on which third party providers can use the online presence of

home24 to sell their own products. The company plans to extend its marketplace concept within Europe. Most

recently, XXXLutz - the second biggest furniture retailer in Germany with a revenue of around seven billion

euros - acquired home24. Revenues of Home24?

[1] [2] [3] [4] [5] [6]

2. Customer segments

home24 has a rather segmented market strategy in regard to its customer segments, identifying and dividing

‘home and living’

its customers based on socio-demographic criteria, mainly by age and share of spending for

products and services. Therefore, the following applies:

spend

The first customer segment are customers aged 25 or younger. Based on their relatively young age, those kinds

of customers may not invest a high share of their income into purchasing furniture as their home inventory

who says that?

seems not to be their highest priority. Nevertheless, home24 offers a wide range of products that fit the needs

are these

your thoughts?

of customers that have relatively small budgets.

a little bit “large” as a customer segmentation. Where did you find it?

‘home

The second customer segment includes people aged from 25 to 65. In this segment, the investment in

and living’ is higher than in any other segment. Reasons for that appear to be the higher income as well as the

tendency to stay in one place for a longer period. Consequently, these customers tend to purchase furniture

more frequently and to buy higher priced products. The big assortment of home24 enables these customers to

choose from a variety of high-priced products, some of which are even designer products.

The third customer segment includes the people aged 65 and older. This segment seems more difficult to reach

than the other two segments as many people aged 65 or older are not used to dealing with modern technology.

Also, in this stage of life people tend to be less keen to invest in new furniture. Furthermore, the purchasing

power of people in this customer segment is usually decreasing after they retire.

These considerations of yours could be applied to any prodct. Not just forniture.

[7]

As a possible change for the company in order to be more consistent in their business model, the current

segmentation strategy could be extended. While the segmentation by age enables home24 to target customer

groups differently depending on their age, dividing the segments also by additional factors (e.g., income) could

lead to a potential advantage. It would enable home24 to target the individual needs of its customers more

efficiently via ads or other marketing campaigns.

However, following a more sophisticated brand building strategy, home24 could use its current private label

brands to target customers on an individual basis. This requires home24 to increase the brand awareness of

each individual brand for the specific customer segment.

Some confusion here. Why do you call this action “brand building”? And what are its current private lavel brands you mention?

1

3. Value propositions “happy home”

3.1. Enabling you to create a What is the corresponding Value Driver we studied? Use vocabulary and concepts

learnt in class

home24 addresses customers of different generations including all kinds of budgets, lifestyles and tastes. The

their very own “happy home”.

mission is to help customers create The company tries to fulfil this mission

through its e-commerce platform as well as through the various private label brands.

[6] [8] [9]

home24 could transfer this message via its e-commerce platform but also by its brands to their specific

customer groups more efficiently. The brand BUTLERS for example might appeal to the first target segment.

home24 should communicate the ability to host friends and family in a home that is well decorated by plain,

simple but still good-looking decor. Therefore, BUTLERS should be the first brand to come to mind for

targeted customers, when it comes to buying affordable products supporting the areas of decorating your home,

Not clear if in this part you are analyzing home24 (as is) or providing suggestions (could be)

gifting friends and cooking.

The second target segment is typically for people who can spend the most on furniture. Within this group,

same here people certainly have different lifestyles. For this reason, home24 could use its several private label brands

that fit various desired lifestyles. The brands Studio Copenhagen or Mørteens for instance are both brands, that

offer various high-priced products to decorate homes in a typical modern Scandinavian style. Products usually

are made of light wood with typical Scandinavian colours keeping it modern, elegant and retro-styled.

the company’s

Furthermore, brands such as Ars Natura could target those customers who prefer to equip their

homes with furniture that look like and are made of natural materials: solid wood with robustness and

longevity. However, its products are offered in a rather high price segment. Ars Manufacti however offers a

wide range of high-priced products for people who fancy an industrial style, hence rough wood and painted

metal elements combined with vintage looking leather as key elements. Additionally, for those customers who

appreciate a rather modern and minimalistic type of living style, there is the brand Fredriks which provides

products of sleek shapes and surfaces, a colour palette of white, black, grey and chrome and added features

Again, what’s the value driver here? We studied it in class

such as LED lighting.

[9]

3.2. Offer a state-of-the-art shopping experience Again, what’s the value driver here? We studied it in class

Another value proposition of home24 is the shopping experience that is provided to their customers. It can be

described as easy, seamless and inspiring. home24’s modern technology is making it possible to constantly

adapt to customers' needs and interest by using individual recommendations for potential items to purchase.

This helps to reduce the overall complexity of buying online for many customers, hence increasing user-

here it is! friendliness and pleasure in shopping online for all customer segments. Additionally, the optimization of the

finally! platform and integration of applications for mobile devices support the online purchasing behaviour of

customers as using smartphones for shopping has been increasingly standardized.

Furthermore, ordering and receiving products bought on home24 is a very easy and fast process. Customers

receive a lot of information on the various existing products and not only written but also visual support which

makes choosing the right product even more convenient and easier. [6][8]

However, one potential disadvantage of digital visual support could be that it might not reflect the product or

its quality accurately enough. Customers may therefore order something which might not live up to the

customers' expectations leaving customers dissatisfied. This in turn could hinder home24 to create a loyal

customer base.

An extension of their already existing showrooms in big cities could help their customers in order to counteract

the potential risk mentioned concerning visual support. More showrooms could also increase the chances of

purchasing products as people tend to prefer seeing and trying furniture products in real life. The merger with

the retailer XXXLutz could be a big opportunity for home24 to showcase products of its brands at more point

2

of sales giving that the target group fits the one of XXXLutz customers. It also reduces the dependability on

–

its e-commerce platform as home24 can now easily extend the connection of both buying online and offline

– to meet all its customer segments desires and needs and create a well-connected shopping experience.

The 24/7-availability of the company combined with its own delivery team, is another value that helps the e-