Our client is Convenio, a US based company that operates a number of micro convenience stores and vending machines throughout the country. Convenio is considering the launch of a new product to enable convenience in passenger transportation and is seeking McKinsey’s help to determine whether or not that’s a good idea to grow their convenience business.
Convenio’s new value proposition is a mobile convenience store that is installed in the middle console of taxis, or private cars for ridesharing, called 'Moove'. It's a transparent box that is typically stocked with small snack items, such as chewing gums, chocolate bars, cooled drinks, but also non-food items such as personal hygiene products or phone chargers. The customer purchases an item by scanning a QR code, selecting the item, and completing the transaction via the Moove platform online. The driver then receives a confirmation and hands the article to the rider, earning a commission with each sale. Drivers will carry limited stock of products in their trunk and re-stock in selected locations through Convenio’s existing supply chain network. The CEO of the company is seeking McKinsey’s help in determining the attractiveness to pursue this business in the US.
If you were staffed on this project, what factors would you expect to be important to work on (and why) to set Convenio and the new Moove brand up for successful growth?
The company ran a pilot and partnered up with 20 drivers from a platform-based ride hailing company. Driver partners had the box installed in their car for a period of 3 months, during which time they offered the full Moove service to their riders. The results are shown in the exhibit. What can you take away from the overview?
The team currently working on this project is interested in projecting certain growth milestones. If a typical driver had 8 rides a day per day, how many drivers would the company need to partner with in Year 1 to achieve sales of at least 1,000,000 US$, assuming drivers offer their services 200 days in any given year?
This exhibit shows different cost items for the operation. Assuming that the Convenio wants its Moove business to generate a 10% profit margin, in what year will this be achieved assuming that the Year 1 goal will be achieved and drivers under contract grow by 10% a year?