Delicious Nutritious Markets (DNM) is a startup founded by Michael Johnson and Ben Thomas, working to revolutionize the way micro-markets work by adding healthy options and convenient payments. Micro-markets are fully customizable, self-operating, on location shoppes offering food, beverages, and non-food items. Micro-markets are ideal for offices, apartment buildings, hospitals, gyms, and many other locations.
After extensively researching food options available to the current corporate environment, Mike and Ben got a “taste” for the potential impact micro-markets could make in this area. It became clear that combining the concept of tailored convenience food centers with healthy products would fill a great need.
However, delivering the technology to drive this innovative product had several challenges.
First, they needed a better payments solution that would allow users to quickly and easily pay for their purchases. DNM reviewed multiple available options but weren’t satisfied with any of them and decided that they would need to build a custom solution.
But custom mobile ecommerce solutions can be complex and expensive to build. Additionally, they needed a way to keep track of all their orders and have an inventory management system that would be keep track of their inventory at multiple markets, and have everything be integrated with their ecommerce solution.
Finally, while they had a great long-term vision for the product, they needed to be able to build a working prototype as quickly as possible to start signing up locations where the micro-markets would be located. And they needed to be able to rapidly iterate on the product in response to feedback from partners and customers.
Michael and Ben approached me about building out the initial version of the technology platform that would power the Delicious Nutritious Markets and helping them solve some of the complex technological and user experience issues they were facing.
After reviewing the overall business goals and strategy with them, there were two major pieces of the architecture that we needed to plan out and build: the backend server application, and a mobile application for consumers to use when purchasing from the markets.
First, we built a mobile application to allow consumers to pay for their purchases from their phone just by scanning the barcode on the product with their camera. To cut down on the hassle of typing in a credit card the first time you use the app, we integrated technology to allow the user to add their credit card number just by taking a picture of the card. Future orders use the user’s saved payment information, which allows for purchasing items from the app with just a few quick taps. Here are some screens from the first prototype of the mobile app:
Next, we built a backend server application to power the mobile app, and to serve as an order management system. We integrated this backend server with a third-party inventory management system to keep track of the changing inventory levels at each market as purchases are made, and as the items are restocked:
We also integrated the mobile app and the backend server with a payment processor (Stripe) to allow for quick and secure credit card payments:
So when a user at a market checks in to that location, we grab the current inventory levels from our 3rd-party inventory system and send them to the user’s mobile device. Then the user selects several items and goes to checkout. We securely send their payment info to Stripe for the payment processing, send the details of the order to the inventory management system so that the stock levels can be updated accordingly, save the order details in our order management system, and send the user a receipt.
Developing complex custom software always has surprises and unexpected issues, and this is especially true within the world of startups. A key part of my consulting practice is to build with an eye towards flexibility and agility, to allow us to rapidly iterate and respond to changing market conditions or business strategy developments.
For example, two significant changes occurred during product development for DNM that changed the nature of how the product worked.
First, while users loved the ability to quickly pay for purchases from their mobile device, it became clear that a permanently-installed kiosk device was necessary at the micro-market location for users who didn’t have a compatible mobile device, or who preferred to just make a one-time transaction instead of installing the app.
After going through options with the DNM team, we developed a modified kiosk version of the DNM mobile app that runs on a tablet device and has hardware integration with a laser barcode scanner and credit card swiper. This modification allows anyone to walk up to a Delicious Nutritious Market, quickly scan their purchase at the onsite kiosk device, and then swipe their card to complete the purchase:
The other significant change that occurred during development was the addition of third-party vending operator partners. Originally, DNM planned to own and operate their own markets, but the overwhelming industry response to their product quickly convinced them that there was a huge opportunity available by partnering with existing vending and micro-market operators to bring the DNM platform to a wider audience.
That change meant that the product needed to be redesigned to work as more of a marketplace product, accepting payments from a consumer on behalf of the micro-market operator who owns the location where that consumer is making the purchase, and then remitting that payment to the operator once it has been collected.
These kinds of marketplace payments can be especially complex, not just technically, but for legal and accounting reasons. Additionally, the entire product had been built with the simpler model where DNM owns all the market locations, and the model is: “consumer pays us for purchase, we process their payment and collect the money, and we’re done.” Moving to a model where the different micro-market locations are owned by a variety of third-parties, and we’re processing payments on their behalf and remitting payment to them on a scheduled basis was much more complex.
Fortunately, we were prepared for the rapidly changing requirements startups often have to deal with, so we had been building the product with an eye towards flexibility, and we made this technical shift over the course of a few weeks. We also were able to leverage an offering from our payment processor (Stripe Connect) to dramatically simplify the technical, legal, and accounting risks with this approach.
As a result of our engagement, the DNM technology platform is currently powering markets at several pilot locations, with several dozen more set to go online in the coming months. Users love the simplicity and convenience of being able to quickly and easily buy healthy, nutritious snacks and drinks right from their phone.
More importantly, DNM has a strong technology foundation to grow their business from in the future as they rapidly expand nationwide.