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Category: EcommerceTrends

EcommerceTrends

  • Uber CEO Says ‘Eats’ Growing At Unprecedented Rate

    Uber CEO Says ‘Eats’ Growing At Unprecedented Rate

    “The Uber Eats business continues to grow at unprecedented rates,” says Uber CEO Dara Khosrowshahi. “Revenue has almost tripled year on year. That business continues to accelerate. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.”

    Uber CEO Dara Khosrowshahi says that Uber Eats is growing at unprecedented rates during the pandemic and he expects the business to do well post-pandemic as well:

    Uber Eats Growing At Unprecedented Rate

    On the Uber Eats side, it is an entirely different story where the business continues to grow at unprecedented rates. Revenue has almost tripled year on year. That business continues to accelerate. When we look at Eats we are seeing some great trends. The monthly actives on Eats are up 70% on a year on year basis. The trips are up 110% on a year on year basis. New orders, orders per eater, or basket sizes, all of these trends are up double-digit.

    We’ve taken a look at Eats’ performance in markets that are opening up such as New York City and we haven’t seen any kind of performance degradation in Eats. What that suggests to us is that there is a whole new class of consumer that’s experiencing the delight of being able to pick anything and have it delivered within 30 minutes and eat what you want how you want it. It looks like the Eats business is sticky. I wouldn’t count on the growth rates we are having now post-pandemic. However, I do think that you are going to have big growth rates off of a much larger base as a result of everything that has happened.

    As Cities Open Up Uber Opens Up

    It really is impossible to tell when the mobility business can come back. It depends entirely on the health situation on the ground. With markets that are opening up faster because of the health situation or the society, things are coming back. For example, we looked in New York City where the counts have been down relative to the rest of the country and in just October our volumes were 63% of pre-pandemic levels. This is materially higher than they were in the rest of the nation.

    You have week-day use cases of the service outside of commute that is now at pre-pandemic levels or higher. As cities open up Uber opens up as well. We actually think that we can be a beneficiary of certain trends that we’re seeing.

    We have invested in safety such as digital mask verification. We also have the No Mask No Rides advertising campaigns. People are feeling safer using Uber. Our reliability and predictability are absolutely unrivaled. While we look at share and we always want to make sure that we are competitive really what we focus on is the reliability of the service and safety of our drivers and hopefully coming back as the health situation improves.

    Vaccine Could Radically Improve Bookings

    There is a pretty consistent improvement in the mobility business as you go month to month to month. This is one of the benefits of having a truly global business. Within that steady improvement, there are all sorts of ups and downs. Hong Kong has had some openings and closings. Obviously, Europe is now going through another shutdown. US case counts are moving up. The individual curves are not smooth. But when you look at our global portfolio it smooths out.

    We are seeing a month to month improvement. For example, if you look at our last quarter overall gross bookings were down 50%. In September, the last month of the quarter, they were down only 44%. You just see this kind of consistent improvement. We think that the consistent improvement will continue into next year. We think a vaccine could radically improve the slope of that improvement.

    Uber CEO Dara Khosrowshahi Says ‘Eats’ Growing At Unprecedented Rate
  • COVID-19 Continues to Reshape Advertising

    COVID-19 Continues to Reshape Advertising

    The Interactive Advertising Bureau (IAB) has released a report demonstrating how much COVID-19 has impacted advertising.

    As the coronavirus pandemic began impacting businesses, advertising was one of the areas hardest hit. The IAB conducted a survey of 242 companies to see how the pandemic has changed advertising, and how it will continue to do so going into 2021.

    In a bit of good news for the industry, the IAB projects that digital advertising will see an overall increase of 6% in 2020, compared to 2019. That’s where the good news ends, however, as overall advertising across all mediums is expected to drop by 8%. Traditional media advertising is to blame for the drop, experiencing as much as a 30% decline.

    Looking ahead to 2021, as much as 70% of businesses have ballpark estimates of their budget at best, are not clear or have no idea how much they plan to spend. Those buyers that do have some idea of their 2021 budget, plan to spend 5.3% more than in 2020.

    While the pandemic continues to take an obvious toll, one thing is clear: digital advertising is coming into its own as a result.

  • Amazon Will Start Paying Customers For Data On Non-Amazon Purchases

    Amazon Will Start Paying Customers For Data On Non-Amazon Purchases

    Amazon has launched Amazon Shopper Panel, a program that will pay users for information on their non-Amazon purchases.

    In addition to sales, one of the biggest benefits Amazon gains is access to customer and purchasing data. For purchases made outside Amazon, however, the company is largely in the dark.

    To address that, Amazon has unveiled Amazon Shopper Panel. The program “is an opt-in, invitation-only program where participants can earn monthly rewards by sharing receipts from purchases made outside of Amazon.com and by completing short surveys.”

    The company emphases its commitment to privacy, promising that Amazon only receives information that panelist explicitly share, and that panelists can stop at any time. In addition, panelist have the option to delete any previous receipts, and Amazon automatically deletes sensitive information, such as prescription receipts.

    At this time the program is only available to a limited number of users, but those interested can join a waitlist to be informed when it becomes more widely available.

  • Uber Eats To Essentially Power World Commerce, Says CEO

    Uber Eats To Essentially Power World Commerce, Says CEO

    If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.

    Uber CEO Dara Khosrowshahi discusses how Uber Eats is going to ‘essentially power world commerce’ in a Zoom call with the Wall Street Journal:

    If there was a time to lean into delivery, this is the time,” We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.

    The food delivery business is profitable in certain countries. For example, two of our top five international markets are profitable today and were profitable last quarter. The profitability really depends on how hard we are leaning in toward expanding supply and acquiring customers. The perspective that we have on this business is that even though it’s growing it’s actually very early in its development.

    For example, Japan is a huge market potential for us and one of our leading growth markets. Less than ten percent of restaurants in Japan are signed up to use Uber Eats as a delivery service. When you have a situation where your penetration is ten percent of the ultimate market size you lean in as a company.

    We are fortunate in that we’ve got very strong balance sheets, over $7 billion in cash and available capital. That allows us to lean into certain businesses. If there was a time to lean into delivery, this is the time. We’re going to be the global leader in that business. We’re going to expand beyond food into other categories such as groceries and pharmacy, essentially powering world commerce.

  • Massive Shift to Online Shopping… And It’s Permanent

    Massive Shift to Online Shopping… And It’s Permanent

    A survey about online shopping habits indicates that the massive shift to online shopping during COVID will continue after COVID. The increases in online shopping because of closures and fear are expected to be permanent.

    A new study from the secure payment solution provider PCI Pal shows that millions of Americans have become online shoppers during COVID and that this behavioral shift will last long beyond the COVID-19 era. With over 70% of respondents reporting plans to continue shopping online for some or most of their shopping even after the COVID-19 pandemic is over.

    “Retailers face an unpredictable and unexpectedly challenging year due to the COVID-19 pandemic,” said Geoff Forsyth, CISO, PCI Pal. “What they can control, however, is delivering a seamless, secure shopping experience in-store and across digital shopping channels to offer customers much-needed peace of mind this holiday season.”

    A few other trends for retailers to pay attention to:

    • New year, same habits. Despite 2020 bringing many changes and unexpected turns, one thing remains constant: consumers’ loyalty. 86% of respondents reported they still plan to shop with their same favorite retailers this holiday season, with 54% planning to do so online and 32% in-store.
    • Sincerely Securely, Santa: It’s no surprise that data security is a top concern for consumers going into this holiday season, with 60% of those surveyed reporting they feel more concerned about their data security as a result of COVID-19. However, one slip-up from a business could have more dire consequences than ever before: 70% of respondents reported they would stop shopping with a brand for a few months or even permanently if it suffered a data breach ahead of the holidays.
    • Safety supersedes security: While 70% of consumers plan to continue shopping online after COVID-19, some still feel uneasy about how it could impact their personal data security. Nearly 20% of consumers perceive online shopping as the least secure method for making purchases, while in-store shopping is still seen as the most secure by 57% of respondents. If online shopping is the future, then businesses must take steps to ensure their customers feel as secure shopping on their website as they do in-store.
    • The social shopping dilemma: Given new features on Facebook and Instagram, consumers are increasingly turning to social media for their shopping. According to research from Salesforce, purchases from a social channel referral saw big increases in Q2 2020, growing 104% across the entire industry. Yet, just like online shopping, consumers feel insecure shopping on these platforms: 46% of respondents reported they find social media to be the least trusted shopping channel. It seems that when it comes to their sensitive financial information, consumers are not yet ready to divulge their credit card information on social media.
    • Customer experience should be on Santa’s “Nice” list: Just as shopping has shifted online, so, too, has the demand for excellent customer service. With a majority of respondents reporting a preference for email (about 36%) or phone (33%) for their customer service needs, retailers will need to ensure that both of these channels are set up to offer a smooth customer journey.
  • Zoom COO: Transaction Fees Possible For New OnZoom Service

    Zoom COO: Transaction Fees Possible For New OnZoom Service

    Zoom COO Aparna Bawa says that Zoom is open to experimenting with transaction fees for its new OnZoom service targeting video delivered services like piano lessons.

    “We still are watching and waiting to see what the economics look like,” said Zoom COO Aparna Bawa at WSJ Tech Live. “We want to make sure that the customer base that we’re serving finds it helpful, it’s priced at the right point, it’s beneficial to all,”

    When asked about getting a cut of online video services Bawa said: “We’re not quite sure how that’s going to work. “For us, it’s a long game. The more and more we can build our user base and establish trust with folks like you, the more sort of legs we have as a company.”

    OnZoom, currently in beta, is a service for paid Zoom users to create, host, and monetize events like fitness classes, concerts, stand-up or improv shows, and music lessons on the Zoom Meetings platform.

    “We were humbled and inspired by all of the amazing ways the world adapted to a literal shutdown of in-person events amid COVID-19,” says Zoom product manager Aleks Swerdlow. “When business owners, entrepreneurs, and organizations of all sizes had to find some way – any way – to stay the course and continue providing services to their customers, many turned to Zoom. OnZoom simplifies that experience.”

    In short, OnZoom is Zoom for paid events or services. It has the potential to vastly increase Zoom revenues by tapping into entrepreneurs and small businesses that want to provide a service specific to individuals or groups and not just give it away on YouTube. Think personalized Yoga training, tutors for your kids, computer support, and cooking classes personalized to you. It also includes event discovery features and can be used for free events as well.

  • Alibaba Buys Top China Hypermarket In War With Walmart

    Alibaba Buys Top China Hypermarket In War With Walmart

    Alibaba today announced it will invest $3.6 billion in Sun Art Retail Group, a huge hypermarket and supermarket operator in China. Sun Art is the largest retailer in China and competes head to head with Walmart. The transaction will give Alibaba a 72% controlling interest in the China-based brick and mortar retailer. Alibaba says that this purchase furthers its ‘New Retail’ strategy of integrating online and offline retail in China.

    “Alibaba’s strategic investment in Sun Art in 2017 was an important step in our New Retail strategy,” says Alibaba CEO Daniel Zhang. “The alliance we formed with Auchan Retail and Ruentex was instrumental in building a robust infrastructure to create opportunities and value in China’s retail sector. Led by Chief Executive Officer Peter Huang, Sun Art has achieved impressive results in its digitalization and pursued promising synergies with businesses across the Alibaba digital economy. As the COVID-19 pandemic is accelerating the digitalization of consumer lifestyles and enterprise operations, this commitment to Sun Art serves to strengthen our New Retail vision and serve more consumers with a fully integrated experience.”

    In 2017 Alibaba entered into a strategic alliance to digitalize and introduce New Retail solutions at Sun Art stores. The company says that since then “Sun Art has made significant progress in the digital transformation under a fast-changing market environment by leveraging resources and technology from the Alibaba ecosystem, to capitalize on the growth opportunities in China’s hypermarket and supermarket space.”

    This acquisition reflects a growing retail trend in China. Euromonitor International said in a report earlier this year that merger and acquisition activities are expected to continue in the forecast period. As China’s retailing industry modernizes it is undergoing a drastic digital transformation. The forecasting firm also said that sun Art held a 14.1% share of the country’s hypermarket sales last year. That compares to Walmart’s 10.3% market share in that category.

    As of June 30, 2020, Sun Art operates 481 hypermarkets and 3 mid-size supermarkets in China, with a focus on strengthening its position through small and offline community stores.

    Here is the official joint announcement of the acquisition.

  • Disney: Less Theaters, More DTC

    Disney: Less Theaters, More DTC

    “We’ve benefited from a tremendous relationship with theatrical exhibition for many years,” says Disney CEO Bob Chapek. “However, there are a lot of consumers that want to experience a movie in the safety, comfort, and convenience of their own home. We want to accelerate our transition to a real direct-to-consumer priority company. Ultimately, the consumer is going to be making the decision in terms of how they consume our media as opposed to some arbitrary decision that we may make from a distribution standpoint.”

    Bob Chapek, CEO of Disney, discusses how Disney is transitioning to a direct-to-consumer company with less focus on the theatrical distribution of video content:

    Accelerating Transition To Direct-To-Consumer Company

    We want to accelerate our transition to a real direct-to-consumer priority company. We’ve got the opportunity to build upon the success of Disney+ which by almost any measure has been far and above anybody’s expectations. We really want to use this to catalyze our growth and increase shareholder wealth. In every territory and every platform, our expectations with Disney+ have been exceeded and exceeded every month. We’re thrilled with the way it’s going. We just think that this reorganization is going to catalyze growth even further.

    I would not characterize (our reorganization) as a response to COVID but COVID accelerated the rate at which we made this transition. This transition was going to happen anyway. Essentially, what we want to do is separate out the folks who make our wonderful content based on tremendous franchises from the decision making in terms of where the prioritization is and how it gets commercialized into the marketplace.

    We want to leave it to a group of folks who can really see objectively across all the constituents that we have and the various different considerations that we’ve got and make the optimal decision for the company. This is as opposed to somehow having it be predetermined that a movie is destined for theaters or that a TV show is destined for ABC. So really what we want to do is provide some level of objectivity and really make it a decision that benefits the overall company and its shareholders.

    We’re Putting The Consumer First

    What it says is that we’re putting the consumer first. The consumer is actually going to be who’s going to make this decision. They’re going to lead us with how they make their transactional decisions. Right now, they’re voting with their pocketbooks and they’re voting very heavily towards Disney+. We want to make sure that we’re going the way that the consumers want us to go.

    Certainly, COVID has impacted all of our traditional distribution businesses. But this is even more than reactionary, this is really progressive. This is looking out with a vision towards where we see the world going and how we see that consumers are interacting with Disney+, ESPN+, and Hulu and where it’s going to go in the future in our international business with Star. We’re trying to as they say skate to where the puck is going to be.

    Less Theaters, More DTC

    We’ve benefited from a tremendous relationship with theatrical exhibition for many years. As dynamics change in the marketplace though we want to make sure that we’re giving consumers who want to go to theaters, to experience everything that a theatrical release can give them, we want to make sure that we continue to give them that option.

    At the same time, there are a lot of consumers that want to experience a movie in the safety, comfort, and convenience of their own home for whatever reasons they do. We want to make sure that we put the consumer first. Ultimately, the consumer is going to be making the decision in terms of how they consume our media as opposed to some arbitrary decision that we may make from a distribution standpoint. We want to look at ourselves as consumer enablers.

    Disney: Less Theaters, More DTC

  • Lyft Co-Founder Says Rides Are Still Down 50%

    Lyft Co-Founder Says Rides Are Still Down 50%

    “The impact of the pandemic to us in the broader market is rides being down about 50% now,” says Lyft co-founder and President John Zimmer. “They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic.”

    John Zimmer, co-founder and President of Lyft, discusses the impact of the pandemic on Lyft, noting that daily rides are still down by half since March 2020:

    Lyft Rides Still Down 50%

    Drivers 4 to 1 want to remain independent contractors and want to retain flexibility. Depending on the market, 80 to 90% drive less than 20 hours a week. We think there is a much better way forward than saying (in California) that everyone should become employees. That way forward is to say let’s retain the flexibility and let’s add more protections and benefits like we are pushing for in California.

    The impact of the pandemic to us in the broader market is rides being down about 50% now. They were down 75%. So we are halfway recovered across the board. That impacts individual drivers as well. If you look at how some drivers have shifted, we actually have higher driver earnings now per hour than even pre-pandemic. There’s equilibrium between demand and supply, between riders and drivers.

    Impact Of Lockdowns And The Virus Is Real

    The impact to the broader economy and the impact with lockdowns and the virus is real for our business. Transportation is directly tied to people’s movement and the broader economy. That said, we’ve continually week over week seen incremental improvements going from negative 75% to now above 50%.

    We see markets like Toronto back to 80% of where we were before. As countries get better and as states get better at living with the conditions we have because of the virus I see continued improvement. Driver earnings per hour are higher today than they were pre-pandemic. We are looking right now for more drivers.

    Regulation Has Been Part Of Our History From Day One

    Regulation has been a part of our history from day one. We are as much in the transportation business as we are in the technology business and transportation historically has been a regulated industry. Within our first year of operation, we worked with California regulators to create a new category for regulation.

    It’s been part of our business and will always be part of our business. It’s part of how we think about the path to profitability but we are just moving forward on that path despite anything that is going to change around us in terms of regulation.

    Largest Bike-Share Program In North America

    We also have a diversified set of transportation that we offer. We have the largest bike-share program in North America with City Bikes in New York City and Bay Wheels in the Bay and Divvy in Chicago. Our bike systems are in many cases above where they were pre-COVID. They are a great way to get around and get some fresh air and not be next to someone else.

    Lyft Co-Founder John Zimmer Says Rides Are Still Down 50%
  • Bed, Bath, & Beyond Doubling Down On Digital

    Bed, Bath, & Beyond Doubling Down On Digital

    “We really doubled down on digital,” says Bed Bath & Beyond CEO Mark Tritton. “We weren’t easy and we weren’t convenient. Life’s tough at the moment and you really want to make it simple, easy, and frictionless for customers. The introduction of BOPIS (buy online, pick up in-store), curbside, and now same-day to really facilitate ease and frictionless shopping starting with digital or in-store, wherever the customer wants to go.”

    Mark Tritton, CEO of Bed Bath & Beyond, after releasing their earnings report discusses how the company is driving success by leveraging digital with frictionless brick and mortar stores:

    Doubling Down On Digital

    Our (6 million) new customers coming on board are about six years younger which is great news for us as we expand our customer profile. The key to that is our omni-always strategy. We talk about understanding our customer, how they shop today, and this was pre-COVID. Even more important, we know that 80% of our customers pre-shop online and either purchase there or go to store.

    We had a really broken paradigm. We had a fantastic digital business that was very large. We did about $1.8 billion last year. We already beat that by this time this year. We’re large, but we are growing. We really doubled down on that digital aspect. But we weren’t easy and we weren’t convenient. Life’s tough at the moment and you really want to make it simple, easy, and frictionless for our customers.

    Stores Are Key To Profitability

    So we looked at our website and our integration with our stores which is an ability to leverage our store asset and connect those strongly to an omni environment. It’s really worked out. The introduction of BOPIS (buy online, pick up in-store), curbside, and now same-day to really facilitate ease and frictionless shopping starting with digital or in-store, wherever the customer wants to go.

    We know that if we have a digital side that is BOPIS, curbside, or same-day, our margin is actually equivalent to a store. We are driving behaviour, driving engagement, and driving those three assets. That’s helping to leverage out our gross margin. As we rapidly expand our digital business the stores are a key to this profitability.

  • Amazon Announces ‘Climate Pledge Friendly’ to Aid Sustainable Shopping

    Amazon Announces ‘Climate Pledge Friendly’ to Aid Sustainable Shopping

    Amazon has announced a new initiative, Climate Pledge Friendly, to help customers shop for sustainable products.

    Amazon has increasingly been under fire from its own employees for a perceived lack of effort toward addressing climate change. This included a “climate strike” in 2019, when hundreds of employees walked out. The efforts appear to have made an impact, as Jeff Bezos pledged $10 billion to fight climate change in early 2020, and now Amazon has unveiled its new initiative.

    Climate Pledge Friendly labels will appear on some 25,000 different products across a host of categories, including grocery, household, personal electronics, fashion and beauty, to name just a few. In order to receive the label, a product will need to have at least one of 19 sustainability certifications. A number of brands have gotten onboard, including Seventh Generation, Burt’s Bees Baby, Mrs. Meyer’s and HP.

    “Climate Pledge Friendly is a simple way for customers to discover more sustainable products that help preserve the natural world,” said Jeff Bezos, Amazon founder and CEO. “With 18 external certification programs and our own Compact by Design certification, we’re incentivizing selling partners to create sustainable products that help protect the planet for future generations.”

  • Harnessing The Power Of Mobile Communication For Your Business

    Harnessing The Power Of Mobile Communication For Your Business

    As technology changes so does the way we interact with each other. Before smartphones and ordering online, popping into a shop to search for a particular item or calling around to find it before heading out were both common things to do. The internet and later smartphones changed all that. Now we have access to whatever information we need right at our fingertips at all times. If we are searching for something hard to find we can simply order it online. If we are planning to go purchase something in person or we want more information about an item before we buy it, we often consult our smartphones for further information rather than asking a store employee for help. In fact, even before the COVID-19 pandemic, 69% of people would rather search for information on their phones instead of asking for help from a store employee, and the pandemic has just made this practice all the more practical.

    All the information and technology we carry around in our pockets has changed the way we interact with the world. We send text messages and emails more frequently than calling now and if we don’t know something it’s just a matter of knowing how to find it. With the spread of the pandemic accessing information has become even more crucial. We can look up mask policies and procedures before we go to a business, find out if a business has special hours for those with disabilities and the elderly, and look up every-changing hours and services.

    Consumers And Mobile Communication

    Before the pandemic, 81% of consumers used mobile to manage finances, while 79% used mobile to make online purchases. Any why wouldn’t they? The days of getting up and going to the computer every time you wanted to look something up, pay a bill online, or buy something are long over.

    Increasingly, stores are giving information to consumers that they have never given out before. One of the things customers can look for online with many businesses is not only where an item is located in a store, but also how many of that item are in stock at any given time. Customers want accurate information and they want it now, as their time is becoming more valuable than ever. What’s more, knowing you will find what you are looking for before you leave the house is actually pretty critical during the age of social distancing.

    Mobile Communication In Retail

    Communicating with customers is changing thanks to the mobile revolution. Answering phone calls from customers is no longer the main interaction with them. In fact, 85% of those who own smartphones prefer text messages to calls or even emails, which means that businesses that aren’t responsive to this type of communication are likely missing out on customers.

    55% of people ignore marketing emails because they get too many emails, and 29% never listen to voicemail. On the other hand, 90% of people open a text message within minutes. In fact, there is a:

    Before the COVID-19 pandemic 68% of businesses were already using some form of messaging to connect with their customers. This placed them in a considerably better position when the pandemic hit because they already had the infrastructure in place to meet the changing needs of customers in response to social distancing.

    Now customers need information before they show up to a business, and mobile messaging is the way they often prefer to receive it. Curbside pickup has doubled since last year and 59% of customers plan to continue using it after the pandemic passes, and this service is made possible through the use of mobile messaging.

    Mobile Communication In Foodservice

    Mobile ordering and messaging has also been a boon to restaurants since the start of the pandemic. In many places restaurants have only been open for takeout orders, so having apps and messaging abilities for taking orders and telling customers when their orders are ready has helped them to run on a skeleton crew while making the changes necessary to function as a takeout only business.

    In March of this year pizza deliveries went up 44% in a single week, and many companies used online ordering and mobile communication to ensure contactless deliveries.

    As restaurants begin to reopen with new social distancing guidelines in place, mobile messaging helps to keep communication going for reservations, when tables are ready, and more.

    Mobile Communication In Medicine

    Accessing medical services has been challenging because of the pandemic, and early on laws were relaxed to allow people to access telehealth services. In order to make the transition easier for medical providers and patients alike, all messaging and video call services were allowed so that doctors could get care to those who needed it via whatever means they were able to use. Teladoc saw a 50% increase in use in the first week alone.

    Mobile messaging can be used for appointment reminders, prescription refill verifications, and more, and 72% of organizations plan to implement more and better digital customer experiences throughout the rest of 2020.

    Mobile Communication In Customer Service

    When it comes to customer complaints, nothing makes customers angrier than sitting on hold for hours waiting for their call to be answered, which makes it not the best way to solve customer complaints to begin with.

    Chats and mobile messaging give customers the ability to initiate contact and then do other things while they await a response. It’s a much less stressful way to deal with contacting customer service, and it’s a lot more effective than airing out grievances on social media, which can come back around with undesirable consequences later on.

    But text messaging has to go both ways. It’s not enough to send marketing messages via SMS, businesses also need to be able to respond to messages they receive. One in three customers report sending a message to a company and never hearing back from them, and in many cases it is simply because the company has not enabled two way messaging.

    65% of customers have positive feelings toward businesses that offer messaging as a means of communication, likely because it shows the company respects the customer’s communication style and choices.

    Harnessing The Power Of Mobile Communications

    Customers say that businesses that offer messaging respect their time, which makes them more likely to choose to do business with that company. It also means those happy customers are more likely to recommend that business to friends and family.

    As technology changes, the ways that businesses interact with customers have to keep up with the times. The first rule of customer service is to meet customers where they are, and if that means hanging up the phone and sending out a text message that’s how it has to be.

    Mobile communication is likely to hinge on SMS messages for some time to come, and businesses that aren’t already using this method are missing out on business. Is your business ready to harness the power of mobile communication?

  • Slice CEO Leading Digital Transformation Of Pizzerias

    Slice CEO Leading Digital Transformation Of Pizzerias

    “We want to make sure that 70 to 80 percent of the volume for pizzerias is digital., says Slice CEO Ilir Sela. “This is very comparable to Domino’s and Papa John’s and other big chains. We’ve got to lead the digital transformation of these small businesses. We bring technology and marketing and we enable the existing operation of the pizzeria. We make them more efficient and we make these Pizzerias really powerful and valuable.”

    Ilir Sela, CEO of Slice, discusses how the Slice app is driving the digital transformation of small pizzerias so that they can compete effectively with the national pizza chains:

    Leading Digital Transformation Of Pizzerias

    We take a merchant friendly approach because we really believe in the power of small business and the American dream. I am third generation in the pizza industry. My family consists of a ton of entrepreneurs who mostly opened up small business pizzerias. The goal for us was to make sure that as digital becomes an important component of their business that it doesn’t cannibalize the physical location.

    So we take a digital-first approach in a way that means we want to make sure that 70 to 80 percent of the volume for these pizzerias is digital. This is very comparable to Domino’s and Papa John’s and other big chains. In order to do that you have to take a long-term view and you’ve got to take a merchant friendly view around loyalty and online ordering. Obviously, in order to do that we’ve got to run the playbook. We’ve got to lead the digital transformation of these small businesses.

    All Pizzerias Need To Digitize Their Platforms

    We are actually an all-in-one platform where we partner with a small business in order to digitize their operation. We are not a logistics company ourselves. We empower small businesses to have what we call first-party delivery. In a way, that’s been done forever. Small business pizzerias have delivered across the entire country for decades and they’ve made it work incredibly well.

    The reality is that in the world of COVID and as we go further into the 2020s, all these pizzerias really need to digitize their platforms in order to become more efficient. What we do is we bring technology and marketing and we enable the existing operation of the pizzeria. We make it more efficient and we make it really powerful and valuable.

    Slice CEO Ilir Sela Leading Digital Transformation Of Pizzerias
  • Walmart+ Goes Head To Head With Amazon

    Walmart+ Goes Head To Head With Amazon

    Walmart launches Walmart+ a subscription service that competes directly with Amazon Prime and costs only $98 a year or optionally $12.95 a month. Walmart’s membership option is now available to customers across the country. Membership includes free 15-day trial period.

    “We can’t wait for customers to use Walmart+ as a way to keep more time on their calendars and money in their pockets,” said Janey Whiteside, chief customer officer, Walmart. “We designed Walmart+ to be the ultimate life hack for customers, pulling together benefits they told us would be most helpful to them today and in the future. Its usefulness will only grow from here.”

    The initial list of Walmart+ benefits is below. The company says that the list of benefits will continue to grow over time:

    • Unlimited free delivery: In-store prices as fast as same-day on more than 160,000 items from fresh produce, to milk, eggs and bread to tech and toys to household essentials. This service was previously known as Delivery Unlimited – a subscription service that allows customers to place an unlimited number of grocery deliveries for a low, flat yearly or monthly fee. Current subscribers will automatically become Walmart+ members.
    • Scan & Go: Unlock Scan & Go in the Walmart app – a fast way to shop in-store. Using the Walmart app, customers can scan their items as they shop and pay using Walmart Pay for a quick, easy, touch-free payment experience.
    • Fuel discounts: Fill up and save up to 5 cents a gallon at nearly 2,000 Walmart, Murphy USA and Murphy Express fuel stations. Sam’s Club fuel stations will soon be added to this lineup.

    Bill Simon, former CEO of Walmart, discusses the launch of Walmart+ designed to take on Amazon by combining free delivery of groceries and general merchandise within a paid subscription service:

    Walmart+ Goes Head To Head With Amazon

    Walmart has long coveted a subscription service to go head to head with Amazon. They tried three or four times but this one is different. Walmart+ combines both their grocery and their general merchandise strength which is really trying to recreate the supercenter online through a subscription service. If they can use the frequency of their food business to also help sell their general merchandise line they can mix it out better and hopefully get to profitability sooner.

    Retail has actually been better (this last quarter) than most people have expected. It’s not been even. There have been categories and retailers who have struggled. By and large, its help up pretty well. The pandemic accelerated digital ecommerce development by five to ten years. If you were not up to speed on that or didn’t get up to speed very quickly you would be behind. As we head into the fall it will be really interesting to see how it goes.

    Holiday Selling Season Uncertain

    Typically, Black Friday and Cyber Monday, that weekend has been really critical to the selling season. If you missed that it would be very difficult to have a really good holiday selling season. With the delayed openings now and Thanksgiving not on the line, the focus is going to be online and there won’t be as many in-person Black Friday deals. It’s going to be difficult for retailers to make up all that volume online. The holiday selling season is going to be a bit uncertain.

    I’m really speaking from the consumer perspective when I say that digital ecommerce accelerated by five to ten years in the last six months. It accelerated at that pace and people had to head in that direction. That is likely where retail is going to head but it is going to still be a mix. The vast majority of retail will remain brick and mortar but ecommerce will take a larger role in the facilitation by online pickup in store. Customers are now completely blending the omnichannel retail experience.

    The Amazon Effect: Digital Sales Rule!

    There’s also been really a change from an investment standpoint. This has been really more the Amazon effect than anything I can think of. Five years ago, it used to be, grow your profit faster than your sales and your share price would move forward. Now, if you’re not growing digital sales at a hyperactive rate it’s really hard to get a good valuation on your company. Walmart is a great example of a retailer employing this strategy.

    They’ve invested a ton of money, almost a third of their operating income they’ve given up in order to build an ecommerce business. Yet, investors have rewarded them by buying their stock. It’s near historic highs.

    Walmart+ Goes Head To Head With Amazon
  • What We’re Really Seeing Is the Integration of Bricks and Clicks

    What We’re Really Seeing Is the Integration of Bricks and Clicks

    “What we’re really seeing here is the integration of bricks and clicks,” says Cohen retail analyst Oliver Chen. “Target really hit the bull’s eye on their numbers. What stood out really was 195 percent ecommerce growth and using stores as hubs or fulfillment centers, particularly drive-up curbside pickup and reinventing the purpose of the store to integrate the whole shopping journey. As retail continues to evolve this whole fulfillment and stores plus digital will continue to be a huge theme.”

    Oliver Chen, Retail and Luxury Analyst at Cohen, and Michael Baker, Managing Director & Senior Retail Analyst at D.A. Davidson Companies discuss how ecommerce and physical stores are integrating:

    What We’re Seeing Is the Integration of Bricks and Clicks

    What we’re really seeing here is the integration of bricks and clicks. Target really hit the bull’s eye on their numbers. What stood out really was 195 percent ecommerce growth and using stores as hubs or fulfillment centers, particularly drive-up curbside pickup and reinventing the purpose of the store to integrate the whole shopping journey. What’s happening is that America really values convenience and Target’s done a great job being America’s easiest place to shop.

    Thinking about physical, mix with digital and instant gratification, same-day fulfillment has been a big deal. Customers want it all. They want physical, they want digital, they want groceries and hard lines. We’re also seeing this at-home revolution with home electronics doing really well too. These are all key themes. As retail continues to evolve this whole fulfillment and stores plus digital will continue to be a huge theme.

    Ecommerce Is No Longer a Bad Word

    The key is that ecommerce is no longer a bad word. If you think back a couple of years ago if you mentioned ecommerce the idea was to short all retail. It took some of these retailers a while to understand the investments in technology that needed to be made. But they’ve done it using the stores as assets instead of liabilities.

    Again, if you go back maybe five years ago the idea was if you had a store you’re in trouble. These companies through their technology investments have really proven that’s not the case. I do believe that investing in technology to drive your sales and your earnings is certainly the right thing to do for these companies.

    What We’re Really Seeing Is the Integration of Bricks and Clicks
  • Target CEO: Digital Growth Is Industry Leading – Up 200%

    Target CEO: Digital Growth Is Industry Leading – Up 200%

    “In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible,” says Target CEO Brian Cornell. “This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.”

    “Our second quarter comparable sales growth of 24.3 percent is the strongest we have ever reported, which is a true testament to the resilience of our team and the durability of our business model,” said Cornell. “Our stores were the key to this unprecedented growth, with in-store comp sales growing 10.9 percent and stores enabling more than three-quarters of Target’s digital sales, which rose nearly 200 percent.”

    “We also generated outstanding profitability in the quarter, even as we made significant investments in pay and benefits for our team,” noted Target’s CEO. “We remain steadfast in our focus on investing in a safe and convenient shopping experience for our guests, and their trust has resulted in market share gains of $5 billion in the first six months of the year.”

    The Company had comparable stores sales growth of 10.9 percent and digital sales growth of 195 percent. Total revenue of $23.0 billion grew 24.7 percent compared with last year, reflecting sales growth of 24.8 percent and a 16.6 percent increase in other revenue. Operating income was $2.3 billion in second quarter 2020, up 73.8 percent from $1.3 billion in 2019.

    Brian Cornell, CEO of Target, discusses their second quarter earnings report which saw the largest growth in the company’s history:

    Target Delivers Strongest Comps In 50 Year History

    I’ve been with Target now going on seven years. Obviously, this is a special moment for the team. It is a beautiful morning here in Minnesota. I’ve got to start by really recognizing our team. In the most challenging operating environment I’ve ever seen for this team to deliver the strongest comps in our 50 year history is pretty incredible. Our EPS was also a record high up over 80 percent. So to the 350,000 team members in the U.S. and in offices around the world these results were all about you.

    We continue to see strength across our entire portfolio. The strength that we saw in the second quarter, which we will break down in our earnings call later today, the fact that we saw really consistent strength from May into June and July. May was the strongest month with comps over 30 percent. But in both June and July we saw comps over 20 percent. That strength has continued in August and we are seeing low to mid-teen growth.

    Being Agile and Flexible Is Key To Our Success

    The biggest adjustment is probably the consumer who is still waiting for a signal around back to school. As you might imagine uniforms, backpacks, and school supplies are a little slower than last year. But the overall momentum and growth in market share continues as we go into the third quarter. The key to our success when I think about the second quarter is one, we’ve been true to our strategy, but our team has really focused on being agile and flexible and adjusting to the current operating environment. We’ve been changing the playbook every week.

    As we think about back to school as I’m sitting here today there are 56 million K-12 students that are waiting for direction. As of this week 66 percent of students will start remotely. They don’t know if they are going back into a classroom in September, October or if it’s going to happen in January. So we are going to have to extend the back to school season and make sure that we’ve got the items they need throughout the fall. We can adjust by market. We’ve got to be flexible and adaptable. That’s really been the key to our success so far this year in both the first and the second quarter.

    Digital Growth Is Industry Leading – Up 200%

    If you look at our results in the second quarter overall comps were up 24.3 percent. These are some of the strongest in retail. Our store performance is really for me a standout and probably one of the biggest surprises. This is in an environment where so many Americans are avoiding shopping in physical stores, our store comps were still up almost 11 percent. The investments we made in our team and in creating a safe shopping environment has built trust with the consumer. Certainly, our digital growth is industry leading at almost 200 percent.

    We’ve been taking share on a broad based basis from both specialty and department stores but also some of our traditional competitors including club. Category by category we’re gaining share. In categories like food and beverage and household essentials we were up 20 percent during the quarter. As Americans have been working and learning from home we’ve seen categories like electronics grow by 70 percent in the quarter. We’ve picked up significant market share from our electronic competitors. Our business and home categories were up over 30 percent.

    We Are Seeing Significant Market Share Gains

    Categories like decor, categories like domestics, what we are seeing with kitchen ware, we are continuing to build momentum and market share. We also saw a big rebound in apparel which was down almost 20 percent in the first quarter. It grew in the low teens in the second quarter. We are seeing significant market share gains. Across our business we are picking up share from our competitors whether they are specialty players, department stores, or our traditional retail competitors.

    The market share number of $5 billion is the most important number on the print. It just shows the relevance of our brand, the momentum, and the trust we are building with American consumers.

    Target CEO Brian Cornell: Digital Growth Is Industry Leading – Up 200%
  • Yelp: 61% Of Restaurant Closures Permanent

    Yelp: 61% Of Restaurant Closures Permanent

    By far, the hardest hit segment of the economy impacted by the forced government closures mandated by various state governor executive orders over the last six months has been restaurants. According to a Yelp COVID Impact Report, 61 percent of restaurants closed during the pandemic will never reopen. Remember, these are businesses that never should have closed in the first place considering that Walmart, Target, Kroger, and hundreds of so-called ‘essential’ businesses remained open.

    The obvious question that the media seems oblivious to is if social distancing and preventive measures could be implemented in the busiest of all retail establishments like Walmart, then why on earth couldn’t they have been implemented at restaurants, small businesses, and other chain stores also? In fact, they are being implemented now, months later, which proves that just like Walmart they could have been implemented six months earlier and saved thousands of businesses and jobs.

    “The restaurant industry continues to be among the most impacted with an increasing number of closures – totaling 32,109 closures as of August 31, with 19,590 of these business closures indicated to be permanent (61%). Breakfast and brunch restaurants, burger joints, sandwich shops, dessert places and Mexican restaurants are among the types of restaurants with the highest rate of business closures. Foods that work well for delivery and takeout have been able to keep their closure rates lower than others, including pizza places, delis, food trucks, bakeries and coffee shops.

    Yelp: Local Economic Impact Report – September 2020

    Yelp says that a total of 163, 735 business on Yelp have closed since the pandemic closure mandates and reopening restrictions started. Yelp focuses on restaurants, services businesses, and retail, many of which are locally owned and family-owned establishments. As one would expect, the mandates hurt these businesses very badly. In fact, according to the study, over 60 percent of all businesses that closed will never reopen. That equates to 97,966 businesses closed for good.

    The last Yelp Economic Average showed a decreasing number of overall closures, 132,580 in total. As of August 31, 163,735 total U.S. businesses on Yelp have closed since the beginning of the pandemic (observed as March 1), a 23% increase since July 10. In the wake of COVID-19 cases increasing and local restrictions continuing to change in many states we’re seeing both permanent and temporary closures rise across the nation, with 60% of those closed businesses not reopening (97,966 permanently closed).

    Yelp: Local Economic Impact Report – September 2020
    Yelp: Local Economic Impact Report – September 2020

    According to the Yelp report, Hawaii, California, and Nevada have the highest rate of total closures and permanent closures. They are also the three states with the highest unemployment rates. The states with the least business restrictions, West Virginia and the Dakotas, not so coincidentally, also have the lowest closure rates. The cities with the highest number of permanent business closures also tend to be in areas where the government has been the harshest on businesses imposing full closures for the longest periods and only allowing partial reopenings. The top five states with the most businesses closed are Los Angeles, New York, San Francisco, Chicago, and Dallas.

    Yelp: Local Economic Impact Report – September 2020
  • Amazon Now Playing Podcasts

    Amazon Now Playing Podcasts

    Amazon has entered the super hot podcasting arena, adding podcasts to their Amazon Music platform. All podcasts will, of course, be able to be accessed via Alexa, through its voice-activated Echo speakers, and are free to Amazon Prime members. Check the podcasts out here: Amazon Podcasts

    “Our customers’ listening habits are constantly evolving, and we know they’re looking to us to provide them with a rich experience rooted in music and entertainment,” said Steve Boom, VP of Amazon Music. “With this launch, we’re bringing customers even more forms of entertainment to enjoy, while enabling creators to reach new audiences globally, just as we’ve done with music streaming. Podcasts, paired with our recent partnership with Twitch to bring live streaming into the app, makes Amazon Music a premiere destination for creators.”

    Popular shows such as Crime Junkie, What A Day, Radiolab, Revisionist History, Planet Money, Ear Hustle, Why Won’t You Date Me? with Nicole Byer, and Stuff You Should Know are available now, and millions of episodes from top shows, with more being added all the time. Amazon Music will also soon be the exclusive home of the music-meets-true-crime podcast, Disgraceland, a show exploring the criminal antics and connections of some of the world’s favorite musicians, from the Rolling Stones to Tupac. Disgraceland’s narrative storytelling highlights tales of getting away with murder and behaving badly, chronicling some of the craziest criminal stories surrounding some of the most interesting and infamous pop stars. Disgraceland will arrive exclusively on Amazon Music in February 2021.

    “Partnering with Amazon Music allows me to really give my listeners what they’ve always asked for: more Disgraceland content,” said Jake Brennan, host of Disgraceland and cofounder at Double Elvis Productions. “Through this partnership with Amazon Music, we’re enhancing the future of the show for fans, expanding our output of content by moving to an ‘always on’ weekly schedule, which will translate to more episodes for listeners on a more consistent basis.”

    Amazon Music has also partnered with creators to produce original, exclusive podcasts. Coming soon, customers will be able to listen to “The First One,” a new audio experience hosted by one of the most prolific hit makers of the 21st century, DJ Khaled. Developed by Amazon Music and the Springhill Company, in “The First One” the mogul and superstar will interview his all-time favorite artists about the hits that made them iconic and eventually legendary.

    “I’m recording my podcast with the greatest musicians of all time, and with some of my best friends who also happen to be the most iconic artists on the planet,” said DJ Khaled. “We’ll talk about fame, fortune, life, and success. These stories are here to motivate you because everybody starts from somewhere, from the ordinary to extraordinary. Before you get to another one, you got to get to ‘The First One,’ only on Amazon Music.”

    Also coming to Amazon Music is a brand-new multimedia podcast hosted and curated by superstar Becky G, featuring audio and corresponding video broadcast on Amazon Music’s Twitch Channel. Titled “En la Sala,” every week, you’re invited to join Becky G as she calls on some of the biggest names in music and entertainment, her familia and friends, to discuss Latinx pride, women empowerment, LGBTQ+ rights, relationships, politics and sports, all while unpacking the most important issues facing the Latinx community today. Developed by Amazon Music and Gema Productions, Becky G has also dedicated each episode to a nonprofit organization related to the theme of the week. With a charitable donation attached to each episode to pay it forward to organizations directly impacting the Latinx community in a positive way, Becky sets the standard for her guests and listeners, since En La Sala, you can’t just talk about it – you have to be about it too.

    “To me, my voice has always been about more than just singing, it’s using it for the greater good and creating a destination for change,” said Becky G. “In quarantine, with so much time to consider the world around us, it felt like the perfect opportunity to open a new line of communication and pay it forward, and I’m so thankful that Amazon Music and Gema approached me with the opportunity to create this podcast. I’m excited to be joining forces with Amazon Music so we can start to have conversations about looking within to see how we can all be better.”

    Broadcasting legend Dan Patrick and IMDb will soon give movie fanatics exclusive interviews with top Hollywood stars in his new show, “That Scene with Dan Patrick.” Produced in collaboration with IMDb, this new podcast will dissect memorable scenes from some of the biggest films and television series. And coming soon to Amazon Music and Audible, is a project from Jada Pinkett Smith and Will Smith’s Westbrook Audio, a co-production with Audible.

    With Amazon Music visual apps on mobile and web, customers will be able to discover new favorites through curated recommendations across top categories, popular podcasts charts, and access to trailers on show pages. Whether listening on mobile, web, or on Echo devices with Alexa, Amazon Music makes it easy for customers to find, start, and continue listening to their favorite podcasts throughout the day. Only with Amazon Music can customers ask for the latest episode of their favorite show on Echo Auto during their morning commute, resume playback on their phone while working out, and seamlessly move to their Echo device when getting home – just by asking Alexa, with no additional sign in or device linking needed.

    “We’re thrilled to offer customers a convenient podcast listening experience that fits their lifestyle,” said Kintan Brahmbhatt, Director of Podcasts for Amazon Music. “Never before has listening to podcasts on the move, in the car, or at home been so simple. Our customers will be able to utilize the voice functionality they know and love with music, to now enjoy a superior podcast experience and uncover a brand-new selection of favorites.”

    Podcasts are now available to stream on all tiers of Amazon Music at no additional cost, including free access on Echo, web, and in the Amazon Music mobile app.

  • Big Tech: IBM Deploys Face Mask Surveillance System

    Big Tech: IBM Deploys Face Mask Surveillance System

    This may or may not worry you depending on your point of view. IBM has deployed a super intelligent face mask surveillance system for businesses (or government) to discreetly track face mask usage by employees, customers, and anyone who enters a building where their system is installed. The platform will send alerts to the powers that be if anyone is either not wearing a face mask properly or not wearing one at all.

    Presumably, if the tech savvy eye in the sky notices an infraction it will quickly enable management and their enforcement teams to confront the individuals to rectify their face mask violation. How dare they! It will also monitor in real-time crowd density, social distancing, and elevated body temps of those who are entering an establishment.

    IBM Cloud released a video narrated by Ian Smalley (below) that explains how their technology works to enable any business or government to surveil and enforce mask usage:

    Here is a really cool way that Edge Computing is being used to help businesses reopen and operate safely. We know face masks can substantially reduce the transmission of aerosol borne viruses. But sometimes people forget to wear them properly or at all. IBM Edge Application Manager places analytical workloads with Edge enabled cameras that can recognize face masks and determine if they are being worn effectively.

    Since analysis is being performed at the camera the video data and individual privacy are protected. You also avoid the expense of transmitting, storing, or analyzing that image data any further. Alerts are sent every time the camera detects improperly worn or non-existent face masks. Then it sends the aggregated data back to the IBM Maximo Worker Insights platform allowing you to highlight face mask activity in your facilities.

    It’s pretty amazing stuff and that’s only scratching the surface. IBM Application Manager is also using Edge Computing to monitor crowd density, social distancing, and elevated body temps of those who are entering an establishment.

  • Walmart Partners With Zipline For Drone Delivery

    Walmart Partners With Zipline For Drone Delivery

    Walmart has partnered with Zipline to deliver health-related products directly to customers. “We are teaming up with Zipline to launch a first-of-its-kind drone delivery operation in the U.S.,” says Tom Ward, Senior Vice President of Customer Product at Walmart. “The new service will make on-demand deliveries of select health and wellness products with the potential to expand to general merchandise.”

    Walmart will begin testing drone delivery early next year near their Arkansas headquarters. Zipline specializes in delivering medical supplies and other critical products for businesses via its unique drone technology. So far the company has made 58,436 commercial deliveries so far.

    “Zipline will operate from a Walmart store and can service a 50-mile radius, which is about the size of the state of Connecticut,” said Ward. “And, not only does their launch and release system allow for quick on-demand delivery in under an hour, but it also eliminates carbon emissions, which lines up perfectly with our sustainability goals. The operation will likely begin early next year, and, if successful, we’ll look to expand.”

    “As we continue to build upon the foundation of innovation laid for us by Mr. Sam, we’ll never stop looking into and learning about what the next best technology is and how we can use it to better serve our customers now and into the future.”

    Zipline Explains How Their Drones Work
  • Peloton Moving Toward Subscription Model, Says CEO

    Peloton Moving Toward Subscription Model, Says CEO

    “In five or ten years from now, I’d be surprised if (Peloton wasn’t available as part of a subscription),” says Peloton CEO John Foley. “I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction.”

    Peloton said in their Q2 earnings release that paid Peloton Digital subscriptions grew 210% year-over-year as they reduced the price of Peloton Digital to $12.99 and extended their Digital free trial period to 90 days during March and April because of sheltering in place restrictions that were in place around the world. Peloton also launched integrations with the four leading over-the-top TV platforms including Amazon Fire TV, Android, Apple TV, and Roku.

    John Foley, CEO of Peloton, discusses the likelihood that the company will eventually offer subscriptions for its internet-connected fitness products instead of requiring an expensive purchase:

    Moving In The Direction Of A Subscription

    In five or ten years from now, I’d be surprised if (our connected fitness products weren’t available as part of a subscription). I think there’s a there for sure. It’s not something you’re going to see in the next year. We didn’t need to have it yet but I love moving in that direction. It’s all in the name of affordability for our members, our current members, and new members, and making sure they feel incredible about the value.

    One thing I will point out is that my favorite metric last Q4 which was ended July 1, 2019, our subscriptions were used 12 times a month on average. This year, the quarter that just closed, they were used close to 25 times a month on average. So when you’re paying us $39 a month and getting 25 workouts from your household it’s close to $1.50 per workout. It’s just insane value. We’re very excited about that and we’re going to continue to push with more content and more access to our content.

    Bike+ Is Now The Best Bike In The World

    To the extent, we are having a hard time making bikes fast enough at the current price you would say we don’t have to change the price at all. Of course, we are with our better best strategy. With the better best we can have the premium product, the best product in the world, which the new Bike+ that we came out with this week is. Bike+ is now the best bike in the world and it’s at just under a $2,500 price point. Over time, it allows us to do a lot of creative pricing.

    Right now, the original bike that’s the best cardio machine on the planet loved by millions is under $1,900. From a finance perspective, it is under $49 a month which we’re very excited about. We do think that as we grow the SAM and TAM globally price point for our products is going to matter so we’re getting out in front of it.

    Peloton Moving Toward Subscription Model, Says CEO John Foley