r cai

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It’s so impressive to see how the NYTimes really was able to switch gears and update their traditional business model by really investing in getting the digital strategy right and then backing it up with the appropriate resources, priorities and processes to execute on their strategy. Looking forward, as their competitors similarly expand towards paid premium and curated content, I’m curious as to how the NYTimes will look to differentiate itself and continue to get share of the customer wallet. This post reminds me a lot of the streaming wars in TV right now where many of the TV channels have launched their own subscription based platforms. One big question remains on how customers will react – will they be willing to have multiple subscriptions with specialized content or look for a more general content provider. I see NYTimes potentially having to compete not only with it’s more traditional sector players (Wall Street Journal, etc), specialized players (Financial Times, The Economist, etc), but also with overall content subscription (Netflix, Spotify, etc). What if Netflix launches a news channel? Will consumers be willing to have all of these platforms as the lines between content blurs?

On February 11, 2020, r cai commented on Peloton: Winning the fitness battle, losing the economic war :

Thanks for this thoughtful post! I’m also curious to see how the Peloton strategy shakes out over the long term, but I think one aspect that is missing here is the value of the trainers and instructors that Peloton has built. While other studios like soul cycle and barry’s might have similarly loyal followings, Peloton through it’s digital app and in-person classes has allowed people to feel like they have a “personal trainer”. In my mind, the value proposition is less about the community feel and more about having a personal cheerleader to guide you through workouts and the convenience to do it at your own time and in your own space (or at the gym). For the trainers, it’s given them a broader more global stage to encourage and empower which is what their taught to do. I think the new competitors coming out have yet to be a serious threat as most of them are addressing a specific type of workout (HIIT, rowing, boxing). Peloton in seeing this has been expanding it’s selection of classes across a variety of exercises yoga, outdoor running, meditation, etc.

I agree your question on how big can this truly grow and will they be able to figure out the economics are questions worth digging deep into, and will ultimately determine Peloton’s fate..

On February 11, 2020, r cai commented on Stitch Fix – Fashion’s Most Innovative Retail Company :

It’s interesting to read about Stitch Fix in the context of when it began and compare it to the state of the retail / shopping industry today. In thinking about where it began, I agree with you that it absolutely changed the way that people “consume” fashion and shop and that it led to many of the imitators who are now encroaching on Stitch Fix’s space today. It was also able to wake up an industry that wasn’t really paying attention to digital and sparked brands to be aware that they should think about owning their own customer relationships in a more personalized way.

Another point that your post highlights is the need for the tech to be integrated throughout the company. By founding Stitch Fix and labeling it as a tech company, the employees are positioned to think about how they can best use the data they have to make decisions and create value. In the more traditional retail companies, like Nike and Nordstrom, they have struggled in integrating digital across all aspects of the company and it begs the question of the best way to integrate if not creating a new startup. Can companies like Nike really get others (internal and external) to view them as a “tech company”?

Another trend that I’m seeing across some of these articles, and one that I believe exists here, is that companies tend to look at “tech” as their salvation, their ability to disrupt a market (in this case) or get them out of a pickle (in other cases). While the tech for Stitch Fix is absolutely crucial to their business model, I wonder if Stitch Fix got so focused on developing their tech and AI that they forgot about the rest of the business model. In some ways, tech can be a low barrier to entry and others can build the capabilities that were once a company’s competitive advantage. I wonder if Stitch Fix could have created high barriers for entry in other aspects of its business model – like its customer base. For example, what if Stitch Fix had perhaps added a social element to the platform, developed closet sharing capabilities, clothing recycle, to keep their customers more sticky. I think it seems that while digital technology can transform a company and even an industry, it’s only a short while before other aspects of the business must also continue to innovate in order to stay competitive and relevant.

Hi Walter,

I really enjoyed reading your thoughtful post on the Swiss watch industry (especially as my husband is planning to go into this “dying” industry next year). While I do agree that the Swiss watch industry is facing challenges in attracting younger consumers who are interested in wearables and smartwatches, I think that it’s important to distinguish what type of digital innovation these companies pursue. Like some of the comments above, I believe that for the higher tier luxury watch brands, it does not make sense for them to compete in the smart watch space and instead should look to differentiate themselves from techy, social aspects of smartwatches. In that vein, I would advise them to focus on what makes them special – the art and craftsmanship that goes into a mechanical timepiece. One that isn’t mass produced, and builds its own social community among its unique owners. What I would suggest, however, is that they invest in updating the way that they interact with their consumers to communicate through more social platforms, centralized customer databases, dynamic pricing, etc.

The group of watch brands that may be under fire, may be the Fossil watches of the world which compete with Apple watches in price and lack in utility. Some of those brands have decided to partner with tech companies to introduce their own more fashionable smartwatches, but it’s still unclear whether that is a good strategy. It will be an interesting battle nonetheless especially as companies like Apple expand to further categories in the consumer space.