Thanks Giulia for this interesting blog. Not being a social media addict myself, I am still confused on the unique value proposition of Pinterest compared to, for instance, Instagram or Facebook. As a result, and based on what you wrote above, how could Pinterest have leveraged its AI-technology (and other best practises in the digital transformation area) in a better way? Today, Pinterest (although financially a very solid company) has only half of the individual users of Instagram. How come?
Interesting read! Through the acquisition of Geomagical Labs, IKEA created a competitive advantage but -as already mentioned above- not everyone is fully convinced of the IKEA-brand at every stage in their lives. As such, I am wondering whether it makes sense for IKEA to spin-out the technology and allow users not only to shop with IKEA but also with other furniture shops. This vertical integration might bring a new set of customer insights for IKEA and a new revenue stream as brands do pay a commission of their furniture is sold through the IKEA technology.
Great blog post about a great company! Thanks!
As a long-time paying subscriber and taking into consideration the long-lasting profitability concerns of Spotify, I am wondering how Spotify can further increase the willingness to pay of its customers. Given its superior technical assets, would moving away from audio-only be an option in this respect? How transferrable are the company assets and corresponding competitive advantages?
This is very interesting and somewhat scary at the same time.
Disney is combining the pricing analytics of an airline company with the data generated by an Apple Watch (incl. Google’s Waze super feature) and the customer insights of Netflix…
If you ask me, the question is not how Disney will handle the post-Covid era but how far their moonshot will go!
Nike indeed is a great example of a data-driven company. I am wondering however if its mobile strategy is allowing to make the most out of the data capabilities. 7 different apps bring -without any doubt- problems to link the data out of these apps to one single customer (e.g. people having different e-mail addresses in the different apps).
Since the mobile channel is mainly used to create a personalized experience facilitating both upsell and cross-sell in the long-term, it feels much more natural to me to bundle all functionality into one single app.
After all, a bank doesn’t have separate apps for it current accounts, savings, investments…, isn’t it?
Interesting industry, great company, state-of-the-art product! Thanks for this article Omar!
I can think of two opportunities that have not been covered yet in the blog post or above comments: health insurance and B2B.
I truly believe health insurance companies are eager to reduce their fees if people capture health data and follow-up on recommendations to lower their health risks.
Employers too are important stakeholders when it comes to the physical and mental health of their employers. I know Whoop is already tapping into this market but I am also convinced there is still a lot of money on the table in this segment.
Looking forward to our class discussion.
Jon, thanks for sharing. Artists and labels not having access to insightful listener data on Spotify or Apple Music in is a problem. Influencers on TikTok or Instagram are actually suffering the same problem.
I truly believe however a substantial part of the “content providers” are willing to pay for customer insights in return. It allows them to further increase their revenue by setting up viral marketing campaigns.
This said, network effects in the music industry are that strong and, as a result, barriers to entry very high. This makes it extremely difficult for a platform like SoundCloud to survive. Nevertheless, differentiation is probably the only way to deal with this challenge.
Interesting post. Thanks for sharing this Bruno. SaaS-enabled booking platform exists in all types of flavors. Mindbody focuses on the fitness industry, Resy is helping restaurants with their reservations and NexHealth offers a solution to patients and MD’s to book an appointment in a seamless way.
All these SaaS-solutions are build based on an easy and similar workflow tool. Hence it is my feeling that, one day, these tools will be consolidated and only a few players will remain on the market.
Happy to discuss this in class.
The concept of Sweat is very interesting. Thanks Tiffany for sharing.
Like the entire health and wellness industry, Sweat if benefiting from a booming market. The pandemic gave Sweat another boost. This said, one day, this growth will come to an end. In this respect, I am wondering how Sweat will increase its revenue per user in order to further improve its financial performance. Further increasing price doesn’t seem obvious while changing its current “one-price-fits-all” policy into a basic and premium subscription might lead to customer frustrations.
Thanks Karl! Interesting alternative indeed!
Very valid comments Omar, thanks! With regards to your second point, I think there will be room for different players on the market but “design principles” will be set by a “regulator” to allow for standardization and use across the different service providers.
Think about payments for instance. Several organizations do process payment transactions intercompany. This is possible because of the international standards set by a neutral party.
Although I truly believe our society is only at the start of the digital transformation, I am not convinced Redfin will be able to continue its 2020 growth rate. Obviously, the pandemic forced us to change our habits, our way of doing things and there clearly was a wave Redfin could surf on.
If you think about buying/ selling a house, however, this is a transaction with a high perceived cost, a high perceived benefit and where many people only have limited prior experience. As such, many customers do want the advice of a trustworthy and knowledgeable 3rd party, even if expensive and with a lot of information available on the internet. That is why I tend to believe customers will prefer to visit any targeted properties again as soon as sanitary conditions allow and meet their advisers in person instead of through an online platform.
I am a frequent user of InstaCart and could not imagine anymore spending 10% – 20% of my weekend on doing groceries myself. As such, I truly believe “Groceries as a Service” is here to stay, also after the pandemic. If InstaCart wants to keep up with its exponential growth, however, improving customer service will be key. Too often, deliveries come too late or are incomplete. I even ended up once with the groceries of someone living 2 blocks away.
In order to improve its customer service, InstaCart will have to implement a “Good Work Strategy”, paying specific attention to its workforce, treating them well so “mediocracy” can be avoided. As far as I am concerned, this will define the long-term success of InstaCart.
Dear Giulia, this is a thorough analysis of an exceptional brand that managed to leverage the pandemic into exponential growth. Although I acknowledge the strong cash position of Lululemon was an asset to respond to the changing customer needs in the last year, I am still wondering if the acquisition of the Mirror was the best investment for Lululemon. There are less expensive, high-quality competitors of Mirror on the market (e.g. Solos) while there are several popular outdoor sports that boomed because of the pandemic where Lululemon is not yet active in (e.g. cycling). Was paying 500M USD for Mirror worth this investment or would a further diversification of the product portfolio pay-off more in the long run?