Hi ND, that’s a really insightful and difficult to answer question. Amazon definitely poses a huge threat to Wayfair – a sleeping giant that Wayfair needs to start thinking about now, as it starts to really hit its inflection point. Currently, based on some reports I’ve read, Amazon offers somewhere in the neighborhood of 70% of the products Wayfair offers. Given that the strength of Wayfair’s business model is its broad selection, this is a scary statistic. Wayfair’s current advantage is that it is able to offer those overlapping products at a lower price, on average, than Amazon.
Personally, I question whether or not Wayfair can maintain this advantage if Amazon ever decides to concentrate its focus on the furniture space. Amazon has a more robust distribution system, and its customer algorithms are (I’m assuming) also more sophisticated. It will be a fascinating battle to watch if Amazon focuses on the space in the near term.
Dino! Great post – this is a really interesting concept. What stuck out to me was the idea that the advisors could be current or former employees of the companies the customers wanted to reach out to.
If an advisor is a current employee, do you think there’s danger in customers viewing the platform as a way to pay for an interview? If that happened, I think that could erode a lot of the value on both sides of the equation. The customers wouldn’t be able to get an honest view of the company because they were too busy trying to present themselves in the best light (we’ve all be guilty of this). The advisors might also lose the feeling of “giving back” if they sense that someone is simply paying them for a networking opportunity. Do you think there’s a way for the company to address this potential concern?
Hey Jackie, great post! Chipotle is always a fan favorite. The fascinating part about Chipotle’s operating model has always been the incredibly efficient assembly line they employ to make your food. Their ticket times (time from when the customer orders to when he/she walks away with food) consistently lead the industry, which creates huge value for customers who stop in for a quick lunch break. To your point, this is also great for Chipotle since it allows the company to push through a higher volume of customers per hour, which can drive down their labor as a % of sales (which are also typically industry leading).
My question is how do you think Chipotle keeps demand for its products so high? Having low ticket times is great, but doesn’t completely explain why faithful customers like you go back so consistently and frequently. Is it the variety they offer? Or is the food just that good? The benefits Chipotle gains from its operating model seem to require high demand. Is that a concern for them going forward, as the concept may become stale (very little product innovation) or potentially critically damaged due to the recent e.coli scare?
Tom! Great post. Out of curiosity, how does Vidangel’s library of streaming options compare to services like Netflix or Amazon Prime? My understanding is that companies like Redbox and (formerly) Blockbuster are/were able to rent out physical copies of movies without the consent of the movie studios, but streaming services require an agreement between the service and the studio. Is that also true in this case? Or is there an important legal difference between Netflix’s subscription model and Vidangel’s a la carte model?