Interesting! It sounds as though Handy is experiencing growing pains from growing too quickly. Couple of questions…. Has Handy considered dynamic pricing? Are the contractors using this mostly as part time work on the side or really as their primary income? I’m not sure disintermediation is as big of a risk as standardization given its 1099 employment structure. Consumers experience so much turnover with housecleaners that work directly for them and so even if consumers do go direct, they often come back to agencies pretty quickly.
Great post! I agree with Tehsina and believe that the multitude of e-commerce shopping sites has caused customers to have very low site loyalty. Shoppers’ decisions seem to be driven by price and availability. Their Porter magazine is a real competitive advantage, and I’d be curious to know how the ROI and data differs for converting new customers vs repeat customers. One way traditional retailers such as Intermix have improved loyalty is by having brands design exclusive lines for the retailer. This is a strategy that could benefit Net-A-Porter especially since increasing private label offerings is less useful for its luxury customer target that is likely very brand-focused.
Love this! The biggest risk I see which others have hit on is flexibility. More and more, we are seeing that individuals want customization, are developing more allergies/food intolerances, and want to substitute ingredients on menus. How can Sprig serve these customers that for example ask restaurants to leave out onions and garlic in their orders or to steam instead of sautee their vegetables? Are customers able to ask chefs questions about ingredients/preparation style real time? Have they considered subscription based pricing for these types of customers that may be planning further in advance? Another thought is that customers like to see where their food is coming from. When customers turn restaurants into personal chefs, they do so after going to the restaurant perhaps once and discovering their preferred meal. If there is some way to combine offline with online to get people over the hump, the company may speed up customer acquisition (Rent the Runway did this when they opened up their retail store in NYC).
Very interesting analysis! I am actually an Alfred customer and have been trying to understand the profitability for awhile now as well. I do think there is benefit to having a W2 employee instead of a 1099 Alfred as the Alfred can provide higher value, more customized services such as learning about your lifestyle (for example, my Alfred knows whether to put my lemons and apples inside my fridge or keep them outside, something that would not be worth teaching consultants with high turnover). To me, the most burdensome part of their business model is the customer service component. Right now, customers cannot communicate directly with their Alfred. All changes to instructions, any questions, etc. are sent through headquarters which is very inefficient as sometimes Alfred will not get the message until after they have visited your home. Changing the model so that a customer’s butler has a direct line of communication with the customer when the butler has a question grocery shopping for you if the store is out of an item, for example, will free up resources important for scaling. Yes, there is a trade-off between efficiency and quality control. However, having trained W2 workers should allow the company to preserve the right amount of quality while improve efficiency necessary to set it on a path towards profitability.