Incredibly well crafted article, BT!
Just a couple of quick questions for you:
1. I have read that early entrants such as IKEA, Raymore Flannigan, etc. have been looking to national footprint through a growing online presence. Given its unique pricing architecture and SKU consistency – could you elaborate on the Company’s online sales strategy? What % of sales are online?
2. Furniture is a segment where customers often conflate price with quality. How does this chain communicate its low cost high quality message to its target demographic? What is the target demographic and does the Company envision moving up the value chain in the near future?
3. Does the Company own or lease its stores?
Thanks for the extremely valuable insights, MC. I can definitely see why partnering with Birchbox would be an ideal way to increase mass brand adoption for a smaller brand but how does a partnership benefit a customer-favorite brand who has already established its own retail network (Chanel, etc.)? You touched upon numerous recent iterations in the Company’s operating model – are these reactions to increased competition from subscription-based competitors like Ipsy and GlossyBox? What is the genesis behind the foray in to competitive categories which are already dominated by specialists (Dollar Shave Club, Harry’s, Gilt Home, One King’s Lane)?
Thanks for your insightful note, Feiran.
Seems like WeChat’s customer base is pretty receptive to ad placement such as P4P. Has Tencent considered lowering its subscription fee to grow a sticky user base within its app within app platform? I would imagine there would have to be an inherent desire to “opt-in” for the unique user experience at such a high price point vs. apps such as Facebook Messenger and Viber which are virtually free . So why not price lower, grow and monetize on a larger user base and continue to curate ad content for those users?
Seems like a tremendous amount of personal data is stored within the app. Does Tencent / WeChat offer enhanced security measures to protect its end users? What differentiated their security infrastructure from similar app within app platforms?