Tiffany Banfield's Profile
Thanks for sharing Surabhi! I think this is a great application of AI and ML and will help the fashion industry to use more data analytics in their operations and forecasting. I particularly think that assistance with demand data will help to create value and drive profitability for apparel companies. There is also an opportunity to reduce the time to market so that summer clothes are not sold in winter. Perhaps data and analytics will help to shorten that lead time. However, two concerns that I have are around creativity and competition. On the creativity issue, I’m concerned about the adoption of the platform by fashion designers who likely rely on intuition and artistry to create new clothes. How is Stylumia working with partners to increase adoption? And on the competition issue, how is Stylumia handling the conflicts of interest caused by serving competing partners? For example, will Michael Kors partner with Stylumia if Coach and Kate Spade are already customers? Receiving data insights from the same source may result in companies offering similar products, such as the same color or design. I think Stylumia may have to carefully consider who they partner with and how they use the data that they collect.
Great blog Omar! Netflix has been an incredible example of pioneering digital, analytics and now AI & ML to improve existing business models. It is amazing how much data Netflix has and how that can enhance the user experience and keep subscribers coming back to the platform. One concern that I have as Netflix continues to grow is around the potential negative publicity that the company could face from exploiting users data to keep them watching shows and TV. This is especially concerning given the increase in mental health issues and studies showing how binge-watching can negatively impact health and happiness. It will be interesting to see if Netflix will include prompts to encourage users to take a break which could reduce their viewership metrics but may go a long way in proving that they are a socially responsible company.
Great blog post John! I would like to try Boxed but I realized I can’t access the website without signing up (I wonder if that will hinder new customers). Based on the highly competitive retail and supermarket industries do you think that Boxed should continue to focus on competing and growing its business? Or do you think that Boxed should consider a strategy similar to Ocado (the British online supermarket) which has pivoted to licensing its technology to other other retailers? I personally think that with the vertical integration at Boxed they may be able to execute a similar strategy to Ocado’s by exclusively licensing their technology to retailers in non-competing geographic locations or segments. It will be interesting to monitor Boxed as big players such as Costco make more investments in digital capabilities.
This is really insightful Stephane! I had no idea that the Starbucks app was the top US mobile payment platform and I agree that it is a major differentiating factor compared to other coffee shops. I’m sure that the app also speeds up transaction time and enables Starbucks to process more customers in a given time period, thereby increasing revenue and keeping customers happy since they don’t have to wait in line as long. One question that came to mind is whether the company has been able to A/B test in-store features by using the Starbucks app? We’ve seen many examples of A/B testing on digital platforms but I would love to learn more about whether Starbucks A/B tests things such as specials, types of ingredients, physical ambience? I think that the Starbucks app could be an example for other retailers of how to collect data and use it to A/B test non-digital aspects of products and business models.
Thank Tim! This is such an interesting application of AI. I personally would love to try the Hawk Eye tennis coach! How do you envision this product being scaled? Will it be so expensive that it is only used by pro tennis players or will it be more commoditized? I would love to learn more about the decision to produce a consumer product as opposed to improving the current Hawk Eye referee so that it can be used as the sole referee rather than having linesmen and Hawkeye. I’m sure the commercial application of Hawkeye instead of linesmen would save the WTA/ATP and tournament organizers a lot of labour costs and also improve the game since there should be no incorrect calls. What I’m also wondering is how is Hawk Eye attracting talented data scientists to innovate and roll out these new AI and ML products?
Thanks Tim! I think that you make a great suggestion. I believe there is a market for Sweat to offer a premium higher priced service with access to live workout classes or one-on-one virtual training sessions. For this to happen, Sweat would likely have to increase the supply side of their marketplace so that there are more trainers available for live individual sessions and this may have an impact on the quality of the service. I also think that Sweat’s revenue is most at risk to very large platform players such as Apple Fitness+ which can consolidate multiple service offerings (e.g. mental health services, GPS tracking, health data monitoring) under one app and leverage the data already collected on iPhones and Apple Watches. I’ll continue to watch the space to see how it evolves.
Thank you Vartan! I am also curious to know how much growth in the fitness app industry was captured by Sweat but unfortunately I haven’t been able to find that data. I do see your point that customers may have wanted more integrated solutions including equipment due to the lockdown but I think one of the benefits of Sweat is that workouts can be done anywhere. In normal times, this is a huge advantage when you’re traveling, don’t have the space for an at-home gym or simply can’t afford or access programs like Peloton (e.g. internationally). In terms of disintermediation, I think Sweat provides enough support services and benefits to trainers that leaving the platform would be disadvantageous. Sweat has significantly increased the visibility and popularity of trainers on the app since the ads for their programs and workouts reach over 1 million users per month (new trainers generally have under 200k Instagram followers). This likely boosts the trainers compensation as well.
Thanks Rolando. That is a great question! I think that Sweat focused on female users to start because it was easier to find product market fit. As Giulia mentioned above, Sweat evolved from selling a PDF of the Bikini Body Guide (BBG). They had user base through females wanting to get fit and toned. As they have proven their success in the online app though, I think they should add male trainers and offerings for men. In my opinion, the workouts are tough already but for the guys who may think it is too girly, they should had add more hardcore lifting programs or other workouts that appeal to males.
Thank Giulia! I actually do think the higher price is sustainable in the long term because more and more people are realizing that at-home workouts using apps are as effective as workouts in the gym. Therefore I think that the comparison isn’t between apps but between a high quality app and a gym membership/trainer. Since Sweat offers a superior quality workout, I think that users will continue to pay $20 per month (or $10 per month for an annual subscription) since this is significantly cheaper than any gym membership or personal trainer. As Tim suggested below, there may even be an option for Sweat to offer a more expensive premium service with live trainers or group sessions.
Thanks for sharing Julia! Although I’m very interested in working out, I had never heard of Strava, perhaps because I don’t cycle. It is one of the top 10 highest revenue health and fitness apps though. I do find it interesting how the fitness app industry is becoming more segmented by type of activity. For example, there are apps mainly for tracking food, such as MyFitnessPal, apps mainly for runners, such as Nike Run, MapMyRun and RunKeeper, apps mainly for mental health such as Calm and Headspace and apps mainly for workouts such as Sweat. Do you think that this fragmentation will continue as apps carve out market share in niche segments? Or do your foresee consolidation so that every aspect of health is monitored using one app? I am starting to think that the fragmentation will lead a large player such as Apple to enter the market and to create and capture significant value by consolidating services. I haven’t tried Apple Fitness+ yet but I think it may steal market share from all of the other fitness apps, similar to how Apple Music overtook Spotify in the music app segment. Apple can also leverage complementary Apple offerings and health data which is already tracked on iPhones and Apple Watches. Having said that, Apple Fitness will be limited to Apple users which may discourage some trainers from joining the app and allow other apps to remain popular on android phones.
Your analysis on Etsy is very insightful Julia! I agree in a sense that scale may be limited since these small businesses are usually side hustles. Furthermore as soon as the sellers reach a certain scale they may move to a larger platform. However, I do think there are more options for Etsy to continue to add both suppliers and buyers onto the platform which will allow it to continue to grow. Also, does Etsy offer additional support and value-add services such as logistics and search optimization/advertising to suppliers and suggested items based on purchase history to buyers? This could both increase transaction volume and the take rate/commission thereby driving growth to the Etsy platform. I’m interested to see how Etsy evolves over time but I agree with you that their future is bright.
This is really interesting to see how a physical product can be transformed to a digital product and enhanced via digital platforms. I imagine that collectors can display their cards to a much wider audience and that in turn creates more pride in an individual’s collection. The fact that the global platform allows users to reach more users with more options for successful transactions I presume would also increase user’s utility and satisfaction. Do you think that other products will follow the same strategy, for example Pokemon cards? And if so, do you think the NBA will leverage their platform as a central card trading platform or will they remain exclusive to NBA and sports trading cards? The increased volume from other products on the platform could drive revenue but at the same time it may dilute the NBA trading card value proposition.
I agree with you that Harvard Business School did a fantastic job of handling the pandemic and pivoting to virtual and hybrid models with limited time. Some things that you highlighted which I think differentiated Harvard Business School from other institutions and companies are: seeking and incorporating feedback constantly and piloting different programs and approaches to see which worked best. Although these two activities are best practices, due to the extreme pressure and time constraints it would have been easy to omit them and make decisions in a vacuum. However, the staff and faculty did not take any shortcuts and their commitment has paid off. Having said that, if this pandemic has taught us anything it is that cooperation is critical to achieve success. The roll out of hybrid classes and opening of on-campus activities would not be possible if individuals did not take responsibility for their actions and make a conscious effort to protect each other, for example by quarantining for seven days before returning to campus. This collaboration and cooperation has been a major challenge for organizations, especially those who may not have the resources to conduct as extensive testing and monitoring or the the authority to institute such strict rules.
Despite the success of virtual and hybrid models, I wonder how much of that will stay after life returns to a somewhat normal state. For example, many people made the decision to defer this year so that they could benefit from a full in-person experience. While some classes suit the online format perfectly, it is still impossible to replicate activities such as chatting and getting to know each other before and after class. I also think an online offering has the potential to diminish the value of the typical MBA program when education returns to in-person. But there are many ways that technology can enhance the MBA program and save time, such as virtual office hours and meetings and more webinar options on special topics. It will be interesting to see what virtual aspects remain in the short and long-term.
This is a great perspective on one of my favorite brands of workout wear. I think Lululemon’s success was also bolstered by the customer-centric reputation they had built before the pandemic, as well as their decision to vertically integrate from design and manufacture to retail in order to control the entire value chain. I’ve heard that Lululemon did an excellent job of sanitizing fitting rooms and ensuring that customers feIt safe to shop during the pandemic while companies like Nike and Under Armour had less control over the shopping experience at third party retail outlets such as Dick’s and in some cases customers could not try on Nike and Under Armour clothing. It really highlights how important strategy is in allowing companies to weather unforeseen events like economic downturns and global pandemics. It seems that some of the most successful companies during the pandemic, such as Lululemon and Domino’s, rely less on partnerships and therefore have more flexibility to quickly adjust to changing circumstances. I am interested to see how sustainable the price increases are as more and more companies are entering the athleisure space which will undoubtedly increase competition and put pressure on prices. I am also curious as to how the acquisition of Mirror will impact their operations, culture and costs since it is a very different product from their core clothing line.
Thanks for sharing this story about a unique Japanese company! I find it impressive that Oisix was able to grow its revenues while cutting costs significantly, especially during the pandemic. It seems that the company doubled its EBITDA margin and tripled its operating margin. Was it economies of scale that drove that enormous margin expansion? Or did they start to promote higher margin healthy products while cutting lower margin staples? I also think that the pandemic was a major tailwind in this growth and I am interested to see how the company continues to grow its revenues and user base as life gradually returns to normal and more people revert back to in-person grocery shopping and restaurant dining.