Thanks, Bruna! I think that rather than invest too much in enhancing the in-store experience, traditional grocers should invest their money in bringing as much of the in-store experience online as possible. My opinion is that bricks and mortar grocery stores’ days will be numbered as soon as someone figures out how to profitably do online grocery delivery. Grocery margins are thin, but as you mentioned, there are still many companies trying to eek out a profit through online grocery delivery. I suspect that companies that have their own distribution haven’t cracked the code yet – Amazon Fresh and Fresh Direct have both been around for a long time, and neither has expanded beyond a few select cities. I think that is quite telling. Delivery companies like Instacart that don’t have their own distribution will still need somewhere to get the goods from if they are successful – so there will still be a role for bricks & mortar stores if that ends up being the winning model. Still, the stores need to find ways to differentiate themselves online. Online loyalty programs may be one way to do so, even through a platform like Instacart.
Great article, Rebecca! I think an important benefit of a platform like this is that it allows people who need more work life balance longer-term to continue leveraging their skill-sets and making good money. Rather than people in a similar stage of life to Rob, I see it appealing more to women (or men) who after having children realize that they don’t want to be full-time parents, but they also can’t justify being away from their family all the time as a full-time consultant. Catalant and platforms like it allow them to continue working, on their own schedule. In terms of opportunities for advancement, I’d imagine that one would be able to charge by years of experience, so that even if flexible consultants don’t get to become partners at a big consulting firm, they can still make a lot more money as they advance in their careers. By the way, another HBS startup doing something similar to Catalant is Canopy Advisory Group. It was founded by Brooke Borgen (HBS ’06), a former Bain consultant, and is based in Denver and Seattle: http://www.canopyadvisory.com/
Very interesting post, Zach! I am intrigued by your suggestion that ESPN invest less in their non-sporting event television shows. I would think that as users migrate online, they would want to have more unique content available through their platforms, rather than less. In my opinion, getting people to pay for very much for OTT subscriptions is tough, given the proliferation of services available. Subscribing to multiple OTT services can become expensive, eventually approximating the cost of the cable bundle they were meant to replace. So, I’d think ESPN would need to have a really compelling offering in order for people to add the service onto a so-called “skinny bundle.” Some premium non-sporting event content might be one way to do that.
Great article, Jodie! It seems to me that one of the challenges MCNs in general may be facing is the difficulty of migrating users from free to paid. Up to this point, users have been able to watch all their favorite content creators on YouTube for free. However, as you pointed out, YouTube is not a very lucrative channel for the MCNs, as YouTube only pays out only 55% of the advertising revenues to the MCN, and most of that value gets passed on to the content creators. Migrating users to other platforms that pay more is a great idea; however these platforms are able to pay more because users are in turn paying more for the service. Until users’ willingness to pay increases, it might be hard for MCNs to make more money than they do now.
One service that tried to get users to pay for YouTube-style short-form content was Vessel, which got acquired by Verizon in October after 18 months of operation (per TechCrunch: https://techcrunch.com/2016/10/26/verizon-acquires-vessel/). Vessel experimented with “windowing” – i.e., allowing users to watch content before it was available elsewhere, for a fee of $2.99 per month. Verizon acquired the company for the technology and product, but unfortunately, since they shut the service down we don’t know whether they would have been successful at getting users to pay more for short-form content in the long-run. However, my read of the situation is that given Vessel was sold after only 18 months, either Verizon made them an offer they couldn’t refuse, or the company was struggling to find product-market fit.
Thanks for shedding light on this important issue, Emma. This dovetails nicely with my post about Sunrun, whose value proposition as a solar installation company is partially dependent on policies such as this one. Cost savings versus traditional utility energy are a big reason for consumers to switch to solar, and net metering credits generate a portion of that cost savings. While policies that incentivize consumers to switch to solar may be desired, public policies need to be evaluated in terms of their broader impact.
Thank you for your contribution! I have never purchased an HVAC system, so I may be biased, but I wonder how much consumers truly know or care about the global warming impact of their HVAC products. I would guess that since most homes already have these systems, unless someone is installing a brand new system for some reason, they would not be attentive to this issue. I’d be interested to know if you have any thoughts about the consumer path to purchase and psychology around these products, and exactly how that might impact/put pressure on a company like Daikin.
Thanks for the interesting post, Tracy! There are other fashion startups trying to combat this trend in various ways. For example, Cuyana’s mantra of “fewer, better things” encourages consumers to pay a bit more for timeless, high quality products that will last a long time. The idea is that ultimately, Cuyana customers will need to have fewer items in their closets, leading to less waste/excess. While I think this is a great idea, I agree with harajuku girl that none of the startups in this space are currently large enough to impact the sustainability of the industry as a whole – large fast fashion companies like H&M really have to be at the vanguard driving change or it won’t happen.
On their website, H&M recognizes that sustainability is an important issue, and touts various initiatives they have undertaken to promote sustainability, including a recycling program. The recycling program works like this: you can take old clothes (even if they’re not from H&M) to any H&M store, and their partner will sort them into three categories – rewear (sold to second-hand stores), reuse (make into rags, etc.) and recycle (into textile fibers for things like insulation). Here is a link to the website with more details: http://about.hm.com/en/sustainability/get-involved/recycle-your-clothes.html. My question for Tracy is, do you think H&M’s commitment to sustainability is credible given the nature of their business? I see a lot of parallels between H&M’s situation and the Ikea case – both companies sell “disposable” products and need to figure out how to be sustainable nonetheless.
Thanks for writing such an interesting post, Walter! I am happy to hear that Amazon is taking sustainability seriously in their AWS business. However, an area where I think the company is potentially lacking in terms of sustainability is in its Amazon Prime business. Due to the structure of Prime (unlimited 2-day shipping with an annual membership), its members have no disincentive to order items on a one-off basis, rather than batching items together into fewer orders. I assume this increases consumption of the packaging materials, which are mostly made of paper and therefore consume a lot of natural resources. The Prime program may also incentivize people to buy inexpensive things they might not otherwise buy because of the free shipping, thereby increasing waste (that’s probably a stretch, but I suppose it’s possible). I wonder whether Amazon releases any information on the environmental impact of Prime and how they are working to ensure that business is sustainable.
Thanks for the great post, Jordan! I’d like to try to answer Anto’s question about why GM has not been able to sell as many fuel-efficient/electric cars as their Japanese and Korean competitors. I think Jordan hit the nail on the head when he said, “Can the company that introduced the world to the “H2” Hummer really transform it’s business and product line to be sustainable?” In my opinion, GM likely has an image problem, in that their cars, like many American brands, are known for power and size rather than fuel efficiency and sustainability. I think that if they want to compete in this space, they will have to change consumers’ perceptions of what their brand stands for. This will likely be costly for them, but hopefully they can find a way to make the ROI work on this brand investment, as well as on the huge R&D investments Jordan mentioned.