Thank you for a great read, Gurmukh! Having never used Airbnb myself, I found your post to be a great summary of the business. While it sounds like the company has done a great job of investing in optimal pricing models to capture value in periods of high demand, I wonder whether they are equally as focused on capturing value in periods of low demand. Hotel Tonight seems to have done a great job of serving this market and I would think Airbnb would be concerned about this competitor. As such, have they implemented anything like Hotel Tonight whereby prices drop in the short-term to fill unsold units (i.e. the opposite of surge pricing)? Additionally, I understand that many properties have minimum night stays and one would think this term would be negotiable for many hosts if their property was vacant. While individual hosts of course have the option to amend they prices to spur demand, I would think it would be in Airbnb’s best interest to invest in some sort of technical infrastructure to help boost utilization of its host properties.
Hi Nkem – great post! As a user of Asos myself, I certainly buy into its value proposition.
As you mentioned, one thing that makes Asos so unique is its extremely vast selection of on-trend inventory. In fact, compared to other online retailers, it can sometimes become exhausting to navigate through all of their products. This makes me wonder about their operations strategy around inventory management. I’m curious how they balance consistently updating their SKUs to offer products that appeal to the constantly shifting fashion trends with the costs of holding inventory. Do they stock all inventory in company-owned warehouses or do they force any of their partner brands to maintain inventory risk? Additionally, given that they are entirely digital, how do they dispose of obsolete inventory (i.e. retailers with physical locations have the option of outlet stores or warehouse sales)?
In any case, it seems like they have truly perfected the online fast fashion model and is certainly a very interesting company to examine!
Hi Andrew! I really enjoyed learning more about MiniLuxe via your post. While it seems that they have done a great job and testing and rolling out in Boston, two questions come to mind for me (as a regular consumer of their core product). (1) How will they evolve their business model to effectively compete within a very saturated industry in other cities? As Ritika mentioned, this is one luxury that consumers are conditioned to pay little for and it will be difficult to change that behavior unless the MiniLuxe experience is markedly better than competitors who already have loyal customers.
(2) Are they doing anything special in their operations to differentiate themselves from competition? The general mani/pedi process seems rather straightforward but I think there are several opportunities to innovate and make the process more efficient. For example, many salons struggle with managing the balance between reservations and walk-ins. Perhaps they could dig deeper into understanding the demand trends for each and staffing better accordingly. Additionally, is there a better process for collecting payment? Often, the experience is interrupted by transacting which can be awkward for the customer. Perhaps there is an opportunity to use digital solutions to solve this issue.
Great post and I look forward to continuing to follow the company!