Really interesting. A lot of fliers hate Spirit, and according to Consumer Reports it was rated the absolute least popular airline in 2013, and yet clearly a lot of people are still flying Spirit. Given their business model, they clearly aren’t in the market to court business travelers. Would be interesting to understand how they think about growth given that. I definitely see a few places where Spirit can add a lot of value (direct flights between smaller, non-hub cities, for example), and wonder if these are viable strategies for them.
Super interesting; thanks for the post! I’ve always thought of Blue Apron as a bonding activity with my SO more than a home-cooked meal. At around $10 per person, Blue Apron is more expensive and less convenient than takeout, but it’s healthier, we get to feel less guilt than if we were to eat out, and we can do something fun together.
It is pretty interesting that one of the core tenets is to eliminate waste, though, when the process involved the presumably expensive sorting, packaging, packing, and shipping of individual weekly boxes to customers. I wonder if there are any numbers behind this; it is possible that the Blue Apron process is actually more cost-effective and environmentally friendly than having the same customers shop at supermarkets, which themselves need to be sourced for and stocked.
Totally agreed on McMaster-Carr being a phenomenal company, not only for labs but also poor, sleep-deprived mechanical engineering undergrads. I once realized I needed o-rings for a project that was due in just a few days; a few searches later, I had 4 different o-rings on their way to my dorm room from McMaster-Carr, all without the need to borrow a vehicle, drive off-campus, or search high and low across multiple stores to find the exact specs I needed. My only complaint was that they arrived in two days instead of one, ha.
I never realized they limited their advertising and marketing on purpose. Thinking about it now, it makes a lot of sense: it’s expensive to stock so much inventory and provide extensive customer service; they want to serve only their target customers, who derive the most value from their services, and are happy paying the high margins. I wonder how they’re thinking about growth.
Rachel’s points make a lot of sense, but I actually think it’s smart of PP to move into the print market. It’s hard to convince people to pay for things like e-cards online. PP obviously creates a lot of value for the event-planning process; how could they better capture this value? One obvious way is big events, like weddings, where people’s general willingness to pay for the perfect save-the-date or invitation is much higher. Weddings, however, are one of the few places where consumers still expect print, and PP almost have to get into print to capture this segment.
Furthermore, PP has the right assets: the wedding industry is hugely lucrative, and many businesses pay a lot for access to the susceptible groom or bride at this specific point in their life. PP already has access a loyal base of customers who are used to doing things online, a large database of designs that these customers love, and a data-centric understanding of customer taste and how it might evolve. They can drastically extend the average customer lifetime value if they can capture even a limited number of customers during big “print” events in their lives.