Month: January 2019

Shopping for underwear at a department store is so old-school. Plus, it’s inconvenient and uncomfortable. And for entrepreneur Jonathan Shokrian, it was an eye-opening moment that spurred him to launch MeUndies in 2011. With sub-par product in hand, for which he felt like he’d overpaid, Shokrian had the same epiphany that many disruptor brand creators…

With apologies to Spuds MacKenzie, few ad stars in 1989 were as big as Bo Jackson. Having gone pro in both baseball and football, his athletic range made him an icon, thanks in large part to Nike’s massively popular “Bo Knows” campaign. While Jackson retired from baseball in the mid-’90s after suffering a career-ending football…

Meal-kit subscription service Blue Apron is losing tens of thousands of customers on a quarterly basis. To try to recoup some of that revenue lost, it’s focusing on getting existing customers to spend more, while recruiting more customers to the platform that are similar to its most loyal members.

The strategy includes prioritizing outreach on customer groups with higher potential retention rates and brand affinity, said CEO Bradley Dickerson. To do so, it’s linked up with outside retail partners in an effort to reduce standalone marketing costs: A partnership with Weight Watchers recruits members as Blue Apron subscribers, while Jet.com sells Blue Apron meals and meal kits. The goal is that both Jet.com and WW will offer access to customers accustomed to spending more on healthy food.

In the fourth quarter of 2018, the company saw a small lift in average order value, at $58.12, increase by $1.33 compared to the previous quarter, and average revenue per customer, at $252, an increase by $19 over last quarter. But net revenue decreased 25 percent year over year to $140.7 million, and as of Dec. 31, it had 557,000 customers — a loss of 89,000 customers compared to three months before, and a loss of 189,000 customers year over year. Chief financial officer Tim Bensley said he expects Blue Apron to continue to lose customers as it shifts focus to acquisition and retention of higher-value customers. It’s part of a pivot that began late last year, when the company shifted to a flexible service model, including distribution through retailers, and giving customers more choices, including quick changes to plans, meals that take less time to prepare, and limited-time, specialized meal kit offerings.

At this point, Blue Apron’s partnerships look more like lifelines. Despite the change in Blue Apron’s approach, analysts say the strategy doesn’t adequately address the business model’s core problem: Blue Apron is situated in an uncomfortable middle ground between restaurant delivery services and grocery stores, driving its potential customer reach to a too-narrow customer group. It’s the reason why other food delivery startups have struggled to scale.

Freedonia Group analyst Cara Brosius said Blue Apron’s efforts to move into retail distribution and flexible ordering options likely won’t be enough to make the business model sustainable. Blue Apron said it intends to grow its retail partnerships, and it’s talking to other potential partners. It’s also expanding its retail product selection. Starting Friday, it’s rolling out a pared-down $7.99 version of its meal kit called Knick Knack that will be sold through Jet.com. It will include sauces, spices and grains and other foundational elements of meals that customers can pair with store-bought produce and protein.

“Blue Apron has tried to expand its customer base with partnerships that offer more options for online ordering, but this has not been enough,” Brosius said. “The meal kit subscription delivery model simply doesn’t work for a lot of potential customers. Sometimes people want to cook a meal on a whim and don’t want to wait for a meal kit to arrive one or two days later from Jet.com.”

Blue Apron is touting its WW partnership as an example of how a focus on a specific group of customers — in this case, people who have signed up for WW — will help drive the business to profitability, which it said it expects to achieve later this year. Morgan Springer, co-founder of a now-defunct food delivery startup Sprig, said he thinks selling through WW is a good strategy, but the company’s broader retail plans, including kits that can be combined with store-bought groceries, carry more risk.

“The WW collaboration is a smart move — it’s a really focused audience with specific needs the product can be tailored to, [but] I’m skeptical of the ‘buy your own produce’ angle on the reduced meal kits,” he said. “At that point, they’re just another brand at the grocery store without a ton of experience in that game.”

By going public in 2017, after raising nearly $200 million in venture capital, Blue Apron is an example of the risks that come with putting a next-generation retail model in front of quarter-by-quarter scrutiny from stockholders, the pressure of which could push the company in too many directions as it scrambles to survive. Blue Apron’s biggest hope, Springer said, is to go as niche as possible, like selling meal kits for parents with kids, or kits for specific diets. By going too broad, they risk not being able to differentiate enough to retain customers.

“Their core risk is losing the value proposition as they chase all these angles — ‘why I am buying this versus cooking or takeout?’,” he said.

The post Blue Apron is hemorrhaging subscribers as it expands retail partnerships strategy appeared first on Digiday.

New York Jets Safety and 2019 Pro Bowl MVP Jamal Adams joined PepsiCo’s new Snackbot delivery robot in Atlanta on Thursday morning to distribute drinks and the chips showcased in Doritos’ 2019 spot to Super Bowl sportscasters on Radio Row at the Georgia World Congress Center. The six-wheeled Super Bowl Snackbot has a new on-brand…

Volvo’s game plan for the Super Bowl has nothing to do with the sport, but everything to do with distracting viewers from it. The campaign, dubbed “The Longest Drive,” directs people to a website, where they’ll then have to watch a test drive video of the S60 Sedan. Three lucky viewers who look at their…

Devour created two versions of its Super Bowl spot, a longer spot that uses the word “porn” and a shorter version that doesn’t, since the word “porn” isn’t supposed to be uttered during a Big Game spot. The Kraft-Heinz brand released the longer version of the ad earlier this month. Today, the company has unveiled…

Spending more than $5 million on a television ad during Super Bowl LIII is a great investment in some cases and a way to be part of the cultural phenomenon that Super Bowl ads have become, but brands are also turning to social platforms to deliver their messages before, during and after the Big Game….

With Super Bowl LIII just three days away, CBS’ ad sales team is working to finish up its business for the Big Game. The network, which no longer declares a sellout ahead of the Super Bowl, has been working with half a dozen clients this week through several different scenarios, including potentially extending their spots…

Alphabet, Inc. has purchased time for two full ads promoting its Google brand during Super Bowl LIII this Sunday. A Google spokesperson confirmed the Big Game buy but did not provide any additional information. At this time it is unclear when the ads will run, which products they will promote or which agencies are handling…