Today, the D2C economy is exploding. Plus, MoviePass goes to die. And the question remains: Are subscription cars the future of transport?
Your top subscription news
Twitter gold c/o Laura Behrens Wu
Sometimes Twitter is simply far too convoluted, with too many of the same tweets, hashtagging all the same trends. But other times, amongst all the noise, you strike what we like to call “Twitter gold.”
We're talking about tweets that have actual, valuable nuggets of information. The latest “Twitter gold” we found comes from Laura Behrens Wu, Co-Founder and CEO of Shippo. She tweeted insights from Benedict Evans' latest deck, "Tech in 2020: Standing on the shoulders of giants." Here are our takeaways:
- Ecommerce is massive and growing (and it’s only 15% of addressable retail today)
- The D2C economy is exploding
- Ecommerce enablement tools are powering the segment
Laura linked to the full slide deck, which is full of insights regarding D2C and ecommerce. But for now, let’s break down the four main points she shared.
Ecommerce is massive and growing. But just how massive is it? Ecommerce sales in the U.S. climbed above $500 billion in 2019. At the start of the century, we weren’t even at $100 billion. So this has been clear, steady, and upward growth.
Now, to the point on addressable retail—which covers things like cars, car parts, gas, restaurants, and bars. Ecommerce is only 15% of that, meaning that while $500 billion is a mighty number, it’s only a fraction of addressable retail’s $3.6 trillion in sales.
But still… D2C is exploding. There are hundreds of new D2C brands to watch as they gain traction over time. And after zooming in on this slide deck, I’ve got my eye on a few: Grove Collaborative, Away, Billie, Birchbox, Quip, Drizly… There are just so many.
Now that independent ecommerce has exploded—so have the platforms enabling ecommerce transactions. We’re talking Shopify, whose market cap is at $46 billion, Stripe at $35 billion, and then of course our social media faves are up there too: like Instagram and YouTube.
This deck has numerous other valuable predictions you should definitely check out. If ecommerce is hot right now, what’s going to be the next big trend? And how do we in SaaS evolve with the ever changing retail landscape?
You’ll have to read the full deck to find out.
That's a "hard pass" on MoviePass
Here’s your TL;DR… MoviePass is now officially dead and can be buried. The movie ticket subscription service and its parent, Helios and Matheson Analytics, have both declared bankruptcy and will seek liquidation, unable to find a sustainable model for its discounted service.
Here with us today is MoviePass loyal and ProfitWell pricing professional John Mangini.
Alright Mangini, bring us back to the origin of your adoration for MoviePass. What intrigued you about the MoviePass model from the start?
“From the beginning for MoviePass, it started with me as a user. I see this subscription service come out to the movies (which I love going to the movies) and as a user, I’m like, ‘This is too good to be true,’ first off. There is no way this is an actual business. Me and my friends, of course, sign up—and it actually works...
So I think that’s when, as a user, I’m like, ‘This is amazing.’ But on the business side, I hope it can last. Pretty much your thought is, ‘I don’t know if it’s going to make it.’”
MoviePass has seen quite the number of ups & downs, but you’ve stayed true. Why is that? Was it out of stubbornness or was it true belief?
“We’ll call it 'naive excitement.' I wanted it to be true. Think of when Napster first came out. It was amazing. Not that I’m saying MoviePass is Napster, however they’re very similar... [then] MoviePass comes out and they pretty much create a whole new customer experience for you to go to the movies.”
Where'd they go wrong?
“I think that the biggest challenge for them was, they honestly just didn’t understand their customers.”
This may just be the last time we talk about MoviePass on the show? Any final thoughts?
“My biggest advice to MoviePass is, well, my t-shirt is now worth more than my stock. Because I did have a lot of stock. Because, again, I was committed…. So I have a vintage MoviePass t-shirt that I will still wear.
You need to know your customers, and also know that if customers are taking advantage of a certain value metric, if it’s costing you money, there is a clear problem in place. You need to make sure you have limits in place. Even when [MoviePass] changed the limit to three movies per week, I think they were already so far past. The unlimited package hurt them so much, they just couldn’t come back from that.
Subscription cars (just a fancy lease?)
If you’re going to launch a car company, why bother with the ways of old-fashioned dealerships? Fisker and Canoo are the latest and greatest in electric-cars, looking to emulate the success of Tesla and its recently skyrocketing stock price (aspirational, to say the least).
And both of these startups recently exposed their product models and plan to offer cars through subscription.
We know what you’re probably thinking: Isn’t a car subscription essentially just a lease?
Not exactly. Subscription bundles the cost of using the car itself, with expenses like insurance and maintenance bundled into the monthly payment without a long-term commitment, revolving around the notion of “temporary ownership”—namely, a shared mobility service where customers can access a vehicle by the month. This fulfills a long, unmet need that veers from the format of minutes/hours (carsharing), hours/days (rentals), a couple years (a lease), or three years to a lifetime (an outright purchase).
By as early as 2025, vehicle subscription programs could account for nearly 10% of all new vehicle sales in the U.S. and Europe, says Forbes.
And it’s left us wondering: Who’s up next?
Recurring Rhetoric: geographical pricing
That’s it for your February 6 episode of Recur Now. Check back here tomorrow for more, and don’t hesitate to reach out to me at firstname.lastname@example.org, if you have news to spread, or input on any topic we hit.
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