The Best One Yet - Airbnb launches (crazy) “Adventures,” Chewy.com’s 60% IPO surge, and Verizon’s new “never forget” dongle strategy

Episode Date: June 17, 2019

Chewy.com’s IPO is based on the concept of “pet humanization,” but it’s showing how to beat Amazon. Airbnb’s insane new “Adventures” feature lets you book wild trips you probably didn’t realize were possible (because it’s facing competition in every direction). And Verizon launches a piece of hardware to help you not lose anything, but it’s all part of a “switching costs” strategy.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. This is snacks daily. It is Monday, June 17th. We got the best one yet. Straight up T-Boy over here. Markets, what happened to us? Well, there were three crazy IPOs. Who wasn't IPO? You got fiber, crowd strike, Chewy. They all like blew up on the stock market. I guess we didn't IPO. Investors are hungry for new business models and new stocks. That led us to our three stories we've been curating all weekend for you. Yes. Chewy.com, IPOed Friday. The online focused pet store jumped 60% on IPO day. And we're going to look at all the reasons why. It's a case study and out-amazoning Amazon with Fido. Second story is Airbnb.

It just launched a new service called Adventures to get you deep in your most bragable trips. Jack, apologies, I'm on my way to Nairobi for my two-day training session with the Desert Warriors. What is a Desert Warrior? I'll tell you when I return from the two-day trip. Third and final story, Verizon just announced this weird tracking device to help the affluent careless from losing things. You know who we're talking about. It's all about customer loyalty. Before we get into those stories, we got a big number to announce.

How many commas? Two on this one? Two comma number. Two million listens. Very nice. Of snacks daily have happened since we launched at the end of March. Thanks to our snackers who are the ones doing all the listening. Two million listens.

That is an amazing number. I am so proud to have got there with you guys. We were thrilled. We've got the commas up on the board. We love having you guys. We got another number here too. Yeah. Fewer commas.

Single comma on this one. 5,000 is the number of Twitter followers we hit last week. Just in the last couple months since launch, we have At Robin Hood Snacks, 5,000, you guys. I got to say, I love getting back and forth in some Twitter action with you. We're getting a lot of back and forth. Nick and I, like, use our personal accounts, like, on the daily to respond to some of the thoughts we get. Who we got here?

We got Del Carter, who introduced a really good comparison of Quibi, which we covered last week, with Snapchat. Amy had some issues with how we covered cybersecurity calling it unsexy. Amy, apologies? No, we actually got back to Amy. I think we hugged it out virtually. We're like on good terms now, Amy. And then Alberto Reyes, you're giving us daily tweets. Just keep doing what you're doing out, Burdow.

But honestly, we love your feedback from the stories we covered. We also love your story ideas. Send them our way. Send them our way. We love you guys. Thanks for getting us past two million. Now, before we get to our three stories, listen to these important words. And let's hit three million.

You're tuned in the snacks daily. We spoke to the lawyers. Snacks about to hear ain't food. It's air candy. They don't reflect the views of the robberhood family. It's all informational just so. You know, we're not recommending any securities. Nope.

It's not a research report or investment advice. Not an offer or sale of a security. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, chewy.com stored 60% on its IPO day, and it's basically a convergence of like a lot of trends we really make it. Chewy.com, you ready for the sales pitch?

You got to hit me with this. All right. It is pet food and supplies online, low prices, free shipping. Okay, so that's what they say. But when Jack and I jumped in snacks style, we noticed something different. It's not just that it does all that. it's that it makes you feel like it's your neighborhood down the street brick and mortar store. It's got a human touch. Also, Hamlin, the French, he needs subscription dog food, and it comes through Chewy.

That's how this thing happens. Now, in 2017, here's the background on Chewy. PetSmart came along. They're a brick and mortar chain. And they bought the company. Now, they've actually struggled since. Yeah. And they're selling the company. And they really need cash. So they're selling off their crown jewel, which is Chewy.com. They've spun off their cockapoodle and this is what it's done. So shares started trading Friday. It was worth $3 billion. $2 million, Chui was when it got acquired by PetSmart in 2017. What's a value in now? As of Friday stock price jump, it's worth $14 billion. That's equivalent of like, it's about one lift.

It's almost as valuable as Lyft. The entire Lyft company. And sales growth is strong. 68% higher sales this year versus last year. Still an unprofitable company, but it thinks it'll get there. Now, Chewy's like basically playing around here with a core millennial trend. Yeah, this is a Globo trend. They're talking pet humanization.

They mentioned this term pet humanization throughout their IPO paper. So in the United States, there was $72 billion spent on pet supplies and pet food last year. That's up 4% from the year before, but it consistently has been growing since the recession. Can't stop this thing. Get this, 90% of dog owners and only 86% of cat owners. Interesting distinction there. Consider their pet part of the family. Who are the other 10%?

What are you doing, and why don't you love your pet? There are a bunch of monsters apparently. It's disgusting. We don't want to hear from you people. So if you think it's part of your family, you're willing to spend. on quote unquote premium consumable. That's exactly what they talk about in the IPO paperwork for Chewy. We're talking strollers, costumes, preventative health care.

You know, the kind of stuff you typically would spend on kids, humans. They're spending it on four-legged animals. Now, this is actually the convergence of a whole bunch of trucks going on. Millennials are getting married later. That means they're having kids later. They're not buying houses as soon. So they got to hook up that Labradoodle with the Halloween costume. Yeah, they got to make some kind of commitment.

If the dog doesn't look like a pumpkin on Halloween, what's the point of having the dog? So millennials are putting money into their cockapos instead of these other kind of white picket fence things. Yeah, we've got a lot of things going on here. Now, what's the takeaway, Jack, for our buddies over at Chewy? The way you beat Amazon loyalty. And that's what Chewy's doing. Get this. This is wild. Jack and I couldn't believe this.

On the emotional end, Chewy.com will send flowers to you if your pet dies. I don't know how it knows. Oh, actually, maybe you have to cancel your subscription. I guess so. If your pet dies. They'll also write handwritten loyalty cards, and they randomly choose customers of Chewe. com and ask them to send in picture their pet so that they can do actual portraits of their pets for the customer amazon.com is a pretty good e-commerce provider yeah not chabby guess what chui offers

that amazon doesn't they will answer your call your phone call buy a human for customer service within six seconds no joke you call they will answer a person finally subscription i live in an apartment building in san francisco every monday i see a couple of big chewy boxes because people get refilled weekly. Because when you order from Chewy, they do this thing where if you order a big bulk bag of dog food, which you need to do like every week, they will do free shipping. And that gets you to throw in a bunch of other things into the car. Set it and forget it. You got to order more in the winter because your dog needs to warm up. Woof. For the cold. For our second story, Airbnb just launched Adventures, which is a freaky new service that is going like way beyond homebookings. And let's

pause for a second. Airbnb's been pretty busy. It's doing a lot of things right now. It's getting ready for its IPL. It takes a lot of prep work. Probably next year, I think. And according to crunch, it's actually achieved profitability two years in a row. Impressive Airbnb. Now, what's the pitch for Airbnb's new adventures? Jack, I feel like I should be doing this in an Australian accent when I'm going to launch this thing. It's a collection of 200 multi-day freakishly adventurous tracks that cost less than $5,000. They're curated by local professionals and they're insane. Exactly. Picture crocodile Dundee is that local expert. Let me take that a step further with an example. This is best illustrated with examples. Ten-day horse.

horseback tour in Mongolia with the nomadic reindeer people for $3,100. Is that something you're into check? No, I prefer a two-day seaweed and seafood safari off the coast of Sweden diving for kelp for 885 for first. Very nice. Let's say the water's a little too chill. You want to take things a little further south, get warmed up. Can I interest you in the two-night, quote-unquote warrior camp in Kenya, where you live in a tent,

work out with a tribe just outside of Nairobi for a cool $500. So the crazy thing about these adventures, all you have to do is show up. We're talking lunch, dinner, your TP. It's all taken care of when you pay that one flat fee. You just got to get to the TP and everything will be taken care. The nomadic reindeer people are there waiting for you. Now, this trend is driven by Instagram. Totally. The worldwide adventure travel market has grown seven times in the last 10 years.

Airbnb saw this coming. So in 2016, they launched something called Experiences, which was like, you know, how you make pasta or sign up for like a local knitting class. soft core version of Adventures, which was just announced last week. Adventures is about living for the Graham. It's like going Walter Middy with your life. This is the kind of stuff that like, if you'd heard about it from someone else, you'd say, did you write your college essay on this thing? If you've had a really sheltered life, take one of these adventures and you'll have something to run. You're like totally said it makes up for everything else you've been doing. Now, Airbnb is doing this because competition is coming from every possible angle right now. All right. From below, you got VRBO and Homeway. They are

growing fast into the home sharing market. From above, you've got Marriott, the big hotel chain, which is launching an Airbnb-like booking service. And then jabbing Airbnb from the flank's trip advisor, which has a fast-growing experience booking platform. So, Jack, what's the takeaway for our buddies over at Airbnb who just launched adventures crazily? Airbnb is finally targeting non-travelers. Competition in this whole home share in like hotels market, that is going to hurt profits. Exactly those three areas we just talk about. Yeah, so Airbnb doesn't just want to fight in the mud with those guys. It wants to offer something new for homebodies, which nobody is targeting. And that's why Airbnb's adventures is all about all you have to do is show up. Our colleague, Kathleen,

recently booked an experience on Airbnb. Totally. She lives in San Francisco. Guess what? She did a night photography class in San Francisco. She's just looking for a weekend activity and booked on Airbnb. That's exactly who Airbnb is targeting. Also, there's rumors that it's going to launch a TV show to give people to itch for travel. Like an entire streaming service, the next thing you got to wonder is maybe they buy away suitcases. That would be pretty cool. For our third and final story, this one's kind of crazy. Verizon, the telecom company, just launched a smart locator device. It's called Smart Locator.

We thought this was fascinating because why is Verizon launching a little smart locator device? Let me give you the sales pitch. Verizon says, never lose anything again. Just attach our little locator dongle thing to your purse, your keys, your dogs, your kids, your kids having play dates. And if you ever lose it, we will track it down on your app. so you're like within an inch of that. And the reason they're doing that is they packed this thing with like enough technology to launch a rocket. You got like Wi-Fi, LTE, Bluetooth, and GPS.

So that the accuracy is pinpoint. The only one who has better accuracy tracking is Professor Xavier. This thing has up to five days of battery. And then the app is called Share Locator Hub. So you can actually share that with like up to 10 people. Right. In case you want to have a pack to track down your dog. Oh, the keys are in the second drawer.

Boom. You might be thinking to yourself. doesn't this already exist? And good thing you were thinking that because it does already exist. It's called Tile. Yeah, it's a private company. It already's been doing this for a few years.

You attach the thing to your keychain. You don't lose the keychain. Tiles value prop is all about the keychain. It's not as powerful, though, and it's much cheaper at $30. Right. Verizon's little dongle here is going to cost $100 and then $3 a month afterwards.

You're subscribed. Now, we all know who Verizon is targeting with this product. It's called the affluent carolus. We all have that friend. Let's call him, I don't know, Tim. buys a $800 candidate goose jacket and then on day two of using it leaves it at the bar. Yeah.

The locksmith knows Tim by name. Let's just put it that way. Now, if there's enough affluent careless, maybe Verizon could make some money off this thing stand alone. But we're thinking there's a much more specific strategy here. So, Jack, what's the takeaway for our buddies over at Verizon? This is all about customer stickiness. The best thing a brand can achieve is customer loyalty.

We were just talking about it with Chewy. Right. If your customers are loyal, you can raise prices and they won't live. leave you. But the second best thing a company and a brand can get is stickiness. Make it harder for customers to leave you. Figure out how to build up what we call high switching costs. Because the harder it is to leave, the more they're going to be with you. So let's be honest, no one is loyal to their wireless provider. No, this is not like a, you don't love this relationship. But if you own and use Smart Locator, you are less likely to switch away from Verizon to AT&T once they offer a lower price.

Because you're totally dependent on this product that knows where all those things you're constantly losing. Fido and maybe your baby are a hatch to this thing. You don't want to switch to T-Mobile. And that means you're sticking with Verizon. Jack, can you whip up the takeaways for us to start the week? Chooey.com is winning your pet e-commerce loyalty by paying attention to the little details. Pet humanization. It is a, that is actually a disturbing sounding sounding sounding. Airbnb is way past home sharing and it's expanding to experience an adventure booking. If you're booking one of these things, we know why you're booking one of these things. These things are insane. These things are insane. Verizon has the perfect thing for people

who lose stuff, but it's really about keeping you stuck to Verizon. Gotta love those high switching costs. Now, for our snack fact of the day to day, today, we're doing something a little different. We're going to test out that chewy.com thing we told you about where they said if you call them, they'll answer with a human within six seconds. All right. You ready? I'm calling customer service.

Jack's got the speaker phone up. Right now. Let's hit this. Hi, thanks for calling Chewy. Hey, Amber. My name's Jack. I'm actually the host of a podcast Snacks Daily. I was just wondering, are there any Chewy stores in San Francisco?

We don't have any stores. Oh, you guys are online only? Online only. Perfect. Thank you, Amber. Appreciate it. Check out Chewy.com. Okay. Thanks for calling, shooey.com.

Thanks for picking up so quickly. Unreal. Can't believe that. Chewy.com tells the truth. I like how we tested this one. Love to having you guys on, to start the week with us. We'll be back tomorrow. Remember, hit us up at Robin Hood Snacks.

Can't wait. Snackers, this is Jack and I own shares. of Amazon. The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only, is not intended to serve as a recommendation to buy or sell any security, and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment decision.

Robin Hood Financial LLC, member FINRA SIPC.