The Best One Yet - “Crazy in love (on a bike)” — Beyonce’s Peloton deal. Spotify’s podcast puberty. Ulta Beauty’s Inception retail.

Episode Date: November 11, 2020

Peloton snagged a deal with Beyonce because Peloton is not in the industry you think it’s in. Spotify’s latest $235M acquisition is its most important yet, even if you’ll never listen to it. And Ulta Beauty’s quitting on malls to move into Target… which kinda turns Target into a mall.$SPOT $ULTA $PTON $TGTGot a SnackFact? Tweet it @RobinhoodSnacks @TBOYJack @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Learn 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. And this is Snacks Daily. It is Wednesday, November 11th. Feeling like we're halfway through the week, feeling good. This feels good. Tomorrow, I think, is going to be like the new Friday. Jack, is this snacks better than what we did yesterday?

This is the best one yet. Can I hit you with our first story? Please, I'll take it where we got, Jack. Because if you like it, then you should put a ring on it. Pelton just signed Beyonce. Snackers, we're looking at the Halo effects of Peloton and Beyonce that put love on top, finally. For our second story, Spotify just made.

its most important podcasting acquisition yet. Honestly, Jack, this is the one deal you are not going to really see or here. Technically here, I guess. Technically here, I guess. Technically here. For our third and final story. Alta Beauty needs a place to crash. So Target has cleared out 1,000 square feet at 100 of its stores. Malls are out.

Full malls within targets, those are in. We are talking Inception retail, a dream within a store. But Snackers, before we jump into that, honestly, that is a wonderful mix of stories today, Jack. I love your sweater, by the way. The 11th hour of the 11th day of the 11th month. That is when armistice with Germany and the Allies went into effect ending World War I. So to celebrate today, November 11th, we celebrate Veterans Day. Today is Vets Day.

Banks are closed today, which is kind of awesome. Markets are open, though, even though we think markets should be closed. Probably should be closed. Also happens to be a day when veterans can get like literally anything for free. everyone's giving it away. It's an Oprah situation. As everyone knows and no one questions, guac is always extra, except for former colonels on November 11. No, you get as much guac as you want. So Jack and I were talking about this before the pod. Honestly, we think markets should be closed on Veterans Day 2 because if you think about it, veterans, they basically run business. Nike, for instance.

The founder, Phil Knight, enlisted in the Army after college and was in the Army Reserves for years. FedEx, the first brand, by the way, to become a verb. and still CEO, Fred Smith. He learned logistics in the Marines, and we assume he was trained in Chicago. Chicago does logistics. How about Walmart founded by Sam Walton over in Arkansas? Correction, Captain Sam Walton, who was enlisted in World War II for the Army, fighting in either Europe or Asia, I'm not sure. Jack, how about over here at Robin Hood? We got our very own LaSalle Vaughan, compliance officer, and Navy vet. LaSalle helped us launch Robin Hood Snacks, and he makes sure every one of our podcasts is honorable.

Snackers, Jack and I could run out adjectives here, but a few off the top of our heads, leadership, how about bravery, charisma? Back in business school, if you want to ace the case study assignment, you'll want a vet on your team. Yeah, Jack, you end up, maybe have like the ex-consultant

and what's the ex-consultant going to do. She will crush the spreadsheet shortcuts. Yeah, she will, she will. But Jack, how about like the former Navy SEAL in your business school project group? The Navy SEAL runs a tight ship. He'll make sure the project is top-notch, delivered on time, and most importantly, he'll make sure that Timmy isn't slacking on the

project. Oh, that one is so key, Jack. Veteran Snackers, thank you for your service. And thank you for being a critical part of the economy. We salute you. Let's hit our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way.

The snacks about the hair 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 about security. Right. Snacks is digestible. Business news for you. Robberhood Financial, LLC, member Fenra slash SIPC. For our first story, Beyonce just signed an exclusive deal for her homecoming album with Peloton. Because content is king in the media industry and Peloton is a media company. We should point out that curation is queen.

We always got to weave that in. Now Peloton has been like, it's been trying to. to convince people for years, you got to quit the gym membership and just get a Peloton instead. I'll tell you, the pandemic, kind of helped them with that argument. Basically made the pitch for them. Yeah, on its IPO, which was one year ago at the NASDAQ stock exchange, Nick and I were physically there in New York City. We were there. Yeah. In athleisure. Shares started trading at $27 each. Boom, the output has screeched upwards. We're talking $104. The stock is in triple digits now. And the stock has nearly quadrupled from day one.

Which leads us to this wild headline, Jack and I noticed yesterday, Beyonce's homecoming, a live album is coming. Not to like Spotify or title. No, no, not to like your MP3 player 20 years ago. It's coming to Peloton. It's coming to a spin bike because remember, music is core to the Peloton fitness experience. Yeah, the 90s playlist, it like greases the flywheel over on your bike.

Another thing to remember, the embarrassing music lawsuit Peloton had to deal with last year. Jack, I remember it like 2018. Ed Shearons on his Peloton and is like, wait a second, I'm listening to my own music and I'm not getting paid for this. Snackers, I'm trying to think of a song that includes stealing in the lyrics right now and I can't think of one. Well, that was awkward for Peloton because you know, you can't buy a one single like $10 Spotify account and then blast that to millions of people. That's what Peloton was allegedly doing. Well, Peloton settled that lawsuit and now they only use music for their workouts that they very clearly have paid for the rights to broadcast.

Snaggers, you may have noticed your 1980s booty beast ride is like the same songs on repeat, and this is why. It's like the public domain music that you find on PBS. You're not that happy. You're not writing home about this kind of thing. But here's the funny thing about that music library that Peloton now has. It doesn't really cover everything. And as part of this announcement between Peloton and Beyonce, Peloton said, no music is more requested by Pelotoners than Beyonce is. Then Beyonce. Now, Pelotonistas are going to be getting Homecoming.

Homecoming, the live concert performed at Coachella with an HBCU pep band. Jack, nothing gets you up to hill like some snare drums and a tuba blasting your ears at size volume 12. It's a fantastic album I highly recommend, but they're going to build special workouts both on and off the bike at Peloton. That's Parkets Key. completely focused and choreographed with that album from Beyonce. So Snackers, here's another interesting twist in this dynamic partnership. You don't have to be rolling in a Peloton to actually celebrate this news. The Homecoming album was created by Beyonce to celebrate Homecoming weekend at historically black colleges and universities.

Yeah, aka HBCUs. Now, here's the thing. Those students, and like any students, you're not sticking a like $1,800 Peloton bike in your dorm room because you can't afford the $1,800 Peloton bike that could go in a dorm room. So to make this exclusive, Beyonce and Peloton are offering two years of free access to the Peloton app to students at 10 different HBCUs. The key is the app, so you don't actually need the bike for this. Like, Jack, do you know what I'm doing right now?

Core workout? I'm doing the formation push-up. There you go. It looks like you're engaging your core at the same time. So, Jack, can you get into third's position and tell us the takeaway for our buddies over at Peloton? Peloton is more like Netflix. Snackers, then it is like Nordic track. All right. So Jack and I jumped in Snacks Stop. We went all the way back to Peloton's IPO paperwork. And Jack, can you please list off all the industries? Peloton says it's

in on page one of that IPO paperwork. On page one, Peloton opened up first impression to the public markets. We are a technology, media, software, product, experience, fitness design, retail, apparel, logistics company. And you can actually make an argument for each. Yeah, you can also say a furniture company. I mean, you don't have to stop there. By the way, Jack, if any startup founder went to a venture capitalist office and had a pitch deck that said this, they would be laughed out of the office.

They would be burned right there in their Patagonia Vass. Feedback, focus. But this deal with Beyonce reveals what industry Peloton is really in. Yeah, Snackas, the deal is based on the homecoming live album. Funny, so was Beyonce's Netflix deal. Also based on the homecoming live album.

Jack and I are looking at this, and the same concert is a two-hour live concert documentary, on Netflix and now basically on Peloton. I've seen that documentary too and also recommend that. Snackers, Netflix and Peloton both are buying the rights to the same Beyonce concert because content is king. And they have the same exact purpose for making this deal. To drive engagement of existing users

and attract new ones with this new content. Because both Netflix and Peloton are at their very core media companies. For our second story, moisture is the essence of wetness. And wetness is the essence of Alta Beauty, whose mall locations have a major problem right now, Jack. Merman, pop, Murman. The stock just jumps 6% we noticed because the beauty chain is opening mini shops within targets.

Snackers, Nick and I want to first walk you through our transformation of, like, college dudes who had no routine to like... I was roommates with Jack. We'd go to the bathroom at the same time, and maybe we would brush our teeth, maybe we would get water, then we would go to bed. Then we'd go to bed. Then we'd go to bed.

Yeah, then we'd go to bed. 30's us, we first apply a cleanser, then a serum, then a night cream, then an under eye cream, then whip open the meditation app so Matthew McCona Hay can lulles off to sleep. Staggers, Jack gives me a ring, I go over to his place. I have to like massage in a melatonin pill into his cheeks every night. That's what he makes me do. Do not forget the jade roller again.

There's a magnesium residue on my fingers. I can never get rid of this stuff. We're talking about the beauty industry, which is doing surprisingly well, even though the Pandemic means you're not seeing people. Yeah, and Jack and I have noticed like a general shift here. First of all, the look good cosmetics, not looking so good right now. Lipstick sales are down big, but wellness in the skincare category, that is thriving. Yeah, you're treating your skin like you treat a smoothie bowl.

I mean, this thing is you're focused on this and you are delicate. You're treating it clean, you're treating it natural, and most importantly, you want your skin doing it. You're probably putting blueberries on it, too, let's be honest. And with eight hours a day on Zoom, even guys are realizing it. that they're epidermis to show. It's a reality. It's happening. You're seeing it. But Ulta Beauty is the largest beauty retailer. We were shocked by this in the United States, over 1,200 locations. A thousand two hundred and sixty-four physical locations in this country.

Now, most of those locations, to be honest, they're sick from like pandemic-induced retail sluggishness, the kind of thing you'd expect right now. The other locations are just in malls, which are dying of old age. So it's not a good combination. So you're probably thinking yourself, you're like, all right, Alta Beauty, like get your stuff together. Just start selling more online. Yeah, sell online. That's basically the anti-aging cream for brick and mortar companies. But don't be so putting pressure on Alta Beauty. Last quarter, Alta Beauty, both physical and online sales fell. So like, e-commerce isn't a one-size fits all turning the key solution. Jack and I are looking at that situation. When you got both those situations happening, it suggests us that the physical storefronts and the foot traffic,

that's actually their biggest driver of sales. Which leads to today's news. Alta Beauty is adding 100 mini stores within Target stores by June. A hundred of them. We're talking like a thousand square feet. So like basically a three bedroom in Manhattan. It's going to have makeup. It's going to have skin care.

It's going to have fragrances. You're going to have like all the options there. A store within a store. Yes. Within a store. Yes. Call up Leo, Jack. That's the inception model.

Wait a second. Jack. am I having a dream within a podcast dream? This feels like I'm being Incepted because didn't we cover this exact story a year ago? This is Vouchet, dude. Disney announced many stores within Target stores one year ago and we covered it. Inception retail happened last year in this pot and it's happening again this year. So Jack, what's the takeaway for our buddies over at Alta Beauty? The pandemic's best big retailers, they're becoming our future mall. Snackers specifically, we got Walmart, you got Target, you got Best Buy. those are a new malls. These three companies, they've survived the retail apocalypse because they offer benefits that malls used to, but they offer those benefits better.

All right, the first differentiator here, these big retail chains, they have curation. Moles didn't. Walmart, Target, and Best Buy, they have great variety. They even have dining halls in store except Best Buy, and there's no creepy empty storefronts like you see in Moll. Plus, these retail chains, unlike malls, have crushed it on digital. You want curbside pickup? Same day of delivery? Check. Order in store, deliver at home. Seems less convenient, but I'd like that option.

We got them. Mall's never offered that. Nope. And then finally, the final key that these retail chains have malls didn't, they got grocery stores. Groceries. That means they are an essential business

in case we have another outbreak. They won't have to close down. Boom, they have the cloak of essentiality. Now, that's why companies want space in these new modern malls like Target, not in actual malls, aka Inception Retail. Target now has Disney

and Alta, mini stores within their stores. Best Buy has Samsung stores within Best Buy stores. Walmart hasn't done one of these yet that we've seen, but we think they might soon. Snackers, what do you think? tweet us at Robin Hood Snacks. By the way, Jack, you know what I think Walmart's going to put within its first store? Target. Within a target. For our third and vinyl store, Spotify, just dropped another quarter billion dollars on its most important acquisition yet. Sorry, Snackers, you can't listen to this acquisition. No, you can't. You're not going to be able to. But Also, Spotify, it has been on quite a spending spree. Daniel, like the CEO, he's like pretty woman shopping montages. I'm going to drop the second Julia Roberts line in two weeks. You made a mistake. A huge mistake.

Julia, send us a snack fact already. Geez. Now, Snackers, Spotify, it's already dropped literally a billion dollars on podcast content in just the last two years. But this is the part of the podcast industry that you can actually listen to. Yeah, you've paid attention to these. You've heard of Spotify acquiring entire podcast companies like The Ringer for sports. Gimlet for crime stuff, Parkass for like darker crime stuff. Then they made a New York Yankees move. They just signed a bunch of people. Like exclusive podcast talent,

Joe Rogan, Kim Kardashian, the Obamas, even Batman, like DC Comics, literally. See, you probably like didn't pay much attention when just yesterday, Spotify said, hey, we're going to spend a quarter billion dollars on a podcast company you haven't heard of, but you should definitely pay attention to this.

This is a behind-the-scenes company called Megaphone that helps make the podcast industry work. It's not podcast content, it's podcast technology. Now, full disclosure, Nick and my homepage on our Chrome browser is megaphone.com. There is like, the number one page I go to is Megaphone. The number poop page I go to is it's Megaphone. Megaphone tells us how many people have listened to our pods, and Nick and I are like obsessively texting each other.

I'm like, Jack, so was yesterday's the best one yet? Literally, yes. According to Megaphone, it was. More people listen. That's how this rolls. So that's why Nick and I. I use megaphone. Everyone else in the industry uses megaphone for its hero product, which is called the Target Marketplace. Yeah, it's a different thing. And basically what this Target Marketplace does is it inserts ads based on you, the listeners, interest, or your demographics, or your purchase history of other things online.

The reason why Nick and I don't use it is because we don't have ads on this pod. Also a disclosure. Now, let's say you're a founder of a mattress startup. And your mattress company, I don't know, wants to run a whole bunch of promos for, mattress codes on podcasts. Well, you could buy out the entire ad inventory on one huge podcast, like the New York Times' Daily Podcast. That's how you'd probably do it. But here's the problem. They're like a whole bunch of listeners who don't need a mattress or just bought a mattress or don't sleep so they don't use a mattress. And that would be a waste if they heard an ad for a mattress. Just like if you hate dogs, what's wrong with you? But also, you shouldn't hear a chewy ad on a podcast. So Megaphone is trying to eliminate that waste with their target. Marketplace, which strategically acts the way that social media companies act with their ads.

Yeah, so basically, instead, this megaphone target marketplace will place ads on many podcasts, but only for specific listeners. Maybe you only hear Mattress, Mattress, Mattress, if you're a podcast listener under the age of 36 living in a certain city who recently bought pajamas online. Or maybe only hear Mattress, Mattress, Mattress, Mattress, if you're the people who started listening from a new IP address, which would be a sign that you recently moved and Jack, you're going to need a new mattress. You're going to need a mattress, mattress, mattress. So we're calling this a learned quosition for Spotify. They're learning how to target podcast listeners with ads as good as Zuck does.

Not a zucking, just like Zuck. So Jack, what's the takeaway for our buddies over, mattress, mattress, mattress at Spotify. Podcasting is still in its puberty phase. Snackers, Spotify did this deal to make podcasting, get out of bed, button up a shirt, shave, and grow up already. Just about every podcast in the business makes money through advertising, not through subscriptions. And that advertising business, Jack and I look at it and it's honestly, it's more analog than modern day digital. Think about a podcast ad. Everyone's like sub-enthusiastically mentioning some promo code that they feel like they've said like six or seven times. They're like drawing out the ad past like the 59 second mark. Because you got to get to a minute.

Buffalo Trace Whiskey, Pitney Bow's Printer System Harry's Razors. By the way, Jack and I used to do these ads, before our company was acquired by Robin Hood. We had a lot of fun doing the ads. Just want to say that. Those three companies you just mentioned were our first three advertisers. They were fantastic. That's how we cut our teeth with a Harry's razor.

But big brands like Coca-Cola, they just haven't shown any interest in any podcast ad so far. They want targeting with their podcast advertising, like Facebook would give them on social media. So Spotify has already brought you and me listeners to podcasting by buying great content. But now Jack and I think Spotify, is buying ad technology to help the podcast industry grow up out of puberty and make more money

through targeted ads. Jack, can you whip up the takeaways for us over there? Guess what is coming to Peloton, Nick? What's up, Jack? What's coming, man? Beyonce's booty blast and butt burner. Same deal on Netflix signed, Peloton signed because Peloton is a media company. For our second story, Alta Beauty isn't doing great this pandemic. Yeah, they need that foot traffic. They used to get mall so they're inceptionizing themselves. into a target. For our third and final story, Spotify has already brought listeners to podcasting. Now it's trying to bring in the ad dollars. Time for our snack fact of the day. This one of follow up to yesterday's Supreme Story from Jared Levinson tweeted us all the way from Scranton,

Pennsylvania. Great guy. Turns out the original Supreme Store in New York City was on Lafayette Street, probably close to the old police department building, which is beautiful. Which is a gorgeous building. That really is fantastic. It's one of the most underrated buildings in New York. Maybe the best. It is an incredible building. Now, it was designed its original Lafayette Street store with skaters in mind because they put in like a very unique architectural design. I think the architect was named Tony Hawk because they only put clothes around the perimeter of the store. We're talking a big space was left in the middle so that if you were skating in, you could literally skate into the store, unobstructed with a backpack on and not hit any of the clothes.

Grill it in a China shop? Skater in a Supreme Store. Snackers, before we go, if you're listening on Apple, scroll down. We'd love it if you drop us a five-star review. And if you're listening on Spotify, it turns out you can share us to your story on Instagram and people can like check out the pod with one click. It's pretty cool. If you know, you know, Jack and I will catch you tomorrow. See you then.

And before we go, big shout out to the Stock Club girls, Nikki, Ashley, Torra, Bay, Kelsey, over in Vancouver, Canada, snacking together. Apparently it's all of their birthdays. Well, Vanie and Nate, they're moving into. so big congrats to them in San Diego. And congrats on getting your first home to Paul and Jamie in Miami, Florida. And Svana and Rob, they wake up every day with pancakes, like on their anniversary, from Braintree, Massachusetts.

And happy third anniversary to Jeremy and Azizek Kelly in Richmond, Virginia. And happy birthday to Venet Shen over in Shanghai, now living in Atlanta. And David Raphael in Tel Aviv, Israel. And Morgan Wiki in Medina, Ohio. And Janelle Tangano in Santa Clarita, California. And Ali Nakamura in Northern Virginia. Virginia. And Matt and Danielle double birthdays Atlanta, Georgia. And Zach Field, Orlando, Florida, and Danny Gaffin in Marlboro, New Jersey. This is Jack. I own stock of Spotify. 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, Inc. or any of its subsidiaries or affiliates. The podcast is for informational purposes only and 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.