The Best One Yet - 💩 “Why stocks dropped big” — The Dow’s 700-point plummet. Tractor Supply’s chicken surge. Hero’s conversational commerce.

Episode Date: July 20, 2021

The Dow suffered its biggest drop of the year because the stock market narrative can change freakishly fast. Tractor Supply Company loves farmers, ranchers and chiclets (literally, lots of chickens) ��� small niche, big profits. And Hero is Klarna’s latest acquisition to turn in-store sales associates into online influencers.$TSCOGot a SnackFact? Tweet it @RobinhoodSnacks @JackKramer @NickOfNewYorkWant a shoutout on the pod? Fill out this form:https://forms.gle/KhUAo31xmkSdeynD9Got a SnackFact for the pod? We got a form for that too:https://docs.google.com/forms/d/e/1FAIpQLSe64VKtvMNDPGSncHDRF07W34cPMDO3N8Y4DpmNP_kweC58tw/viewformLearn 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 Tuesday. Tea Boy, Tuesday, July 20th. Snackers, this is the best one. It's a TBOY. Jack, what's our first story today?

The stock market just had their worst day all year. It only took five days, you know, to change the entire stock narrative. For our second story, Clarnah just spent $160 million to buy a fashion service called Hero. Hero, they're doing conversational commerce, basically FaceTime with someone who's actually at the store. For our third. And final story. Tractor Supply Company. It's like Home Depot or Lowe's.

It is. But where the deer and the antelope play. It just had a record quarter thanks to farmers, thanks to ranchers, and thanks to chicklets. Chicklets, a whole bunch of them. Very, very cute what you did there. But before we hit those three stories. It's a really wonderful mix for a Tuesday, Jack. I love those.

Last week, we congratulated Richard Branson for safely returning to Earth after dancing and zero gravity. Yeah, well, Jeff Bezos today is getting his space passport stamp too. That means Jeff Bezos gets silver metal in the billionaire space race. Hey, Alexa, turn on the flux capacitor. But Snackers, Jeff Bezos, he's not satisfied with that silver metal. So he's going eight miles higher than Richard Branson's spaceflight was. Yeah, classic billionaire ship measuring contest. Our big question, though, that's kind of the most important thing.

This is huge. If Jeff Bezos leaves planet Earth, does that mean we have a new richest person on Earth? Technically, is Forbes going to like issue a special edition, richest magazine issue? Are we getting this today, today only? This edition will self-destruct in five hours. Jeff was like, I was richest on Earth. Now I want to be richest on Moon. So yes, Snackers, it will be a great five hours for the really, really rich guy

who holds Jeff's title until he returns back to Earth. He happens to be a French guy, the guy behind LVMH, must be nice. But it's not just a great day for Jeff Bezos and the rich guy behind LVMH. No, it's not. There's also the 18-year-old son of a private equity executive who got the golden ticket to join Jeff's spaceship too. So today, Snackers, the richest person is in space. True story. And the youngest person ever in space on the same rocket in space.

Call it the Kylie Jenner Coma. Space tourism really, really a thrill for a few people. But just a Twitter notification for most people. Let's in our three stories. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something illegal out the way. The snacks about the hearing food is air candy. They don't reflect the views of the Robberhood family.

It's all informational just so. We're not recommending any securities. 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, I mean, Jack, talk about a case on the Mondays.

The Dow, it just took its biggest one day. drop of the year. One long weekend changed the Wall Street narrative from jubilant to nervous. Okay, we're looking at the scoreboard here and the Dow dropped, all right, 700 points yesterday, Jack. Nine out of every 10 big U.S. stock dropped yesterday. A lot of red. But here's the interesting thing, Snackers. Jack and I noticed this situation, it really began before the weekend on Friday. The University of Michigan go blue. Great school. conduct a monthly survey of consumer confidence that Wall Street loves checking out. Literally in Ann Arbor, they sit down, they get a bunch of sandwiches from wherever we used to get sandwiches, Jack.

And pizza, dude, they got pizza from cottage in pizza. Has to be cottage in pizza. So these PhD students loaded up on pepperoni and carbs call up at least 500 people and they do a bunch of interviews, asking them at least 50 questions about how they're feeling about the economy. The respondents who are based all over the country. Could be anywhere. They tell us their feelings about the economy. And at the beginning of this month, the consumer sentiment fell to the lowest level since August of last year.

Okay, so consumer confidence at its lowest level since August last year because Americans are mad. There was a record number of complaints where they like yelled at these PhD students about the high prices of houses and the high prices of cars. But they're not just mad. Americans are also kind of feeling sad right now. Yeah. We're sad that the pandemic is definitely not over yet. Now, the key reason running underneath all this sadness and madness, is something the CDC also said last weekend.

They described the pandemic of the unvaccinated. This is key. It's because the Delta variant is more than three times as transmissible as like the OG COVID we were dealing with a year ago. Yeah. And the Delta variant is ripping through the unvaccinated masses in the USA and abroad. Now, technically, the vaccinated can get the Delta variant coronavirus too. Right.

Because the vaccines, they're not 100% effective. They're like 90, which is really good. But this is like extremely rare. And then even if you did get it and you were vaccinated, extremely unlikely you'd get sick and stuck in a hospital. So that's why the United Kingdom was supposed to be celebrating yesterday what they called Freedom Day, the end of pandemic-related restrictions. It was going to be a blast.

The disco tax were open, Jack. Instead, the prime minister, Boris Johnson, found himself in isolation because he was exposed to someone with the Delta Barrier. Meanwhile, across the pond and then over a coast of two, over to the, the Pacific, Los Angeles just brought back indoor mask mandates. And other counties in California and across the country are doing the same thing. So over one single weekend, a whole bunch of cold water got poured on that great feeling that the pandemic was behind us. Now we're just feeling cold. Yeah. So Jack, what's the takeaway for our buddies over in the entire U.S. stock market?

Stock markets aren't just about profits and losses. They're also about human psychology. Snackers, recently, the narrative has been reopened. Pent up demand. The hot, grill summer. We're looking at you, Weber. But a second onset of the pandemic and inflation scares is changing that narrative. So now the narrative has become, remember March 2020 when the S&P 500 fell 34%? Now, it's probably not going to be that bad, but some investors are selling their stock now in case we get a mini version of that brutal stock market drop. And that's because of a new narrative that we just got in the last weekend. The new narrative, cars are expensive. Delta Varian is ripping and through the unvaccinated. Stock markets, they're all about human psychology.

For our second story, Klarna just acquired a very unique shopping startup called Hero. Jack and I were curious. It's conversational commerce and it's a new thing to beat Amazon online. First of all, Klarna, Europe's most valuable fintech company, another suite. It's worth $46 billion and they specialize in buy now, a day later. Now, we covered their last fundraise on June 11th and I believe we called it like the millennial credit card, Jack. This is how we played it. That's right, Nick. We did. Because when you're sitting on your phone about to buy a $100 blender, we've been there. You want to make delicious breakfast. You can either pay $100 right now. What's a CVV code? Anyone know what a CVV code is? Or you can pay four installments, one quarter at a time through Klarna. Same idea. It's all based

on credit, but this is the millennial credit card. Well, Klarna wants more companies and more online stores to offer Klarna. they just made an interesting acquisition of a company called Hero for $160 million. This goes to online shopping's number one problem. Okay, Jack, you wait to set this up for a second because this is a wild stat. People are going to sit down, stand up and sit back down again. According to Accelerated Newslet, this is wild. Only 2% of visitors to online shopping websites actually buy something after that visit.

Jack, you got 43 tabs open before you make the purchase. Only 2% of you end up making the purchase. And that's a lot different. than your in-store shopping experience. Oh, totally different. Jackie, show up at Paxson. You're just trying to get some new loose jeans because apparently that's the trend

and Slim Fit is out. Well, an associate is going to meet you at the door and help you out immediately. Ask you what you want. They might even grab you new sizes while you're in the fitting room. You're leaving. You're like best friends with the person.

They've guided you through your life story. I mean, you end up buying the product because you get to know the salesperson. Online. However, it's a disorganized mess of tabs and filters and permissions to track you with cook. You got the hamburger button you're going to click on. Jack, suddenly like your mom calls you distract.

The chicken cul-let's burning. I got to go take care of the chicken cul-let. What tab was I looking at for peck son? I don't even know. Oh, and now the computer froze. The chicken cul-like, it's still burning. It actually wasn't a tab. It was a window that opened up within my Instagram app.

So, as you can see, in-store shopping, higher conversion than online shopping. The solution is conversational commerce. Conversational commerce, a new concept that turns in-store salespeople into online influencers. Conversational commerce from Hero, which Klarna just acquired, creates a one-click button on someone's website to very easily let you video chat one-on-one with a personal guide to help you shop. So you have a human being interacting with you to guide you through maybe buying the jeans that are on sale, but you're worried they're too long. Well, if you're worried they're too long, call down. called Darrell through Hero, which is plugged into the website,

he will show you via a FaceTime conversation what the jeans look like when you peel the cuff up an inch to make them your proper length. Darrell's like, he will put on the jeans to show you what they look like. He will get in there. Thanks to that incredible service from Darrell, this hero statistic is insane. Yeah, this hero statistic from here is believable.

Yeah, Hero claims that customers who use Hero are 21 times more likely to buy. something than someone who's just online shopping without hero. So when Hero is plugged into your website, that 2% conversion percentage that we told you about earlier, it boosts to 42% after a Hero conversation. That is wild and that's why Allbirds and Levi's and Nike, they're all using Hero to convert shoppers. And now Clarna is going to quote Enrique Iglesias, I can be your hero baby.

So Jack, what's Enrique's takeaway for our buddies over at Hero? Conversational Commerce is how you do e-commerce better than Amazon. Yeah, Snackers, Nike's physical stores, for example, they let the person in the store tell you a story, give you advice, give you inspiration, try on something, and then sell you that thing. But that human physical advantage is erased once it becomes Nike.com. And that is hero's true value.

It gives the physical store back that physical advantage, even if they're selling online. So Klarna's core function of Buy Now Pay Later boost the percentage of online shoppers who are going to hit buy to purchase that product. This new hero functionality that Klarna just bought, it does the same thing. Yeah, conversational commerce. It's how you do e-commerce better than Amazon for now. For now. For our third and final story, you kind of got to love this one, Jack. Tractor supply just had a record setting spring.

This Tennessee-based company knows that farming is a niche market and that is exactly the point. Founded, by the way, between the Great Depression and World War II, interesting time to start a company. 1938, during the Dust Bowl, they called themselves the largest rural lifestyle retailer in the United States. And basically, we're looking at tractor supplies customers here. The big customers are your farmers and your ranchers. That's who they're going after. They're like Home Depot, but for sowing fields, not mowing lawns. Right, like instead of like a family dog, you'd own, I don't know, a herd of cows.

And spring is the key season for transportation. tractor supply company. Yeah, Jack, I'm no dairy queen over here, but I'm pretty sure that's when you do your planting. There's no planting in dairy, but yeah, that's when you plant seeds. I repeat, I'm no dairy queen. And tractor supply company just announced they had more customers last quarter who spent more per customer and who made more trips than last year. I mean, Jack, unwrap these numbers here. 370 million in profits, up 9% from last year, which was up 54%.

percent from the year before last year. Life out here? Yeah. Feels real nice right now. Also, they cut expenses like a weed. The stock's up 30 percent year to date, which is double the rest of the market. They're laughing at Wall Street right now from a farm in Tennessee. This was an enjoyable earning support for Jack and I to jump into snack style. But here's what we find fascinating about tractor supply. Tractor supplies profit puppy is other animals. I went in to the Montpelier, Vermont tractors supply to get River a dog bed after we had adopted her. I'm trying to make a rugged. I thought it was going to be a five-minute trip.

We ended up petting baby chicklets for like 25 minutes. You want to bring the whole family there? This isn't even for farmers. It was like a petting zoo. But then someone eats these animals. No, I think you buy them to lay eggs. For other animals you'll eat. I don't think there's any eating of these chicklets.

So it's a restaurant. Snackers. Tracted supply company. They're not going to sell living, breathing horses, cows or goats, but they have all the equipment imaginable that you could need to handle them if you own livestock. I mean, dive into the revenue numbers, half of their sales are livestock and pet products over a tractor supply. They're selling you the livestock feed for Bessie, the Black Angus. Now, Jack, you love having a dog, but let's say you want to really dig in Vermont style and start

a chicken coop. Snackers, tractor supply company sells a starter kit of 10 Brahma chickens for 30 bucks so you can start growing your own eggs. Jack, they got 40 breeds of chickens. I'm on the website right now. You ever heard of Barnavilders, Black Morans, Blue Laced Red Chickens? I never heard of these. I've heard of Gamecocks and Fighting Bantoms. Well, get this Snackers. Poultry happens to have the highest retention rate of any product for new customers at tractor supply. When they say poultry, they mean chickens. Live chickens that they sell because if you build your own chicken coop, yeah, why not? First, you buy the flock and the feed. Right. But then you're going to have to snake-proof this thing because you don't want the snakes getting in there and that's expensive. And tractor

Supply helps you. And then every morning when you go to grab the fresh eggs, you don't want to be swatting flies. You need to fly control your situation. You do. You need a fly control strategy. And that's why you're going to tractors. Snackers, these are all ancillary sales that come after they sell the chicklets. Which is the retention profit puppy tool. So, Jack, what's the takeaway for our buddies over tractor supply? Neesh by definition means small, but niche can mean big profits. Unlike Home Depot, unlike Lowe's, tractor supply isn't targeting the needs of everyone with a house. Instead, they focus on the needs of everyone whose house is a farm. Yeah, as they put it in their annual report, we have found a quote unquote specialized market niche.

As they also say in their annual report, they target home, land, pet, and livestock owners with above average income, but below average cost of living. And knowing the needs of that specific niche, that has one ridiculous customer love. Tractor supply company's loyalty program, which is called the neighbors program, because everyone's a neighbor in my neighborhood. I love that. Just hit 21 million strong members and they make up two thirds of the company's total sense. They're now adding loyalty members at a faster pace than any other home goods store. They'd rather dominate most of a small market than just a fraction of a larger one. Neesh can mean big.

Jack, can you whip up the takeaways for us over there? Indy case. Stocks have dipped about two and a half percent since Friday. The narrative changed in markets. They're psychological. Klarna just acquired a company that boosts sales conversions by 21X. Hero, great name, conversation commerce beats Amazon for now. For a 300 final story, tractor supply company is enjoying record profits and record cute chicklets.

Because they went niche and niche can also mean big. Now, time for our snack fact of the day, which is actually correction from a legendary snacker. He's been with this for a while. Daniel, Colorado native, great guy, T-Boy. Tonight, the Baltimore Orioles play the Tampa Bay Rays down in Tampa. Now, the announcer lineup may be more interesting than the player lineup here. Melanie Newman, Alana Rizzo, Heidi Watney, and Laura Gardner. Yeah, yesterday we said it was the first all-female umpire team.

That was incorrect, but it's still a huge deal. We meant to say first all-female announcing team, Daniel, thanks for keeping us honest. Thank you for snacking. Snackers, honestly, you look fantastic today, Jack. The yellow looks great on you. Is that a tractor supplies, the piece of supplies? It's the color of the chicklets. There we go.

And just like every pod, it all comes full circle. What a peculiarity. If you know, you know. And before we go, happy birthday to Max Joe in Redondo Beach. And Luis Rodriguez in Puerto Rico. And Peter in Silver Springs, Maryland. And Eric Stevens in Dallas, Texas. Oh, and Jack, Leslie Zezula, just got a new job over at Deloitte.

Great consulting and accounting firm. A lot of spreadsheets. Georgios, congrats on the new job at TikTok over in Singapore. Actually, it's a lot of decks, a lot of presentations. Congrats to Margot Sholei

for graduating for business school in Paris, France. And Jordan and Ashland-Degra two-year anniversary in lovely Salt Lake City, Utah. Happy anniversary to Michael Brookman and Laura Fieldsden

in Gutenberg, Germany. And Sam and Ashley, after having three girls are about to have their first boy over in Pennsylvania. Congrats on getting engaged to John and Steck.

John got down on one knee on the shores of Ston Connecticut. Lovely, John. Let's see the ring. Anybody else celebrating something today, however small, make it a te boy. Celebrate the wins. This is Jack. I own stock 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 Robinhood 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. My goal is to say peculiarity on the pod today. I know you're going to fight it, I think.