🥑 Amazon's GaaS play
Hey Snackers,
"A one-of-a-kind architectural masterpiece that draws visitors from near and far" — TripAdvisor had to suspend reviews for a circular hole in a wall next to a Derbyshire ATM, after it became a target of British humour.
Coronavirus fears wiped out $1.7T of US stock market value in 2 days as stocks keep sliding Tuesday. The 10-Yr Treasury yield is at a record low rate, which means investors are piling into relatively safer gov bonds during this time of uncertainty.
Amazon opens a cashier-less supermarket — but it's more interested in the tech than the groceries
Literally "grab-and-go"... Amazon opened a checkout-free grocery in Seattle Tuesday, its biggest "Go" store yet. As you cruise the aisles and squeeze-test avocados, shelf-sensors and cameras stalk your every move (no more "sampling" the nuts section). You grab your favorite rosé, walk out, and see the $10 charge on your Amazon app:
- Go Big: Amazon has opened 25 Go stores over the past 2 years — but this supermarket is 5x bigger than its largest Go store.
- Or Go Home: Go's VP said this improved tech can be deployed on an even larger scale — "There's no real upper bound."
- But: Sales at the first batch of Go stores actually declined in 2019 from the year before.
Go's true ambitions lie beyond grocery... Amazon is using this huge Go store as a showcase for its customer-stalking, product-tracking tech, which it will likely start selling to other businesses. It's reportedly talked already with potential partners like airport convenience stores (snatch that Kind Bar while sprinting to Gate E14) and sports arenas (grab the Cracker Jack without missing an at bat).
Amazon's real money lies in its tech and services infrastructure... Besides acquisitions like Ring and products like Alexa or Amazon Basics, Amazon doesn't really sell its own physical goods. The company is most known for its ecommerce platform, where other companies sell their stuff. It actually made 63% of its profit from its Amazon Web Services cloud — that's twice as much as its core ecommerce biz. Now it's positioning Go as a 2nd potential software profit puppy.
Disney's visionary CEO Bob Iger steps down after 14 magical years
Employee of the decade... Disney legend Bob Iger surprised the world Tuesday by stepping down as CEO (he was expected to retire at the end of 2021). Over 14 years, Iger grew Disney into Hollywood's largest, most powerful media conglomerate. He'll continue through 2021 as Creative Chief and Chairman, but Let's take a magical journey back in time:
- 2005: Bob becomes CEO. Disney owns 21 TV channels — and 55% of its profits come from cable TV (mostly ESPN).
- 2006-2007: In 2006, Disney buys Pixar. A year later, Netflix launches streaming, threatening Disney's cable biz.
- 2009-2019: Disney acquires Marvel in 2009, scoops up Star Wars (aka LucasFilm) in 2012, and snags 21st Century Fox in 2019 for $71B (Bobby's biggest deal) to beef up his content arsenal.
- Today: Disney is thriving thanks to Iger's media acquisitions (it posted a record $69.5B revenue last year) and the stock is 5X more valuable than when Big Bob took charge in '05.
Disney makes bank... off its media/movie franchises, its character-driven theme parks, and its franchised merch (Baby Yoda FTW) — it's all part of its product ecosystem. As CEO, Iger had become one of the most powerful people in:
- Hollywood: Between Marvel, Fox, and Star Wars, Disney is the king of blockbusters.
- Streaming: Disney+ already has over 28M subscribers since its November launch.
- Sports: Disney owns ESPN and ABC — leaders in sports programming.
- Toys: Baby Yoda. 'Nuff said.
TBD on the new guy... He's another guy named Bob: Disney's head of parks/resorts, Bob Chapek. He's been at Disney for 27 years, and was at Heinz Ketchup before. But Disney's future is cutting-edge media, so the theme parks + condiment resumé is a tad surprising. But Chapek has headed key Disney units, and beat out potential successors (including Disney's streaming exec). He's got big Mickey shoes to fill.
Shake Shack sales fall because it's struggling through a "teen slump"
That feeling when you're stuck in a Shack line... We got it from Shake Shack's earnings — a 3.6% fall in same-store sales (adorably called "Same-Shack Sales") and foot traffic slipped, too. Some of the pickles that soured Shack's burger and dropped the stock 14%:
- "Significant slowdown" in the growth of its delivery biz — Shack decided to go exclusive with GrubHub, uprooting itself from DoorDash, Postmates, etc. The "moving out" process cost it deliveries.
- "Less menu innovation": Fad foods drive sales. Think Chipotle's carne asada, McDonald's Beyond Meat PLT, and Popeye's Chicken Sandwich (which literally caused a chicken shortage/fights). The Shack has lacked in the "dope foods" category.
Shake Shack is like a fast-growing teen (in a slump)... Most of the 15-year-old chain's 275 Shacks are just in the adolescent phase — 60% are less than 3 years old (teens, in millennial biz years). And Shack's been aggressively expanding into malls, airports, and "free standing pads." But the core problem is lack of innovation...
Shake Shack needs to shake up its menu... Last year's Chick'n Bites weren't a game changer. Even Shake Shack's CEO said "We chose to limit our menu innovation in comparison to prior years." But buzzy new food items are key to driving store traffic. So are buzzy new features, like McDonald's $1B worth of ordering kiosks, Domino's constantly-improving delivery app, and Sweetgreen's office food lockers.
What else we’re Snackin’
- Flixing: Netflix debuts a top 10 list for the most popular movies/series — now you know you're not the only one obsessed with the Babies docuseries (#7).
- Random: Scooter icon Bird gets into payments (desperately chasing profitability) — "Bird Pay" lets you buy coffee by scanning a QR code in the Bird app
- Defense: HP will buy back $15B of its stock to fend off a hostile takeover by Xerox
- Sold: Telenovela legend Univision sells a majority stake to 2 Private Equity firms — the American Spanish-language network is valued at less than $10B
- Streamed: Recorded music revenue grew to its highest point in over 10 years thanks to streaming, which made up 80% of overall sales.
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Wednesday
- Earnings expected from Square, Etsy, and Papa John's
Disclosure: Authors of this Snacks own stock of Amazon and Beyond Meat.
ID: 1101208