For Immediate Release:

Friday, August 23, 2019

Featuring Macy’s, Banana Republic, GameStop and HubSpot

Summer might be winding down, but the subscription economy keeps getting hotter. This week, we bring you features about streaming, gaming and data gathering: the new Disney+ bundle launching this fall, the latest department stores to jump into the subscription rental business, layoffs at GameStop and “Game Informer,” Facebook’s plans to change their data gathering and sharing ways, and 2019 customer service statistics.

Bob Iger Announces Disney+ Bundle, Setting Its Service Apart Already 

With the Disney+ launch looming in just three short months, Disney has already announced some big things for their streaming service. With a hefty portfolio of titles in hand, Disney’s CEO Bob Iger has announced there will be a bundle with the new streaming service, and it will give its competitors a run for their money.

The company intends to have all three of its streaming services – Disney+, ESPN+, and Hulu – included in one bundle subscription plan. This bundle will have the ad-supported version of Hulu, and will cost $12.99 a month, IGN reports. People have speculated that Disney and ESPN’s services will also have ads, but they will not, as far as we know. Disney+ will remain ad-free even if purchased without the bundle.

When this price was announced, eyebrows were raised. $12.99 is the same cost as Netflix’s most popular plan. Iger has said this is purely coincidental, but some find it hard to believe. The reason? Hulu has been seen as one of Netflix’s biggest rivals, despite having half the subscribers Netflix does.

However, they are growing at a rapid rate. They topped 25 million total subscribers in 2018, according to their end of year press release. They had a 48% subscriber increase year after year, and that will continue to grow under Disney’s rule.

CBS News reports that Iger’s intent with the bundle is to have a family-geared bundle. He wanted to have general entertainment and family entertainment, which he believes will be achieved with the bundle. Comicbook reports that Iger has also gone on to say that he wants the service to stay as affordable as possible, while still being able to grow as much as possible.

This bundle leads to savings of $5 a month if you subscribe to all three, and you will be able to access three streaming services versus Netflix’s one platform, that has already lost titles to Disney. It sounds like a pretty good deal to us.

Department Store Retailers Jump on the Subscription Service Bandwagon 

Department store retailers continue to jump into the subscription economy. The latest to do so are Macy’s, Banana Republic and Bloomingdale’s. If you were wondering, yes, Banana Republic is still in business. Similar to Rent the Runway, all three of these retailers are going the subscription rental route where customers pay a flat fee per month. For that fee, subscribers can “rent” clothing and send it back to the retailer when they’re done.

Macy’s has also said that it is considering launching a similar service. Bloomingdale’s, which is a subsidiary of Macy’s, is planning to launch a service around mid-September. Another popular retailer to launch a service is Urban Outfitters.

Bloomingdale’s plans to have My List, which will have more than 60 brands and over 100 exclusive pieces, reports PureWow. The service will be $149 a month. Subscribers can select a list of at least ten pieces they want to rent from the site, and a box with four pieces will be sent to the subscriber. These pieces can be swapped out as frequently as the subscriber wishes.

Banana Republic is planning to launch their apparel rental subscription service at the end of September, with the goal of adding men’s apparel later, says Ris News. Their service will be $85 per month for three garments. What do you think? Would you rent your clothing online?

GameStop Lays Off 100+ Employees as Company Continues Its GameStop Reboot

This week, GameStop laid off 100 employees at its Grapevine, Texas HQ and other offices around the country, reports Kotaku. The layoffs include half of the editorial staff at their subsidiary Game Informer magazine and are part of an overall cost-cutting plan to improve profitability and sustainability.

 “While these changes are difficult, they were necessary to reduce costs and better align the organization with our efforts to optimize the business to meet our future objectives and success factors. We recognize that this is a difficult day for our company and particularly for those associates impacted. We appreciate their dedication and service to GameStop and are committed to supporting them during this time of transition,” a spokesperson told Kotaku.

This is consistent with the company’s message during their first quarter earnings call on June 4, where they announced that total company sales were down 13.3%. Hardware sales were down 35%, software sales were down 4.3% and pre-owned product sales were down 20.3%.

“As I've been digging into our business, it’s clear to me that we need to transform to remain a viable player in our industry, which is currently undergoing meaningful technological change. And while the industry grows and attracts new customers, our recent performance shows me that we have work to do to evolve and transform. We owe it to our team to develop a better strategy and a better product for our customer,” said George Sherman, CEO, who was appointed CEO in March of this year.

After announcing changes to GameStop’s leadership team, Sherman laid out his strategy to help transform the company.

“This will be a multi-work stream effort addressing cost and efficiency, business optimization, and new revenue streams. To aid us in our thinking and speed of execution, we've engaged a tier-one consulting group that is now fully deployed within GameStop,” Sherman said. “Throughout our transformation process, we'll be deliberate and act with urgency. We’ll seek efficiencies in our operations to improve our performance in the near term, while we identify, test, and implement these initiatives that will help shape our strategy for the future.”

Sherman said it was important for the company to focus on the digital economy and how they can continue to play an important role in the gaming space. It is likely that the trend toward gaming subscriptions is impacting GameStop’s business. While people lean into gaming subscriptions versus buying games outright, GameStop has to figure out where they fit into that landscape.

Facebook Is Changing Its Data Gathering and Sharing Ways 

Facebook said on Tuesday that it is adding a section to the social media platform where users can see what data Facebook is tracking. This is a feature CEO Mark Zuckerberg announced was in the works a year ago. Users will have the option to turn off the traffic, says ABC News. Users can delete their past browsing history from Facebook and block it from tracking future clicks, taps and visits to other websites.

Facebook is testing the new feature in South Korea, Ireland and Spain first, before bringing it to larger markets. The company didn’t say when U.S. consumers could expect to see this feature.

Media outlets speculate that this may mean less tracking of non-Facebook activity and less ad targeting outside of Facebook. Even with the new tool engaged and tracking turned off, Facebook will still collect some of your data but it will not link them to your Facebook profile anymore, according to ABC News.

The goals of the tool are transparency and control (for the user), but it seems unlikely that this one change will repair the damage caused by data breaches and other privacy concerns.

Hubspot: 5 Customer Service Stats 

We’d all agree that acquisition and retention are activities critical to the success of any subscription company. It is far more costly to acquire a new customer than it is to retain the ones you have. Part of the retention process is providing top notch customer service. If you’ve ever doubted the role that customer service plays in retention, check out these five customer statistics from HubSpot.

1. Investing in new customers is between five and 25 times more costly than retaining the customers you already have (source: Harvard Business Review).
2. 93% of customers are likely to make repeat purchases with companies who offer excellent customer service (source: HubSpot).
3. $1.6 trillion is lost by American companies due to customers who have experienced poor customer service and switched to competitors (source: Accenture).
4. Happy American customers will share their experiences with about 11 people (source: American Express).
5. 64% of customers believe customer experience is more important than price when deciding to make a purchase (source: Gartner).

Get more statistics like these in “31 Customer Service Stats to Know in 2019” by Swetha Amaresan for HubSpot.

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