Questions from a shareholder

By: Robert Grosshandler | December 19, 2021

I’m sharing another letter (from Matt C. – thanks Matt!) and my answers.

Hi Rob,

Disappointed to hear about Amazon dropping iConsumer as an affiliate.

Me too. I had always worried that it was a matter of time. Later would have been better, though. They apparently don’t see benefit in the loyalty / reward model. We weren’t singled out, they’d done this to others in the space much earlier.

How does this decision materially impact iConsumer and forward looking plan?  I realize that Amazon was a significant (and valuable) revenue source.

We had been growing the Amazon revenue stream to where it was becoming material. Amazon came with challenges. It really didn’t fit the model perfectly, since we couldn’t directly reward members for using Amazon. So we had to create different messaging (*get rewarded for shopping everywhere except Amazon), and repeat that messaging more frequently than was comfortable. (I personally dislike marketing messages that have an asterisk and I won’t miss that.)

But I really liked the revenue. And obviously, with a 40% share of U.S. ecommerce revenue (so we’re told), shoppers like Amazon. Now that Amazon doesn’t provide any benefit, it will reduce the probability that our shoppers keep iConsumer top of mind.

Going forward nothing really changes, other than you’ll see more messaging for other brands, especially Walmart.

Is there a future opportunity to bring Amazon back onboard?

Never say never, but it’s not something we’re spending any energy on.

What can WE (collectively as an investor community) do to mitigate this lost revenue source?  Is the hope that we transition to Walmart —- as you outlined in the newsletter post?  

Transition is too big a word. Walmart is an ok alternative to Amazon. Getting better, fortunately. We (you) can help that by using them, doing the work necessary to see if they’re competitive to the very easy choice of Amazon. And when they are, let everybody know.

I’ve begun to do that, and it is turning out to be a little simpler than I thought.

We need to make sure our tools help with making Walmart as easy as possible (our app and browser extension tools, especially).

What other avenues is iConsumer considering?

We gain and lose stores all the time. They’re not usually Amazon-sized (fortunately), but it doesn’t change our basic efforts.

Lastly, I have observed an increase in subscriber velocity— a faster rate of new member acquisition over the past few months as compared to prior months.  Is this a result of “influencers”?  How much of a positive influence has this had on top line revenue?

We’ve been spending money on member acquisition, in addition to the influencer efforts (which were more revenue related than subscriber growth focused). Plus, consumer behavior at this stage of the pandemic is changing, and lastly, Xmas is coming.

Appreciate the insight, as always!