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How Subscription Companies May Navigate Economic Uncertainty
Economic strains on consumers are putting pressure on nonessential expenditures. Is the news all bad? What may help subscription-based consumer companies navigate this challenging environment? Payments and commerce consulting group PYMNTS published their September 2022 Subscription Conversion Index commentary summarizing the current state of the consumer economy and strategies subscription companies may employ to navigate this environment.[1] Consumers Are Anxious About Economic ConditionsConsumers are anxious about current economic conditions, especially inflation. 85% of consumers are concerned about inflation, with 58% believing that the cost of living will be higher next year. Consumers, on average, are paying between $101 and $500 more per month on groceries and $101 to $250 more per month on gasoline. Cutting Nonessential SpendingAs a result of economic concerns, consumers are changing their spending habits. 11% of consumers have eliminated all nonessential purchases. 76% of consumers have changed the way they buy groceries, with 43% only buying the essentials. Subscriptions Are Not Immune from Inflation’s EffectsConsumers are paying more for their subscriptions and indicate that price is a major driver in the decision to either initiate or terminate a subscription. How Subscription Companies May Navigate Economic UncertaintyIn conversations with subscription companies, the report indicated that flexibility is key to navigating economic uncertainty. Specifically, subscription companies must be flexible with their payment and cancellation policies. Flexibility with Cancellation PoliciesSubscription companies need to be flexible with their cancellation policies, recognizing that a consumer’s financial situation can change suddenly. First and foremost, subscription companies need to be completely open about cancellation and payment options. Then, they need to be flexible with cancellation policies, allowing consumers to pause or cancel subscriptions as their financial situation changes. Flexibility with Payment PoliciesSubscription companies need to offer more flexibility with payment options.[2] This includes allowing customers to pay using their preferred payment method, e.g., digital wallets, credit, or debit cards. It also means allowing them some flexibility to set up a payment schedule, even the flexibility to decide what day of the month to make their payments. Still More Companies Entering the Subscription EconomyDespite challenges, more companies are recognizing the potential benefits of subscription-based models and are offering new products. The NFL unveiled a $5 per month product that gives subscribers live game access on their mobile devices and additional on-demand content. This is in addition to their NFL+ and NFL+ Premium packages. Tripadvisor, USA Today, and The Weather Channel are bundling their offerings into a subscription-based product. Car manufacturers are increasing their subscription-based options with BMW offering an $18 per month heated seats subscription, Toyota offering a remote start service, and GM aiming for $25 billion in revenue annually from subscription-based software and services by 2030. The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before feesand expenses, generally correspond to the total return performance of the Fount SubscriptionEconomy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue. SUBS may present an attractive vehicle for individuals to gain exposure to companies offering subscription-based pricing models. For a full list of holdings, please click here. [1] Unless otherwise noted, all data sourced from: Economic Strains Put Nonessential Subscriptions Under Fire: Subscription Commerce Tracker Series, PYMNTS, September 2022[2] Please see our blog Are Payments the Key to Subscription Success?
1 min read · 123 views
Bong-Geun Choi
Oct 31, 2022
The Top 3 Investors in Blockchain Technology
The blockchain industry is forecasted to reach a valuation of $67.4 billion by 2026.[1] There are many companies making serious investments in the space, and we’ve compiled a list of the largest movers of capital. This article will introduce you to three global blockchain technology investors who have invested over $3.7 billion. Our marketing agency, Business in Games, works with blockchain companies worldwide that offer products and services from video games to sports and NFTs (non-fungible tokens). Anecdotally, we saw unprecedented growth in marketing spending and contractual interest over the recent ‘crypto boom’. Although there has been a market slowdown and some budgets have been reduced, we are still seeing interest towards new projects from the investment community. #1 Alphabet Inc.Major Investments: 4Funding Amount: $1.5 billion Who is Alphabet Inc?Alphabet Inc. is an American conglomerate holding company established by Google. Their revenue was $257.6 billion in the last financial year (2021/2022). Alphabet Inc. acts as a parent company with 12 subsidiaries, including DeepMind (artificial intelligence), Google Fibre (internet access), Isomorphic Labs (drug discovery), Intrinsic (robotics software), Waymo (autonomous driving), and Calico (anti-aging research). Alphabet Inc’s Blockchain Investments: 1. Fireblocks (Valued at $8 billion) [2]Fireblocks is a blockchain security service provider that provides an easy-to-use digital asset security platform to help financial institutions protect their digital assets from theft or hackers using MPC (multi-party computation), and patent-pending chip isolation technology. 2. Dapper Labs (Valued at $7.5 billion) [3]Dapper Labs is an NFT marketplace developer, best known for creating the NBA Top Shot Marketplace, NFT All Day, UDC Strike, and CryptoKitties.3. Voltage (Company value is not public)Voltage is a crypto infrastructure technology company exclusively focused on Bitcoin. They provide infrastructure solutions to their clients including nodes (enterprise-grade hosting), BTCPay servers (quick and easy Bitcoin and Lightning payment solutions), flows (ability to access liquidity using a dashboard and API or application programming interface), and surge (analysis and forecasting software).4. Digital Currency Group (Valued at $10 billion) [4]Digital Currency Group is the parent company for several big companies in the crypto industry. Their subsidiaries include Grayscale Investments (world’s biggest digital asset manager) and Grayscale Bitcoin Trust (the largest fund for Bitcoin in the world). #2 BlackRockMajor Investments: 3Funding Amount: $1.17 billion Who is BlackRock?BlackRock Inc. is an American multi-national investment firm providing investment, advisory, and risk management solutions with $19.17 billion in revenue in the last financial year (2021/2022). BlackRock’s Blockchain Investments: 1. Circle (Valued at $9 billion) [5]Circle is a peer-to-peer payment technology company and the issuer of the USDC stablecoin, with $55 billion in circulation. Partners of Circle include VISA, Mastercard, MoneyGram, and BNY Mellon.2. FTX (Valued at $32 billion) [6]FTX is a cryptocurrency exchange based in the Bahamas. In 2021, FTX reported $1.02 billion in revenue. Their platform offers derivatives, options, volatility products, and tokens. In 2022, the FTX exchange had over one million users. 3. Anchorage Digital (Valued at $3 billion) [7]Anchorage Digital is a cryptocurrency platform and infrastructure service that provides investment and infrastructure support for cryptocurrency and cryptocurrency products. In 2021, the company was valued at just above $3 billion after a $350 million funding round. Investors include Andreessen Horowitz, Singapore Sovereign Wealth Fund GIC, Goldman Sachs, KKR, and VISA. #3 Morgan StanleyMajor Investments: 2Funding Amount: $1.11 billion Who is Morgan Stanley?Morgan Stanley is a global financial services company that provides investment, banking, securities, wealth management, and investment management services. They have a global footprint of 78,000 employees and in the last financial year generated $59.58 billion. Morgan Stanley’s Blockchain Investments: 1. Figment (Valued at $1.4 billion)Figment is a blockchain infrastructure provider and crypto staking platform. Figment is known for developing back-end systems and infrastructure that provides yield on tokens for the PoS (proof-of-stake) blockchains. 2. New York Digital Investment Group LLC (Valued at $7 billion)NYDIG is an investment management firm. The company offers asset management, custody, and execution solutions and services for digital assets. The estimated annual revenue is currently $49.9 million. NYDIG also serves as the official Bitcoin Payroll Platform for the New York Yankees. If you’re looking for more information on the major movers in the market, here’s an infographic developed by Business in Games. Source: Business in Games If you would like to follow the market movements in blockchain, video games, and esports, sign up for our weekly BIG Report newsletter or follow our daily content on LinkedIn. In summary, now you’re aware of the largest capital investments in the industry from companies you may have never suspected. While we can’t provide you with solid data on where the industry is moving, we can give you our personal insights and experiences with active marketing contacts in the space. The crypto investment market may have slowed, but every capital and marketing-heavy market has also slowed with it. We will watch this space closely for future developments. For a full list of MTVR holdings, please click here. 1) “Blockchain Market by Component (Platforms and Services), Provider (Application, Middleware, and Infrastructure), Type (Private, Public, and Hybrid), Organization Size, Application Area, and Region (2022-2026),” Markets and Markets, Nov. 20212) Ossinger, Joanna. “Crypto Startup Backed by Google Fund Hits $8 Billion Valuation,” Bloomberg, Jan. 27, 20223) “The 2022 CNBC Disruptor 50 list: Meet the next generation of Silicon Valley,” CNBC, May 17, 20224) Rooney, Kate. “Grayscale-parent Digital Currency Group tops $10 billion valuation with SoftBank, Alphabet investments,” CNBC, Nov. 1, 20215) Nishant, Niket. “Cryptocurrency firm Circle doubles valuation to $9 bln in tweaked SPAC deal,” Reuters, Feb. 18, 20226) Rooney, Kate. “FTX in talks to raise up to $1 billion at valuation of about $32 billion, in-line with prior round,” CNBC, Sep. 21, 20227) Dillet, Romain. “FTX in talks to raise up to $1 billion at valuation of about $32 billion, in-line with prior round,” TechCrunch, Dec. 15, 2021
3 min read · 146 views
Chris Smith
Oct 28, 2022
Consumer Brands Push onto the Metaverse
Consumer brands are increasingly dipping their toes in the metaverse pool. Most recently, Walmart introduced two new metaverse strategies. While still experimental, these forays may provide a new medium for brands to interact with their customers and gain the attention of new and likely younger customers. How are some consumer brands embracing metaverse technologies? Walmart Introduces Two Metaverse StrategiesWalmart is launching two metaverse strategies on the mega-platform Roblox – Walmart Land and Walmart’s Universe of Play.[1] Walmart Land will include a virtual store of merchandise for your avatar. It will also include a Ferris wheel to give users a bird’s-eye view of the digital world and offer unlockable tokens and badges that can be earned in various games and competitions. Walmart Land will debut with three major experiences:Electric Island – A music-inspired section with an interactive piano walkway, a dance challenge, and a DJ boothHouse of Style – Offering fashion and cosmetic products, a virtual dressing room, style-posing competitions, a cosmetics obstacle course, and a roller-skating rinkElectric Fest – Concerts and other performance-based events Walmart’s Universe of Play will feature the year’s best toys. This world will include:Immersive games – Users can participate in five new immersive gamesRewards – Users can collect virtual toys to earn coins to redeem virtual merchandise (verch)Virtual adventures – This area will feature e-mobility items like a hoverboard Walmart has indicated that it will use Roblox as a testing ground as it considers moves in the metaverse and beyond. Roblox’s user base has jumped from 32.6 million active users in 2020 to over 52 million in 2022.[2] Joining Other Consumer Brand Metaverse ForaysWalmart is joining a growing list of consumer-oriented brands that have launched metaverse strategies. These include:Chipotle built a virtual restaurant on Roblox and launched an online game. Chipotle’s loyalty program members can also trade in their reward points for Roblox gift cards.[2]Several other fast-food brands have opened virtual restaurants, including Wendy’s, McDonald’s, and Chick-fil-A.[2]Wendy’s advertised as part of a new Fortnite event called Food Fight.[3]Coca-Cola auctioned non-fungible tokens (NFTs) in an online auction via the OpenSea marketplace.[3]Gucci sold several rare Gucci items on Roblox and created a virtual garden exhibit on the platform, part of a two-week immersive multimedia experience in Florence, Italy to celebrate the brand’s 100th birthday.[3]Louis Vuitton created a game in the metaverse.[3]Burberry brought its fashion items to the online game Honor of Kings.[3]Nike created immersive digital experiences on the metaverse that connect with their physical offerings, even hiring a Director of Metaverse Engineering.[3] Highlighting the Metaverse’s PotentialThe metaverse has the potential to bridge the gap between the digital and physical world and change the way that companies interact with each other and their customers. The willingness of companies to create metaverse strategies may attest to their optimism concerning the platform’s future, highlighting a potential investment opportunity for metaverse-related companies. How may individuals gain exposure to metaverse-related companies? The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. MTVR may be an attractive vehicle to gain exposure to metaverse-related companies. For a full list of MTVR holdings, click here. [1] Walmart Jumps into Roblox with Launch of Walmart Land and Walmart’s Universe of Play, Walmart News, Walmart Website, 9/26/22[2] Walmart Journeys into the Metaverse, NACS, 9/27/22[3] van Rijmenam, Mark, Seven Consumer Brands Reinventing Marketing in the Metaverse, Speaker Strategist, 11/3/21
1 min read · 139 views
Bong-Geun Choi
Oct 25, 2022
Popular
A Virtual Real Estate Boom
Real estate sales are booming in the metaverse as investors are spending millions of dollars to acquire virtual tracks of land, according to a Yahoo Finance article [1] . What is behind this boom? How may investors gain exposure to the metaverse? Sales Are BoomingRecently, sales of digital land have totaled in the millions. According to Yahoo Finance, one week of sales in late November 2021 totaled $100 million. What are some factors driving this boom? Location, Location, LocationImitating the physical world, location is crucial in metaverse real estate. The metaverse is made up of multiple virtual worlds. Demand and prices are highest in the most desirable virtual worlds. Sandbox and Decentraland, two popular virtual worlds, saw sales totaling $86 million and $15 million, respectively, during that one week in November. As most virtual real estate transactions are conducted in cryptocurrency, one plot on Fashion Street in Decentraland sold for the equivalent of $2.48 million. In addition, one plot of land in Sandbox sold for a record $4.3 million. [2] ScarcityCreators of virtual worlds only create a finite number of plots. Decentraland has carved out 90,000 parcels measuring 50ft. X 50ft. As these plots are purchased, prices are likely to rise. The Appeal of Digital LandAs the metaverse is built out, more people are joining online communities. As such, they may have a creative desire to express themselves by owning things in these virtual worlds, including land. In several instances, individuals are acquiring virtual “stuff.” This includes, but is not limited to, items used in online games. To store these things, users need digital homes. Online Shopping and EventsRetailers are setting up virtual stores where individuals may purchase goods for both the digital and physical world. Events are held in virtual worlds. Superstars such as Justin Bieber, Ariana Grande, and the Weeknd held concerts in virtual worlds. Companies may use their digital real estate for advertising. Virtual world real estate is being snapped up as companies bet that more people will shop and attend events in digital spaces, thus driving up the value of digital land. Becoming a Digital LandlordA lot of companies are buying large tracts of digital space in hopes of renting it out to retailers or event planners. For example, they may construct a virtual mall and rent out stores within that mall. One firm is constructing an 18-story building with plans to lease it to lawyers and cryptocurrency exchanges. As in the real world, zoning rules dominate the metaverse, dictating what can be built and where. As more individuals join virtual worlds, the potential value of digital real estate may increase. The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. MTVR may provide an attractive vehicle for individuals to gain exposure to the metaverse.1 Bizouati-Kennedy, Yael, Metaverse Virtual Real Estate is Booming: What’s the Appeal?, Yahoo Finance, 12/3/212 Putzier, Konrad, Metaverse Real Estate Piles Up Record Sales in Sandbox and Other Virtual Realms, Wall Street Journal, 11/30/21
1 min read · 2,020 views
Bong-Geun Choi
Dec 28, 2021
Is the Metaverse the New Frontier for Healthcare?
While it is not entirely built out, elements of the metaverse are being used in both medical training and procedures. As technology advances, the metaverse may offer the potential for significant advances in the field of medicine. Current Metaverse Technologies in UseCurrently, the healthcare industry is utilizing some of the essential components that will ultimately comprise the metaverse, namely, virtual reality (VR), augmented reality (AR), mixed reality (MR), and artificial intelligence. As these technologies are built out, the medical industry will likely make greater use of them. Virtual TrainingAR and VR are being used extensively in medical training. Examples include:The World Health Organization (WHO) is using AR to train COVID responders, including a training course on the proper techniques and sequences to put on and remove personal protective equipment.Medical schools are using AR and VR to train students to perform a wide range of surgical procedures. AR and VR allow for a 360-degree view of ailment, as well as the replication of real-life procedures. AR and VR technologies may be used to create real-life situations, allowing students to perform virtual procedures without the risk of making mistakes on human subjects. It may allow the assemblance of students from far-flung locations to train in one virtual classroom. Real-Life ProceduresAR and VR systems are being used for activities that support diagnoses and pre-surgical preparation and training. For example, using X-rays, MRIs, and CT scans can create an immersive virtual environment that allows a surgical team to devise the procedure before making the first incision and rehearse the surgery beforehand. AR and VR technology is also being used to assist in surgical procedures. Such technology was used in June 2020 in when surgeons at Johns Hopkins used AR in a procedure that inserted six screws in a patient’s spine during a spinal fusion surgery. The surgeons used an AR headset with a see-through eye display that projected images of the patient’s internal anatomy. The surgeon described it as “having a GPS navigator in front of your eyes in a natural way so you don’t have to look at a separate screen to see your patient’s CT scans." Medical Facility DesignAR and VR technology has been used when designing operating rooms. The technology allows visualization of all the people, equipment, and surgical setups for various procedures. This virtual process will allow for optimal design without the need of workers being physically present in the operating room. Moving ForwardMetaverse technology will likely continue to improve. As such, the potential for its use in the medical field will also likely progress. How may individuals gain exposure to the metaverse? The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. MTVR may hold companies developing technologies that will be used in the medical industry. MTVR may provide an attractive vehicle for individuals to gain exposure to the metaverse.
1 min read · 1,840 views
Bong-Geun Choi
Jan 01, 2022
The State of NFTs in 2022
NFTs became one of the most popular buzzwords in recent years and won headlines around the world. Between 2020 and 2021, the volume of transactions in the NFT market went from 82 million dollars to 17 billion dollars, a growth of more than 21,000%. In almost one year, NFTs have gone from being a tool used by just a few tech experts to an increasingly popular technology among both companies and individual users. But how much of it is sustainable in the long term? How much of this market really makes sense? Are we experiencing a bubble in the NFT market?In 2022, the NFT market remains heated, with the number of transactions, users, and volume growing rapidly. This is not to say that the market does not have its ups and downs. In fact, 2022 has been marked by the drop in the prices of various collections and, at certain weeks, the drop in the number of transactions. How does the market now differ from the market in 2021, and what can we expect in the next few years? We can analyze these questions in three major spheres: collections and utility, technology, and mass adoption. Collections and UtilityStarting with collections and utility, we are still living the hype of collections focused on profile pictures, and this is a trend that is expected to continue for some time. These collections create NFTs that represent an image that can be used as a profile picture in a social network profile.This type of collection has grown so much because it bridges Web 2.0 (social media, cloud, and platforms) and Web 3.0 (blockchain, smart contracts, and tokens). When someone decides to use an NFT as a profile picture on social media, they are sending a message to their audience that they are a person who is aware of new technologies and a person who is part of this new world. An NFT as a profile picture can also help to send a general message about oneself, just like how clothing, followed pages, and liked posts can act as a means of self-expression. Although people believe that the profile picture hype is wearing off, I believe it is still far from over. Despite large volumes, NFTs have yet to reach mass adoption. Social media is a showcase for users to show who they are and NFTs, in the end, are a powerful form of storytelling. NFT profile pictures are a way for users to tell stories within the online environment, and a lot of people still don’t understand its importance. There is another important point: an NFT simply as a profile picture is probably not enough going forward. In 2021 we saw collections making millions in volume with no real use for their owners. Without utility or great storytelling, 99% of collections will go to zero. From now on, collections should convey the utility they will bring to their owners. For this, it is necessary for the makers of the collection to understand the audience they are attracting, so that the uses make sense to those who purchase the NFTs. This utility of NFTs can be exclusive access to content, new collections, online and offline events, and more. TechnologyThe second point, technology, is one of the hottest trends at the moment. Last year brought a very powerful inflection point for the NFT market and it is seldom seen or discussed. The growth in transaction volumes has attracted not only creators and buyers, but also companies developing adjacent technologies, rarity analysis tools, data aggregators, management tools for NFT communities, and others. This movement is just beginning. This year already shows that there are thousands of talented entrepreneurs building tools for this market. Every new innovation brings the potential for other innovations to emerge and that is exactly what we are witnessing right now. In the coming years, we should expect to see more and more tools emerging to solve the problems and challenges of the NFT market. Mass AdoptionFinally, despite high volumes, the NFT market is still far from mass adoption. This is due to both technical and market education issues. There are many barriers to entry in this market right now and these points need to be addressed: better UX and UI, growth of sidechains, cheaper layer 1 transaction fees, layer 2 with more users, etc. In addition, it is necessary to work on raising awareness so that the general public views this market differently. A majority of people still link the NFT market to environmental issues, speculation, money laundering, get-rich-quick schemes and so on. The entry of new players can also help with mass adoption. Some of the biggest business platforms in the world, such as Instagram, YouTube, TikTok, Twitter, and Amazon, have already started to incorporate or have already announced that they are studying the incorporation of NFTs in their products. Despite the discussions about centralization and decentralization, there is no denying that this will contribute greatly to the mass adoption of NFTs.
2 min read · 1,725 views
Tiago Amaral
May 30, 2022
All
Hang Up Your Smartphone and Put On Smart Glasses
Technology industry leaders are increasingly predicting that smart glasses will replace smartphones. Alex Kipman, the inventor of the Microsoft Hololens, a mixed reality headset, went so far as to say that “smartphones are dead, but people don’t know it yet.”[1] Will smart glasses replace smartphones? What attractive features do they possess relative to the smartphone? Integrating Augmented RealitySmart glasses utilize augmented reality (AR) technology to overlay the physical world with digital information. AR supplements or enhances our experiences with the real world through additional information that may not be readily available. Some examples may include:Mapping apps that can provide the user with real-time directions and navigationFacial recognition to help you remember the person’s name to whom you are talking and providing additional information about themRestaurant recommendations, reviews, and menus by just looking at a storefront or a streetscapeTranslation of road signs from foreign languagesViewing a store’s inventory from the outsideAnd, of course, making phone calls Why Smart Glasses?AR technology does not require a complete disassociation from the outside world like virtual reality (VR) technology does. Therefore, it may serve as a natural bridge between the physical and digital worlds. In the United States alone, almost 200 million people wear glasses for corrected vision, while global usage is estimated at over two billion.[2] At the same time, most of us probe the world around us through our smartphones or tablets. Smart glasses combine these two items, giving more convenience and one less item to carry around. Big Tech’s Interest in Smart GlassesMany large global technology companies are racing to deploy AR technology and deliver smart glasses to the marketplace. For example:Apple is rumored to be delivering an AR headset, or smart glasses, to the market sometime in 2024[2]Meta is also expected to deliver its own version of AR glasses to the marketplace in 2024, potentially months before Apple[2]Snap’s glasses, currently in the marketplace, let users snap pictures and videos and add AR effects to those clips inside the Snapchat app[1] Microsoft’s Hololens, a mixed-reality headset, is already available, although it may be too large and wieldy for all-day, everyday use[2] Estimates of GrowthThe market for AR and VR headsets is expected to grow tenfold from 2021 through 2028. [2] Such estimates suggest an attractive investment opportunity. How may investors gain exposure to companies involved in AR technology and, specifically, smart glasses technology? The Fount Metaverse ETF (MTVR)The Fount Metaverse ETF seeks to provide investment results that, before fees and expenses, generally correspond to the performance of the Fount Metaverse Index. The index was designed to measure the performance of companies that develop, manufacture, distribute, or sell products related to metaverse technology. One of the four segments that MTVR focuses on is AR. Thus, MTVR may provide investors with exposure to companies at the forefront of AR and smart glasses technology. For a full list of holdings, please click here. [1] Fernandez, Ray, Will Smart Glasses Replace Smartphones?, TechRepublic, 7/28/22[2] Mehta, Tushar, How AR Glasses Are Going From Niche Gadget to Smartphone Replacement, Digital Trends, 6/30/22
1 min read · 191 views
Bong-Geun Choi
Oct 11, 2022
General & Grocery Retailers Look to Subscriptions
General and grocery retailers[1] are increasingly looking to subscription models to counter plummeting consumer loyalty and competitive pressures from e-commerce, subscription boxes, and quick retail. How are retailers using subscriptions to differentiate their products and shopping experience? Increased Challenges Exacerbated by the COVID-19 PandemicRetailers faced competitive challenges prior to the pandemic. However, 62% of consumers changed their shopping habits during the pandemic, and 30% changed the stores they patronize for better value and convenience.[2] Quick retail and subscription boxes have posed considerable challenges to retailers. For example, quick commerce digital retailers generated about $20 billion in revenue in 2020 alone. Subscription boxes like Dollar Shave Club and Harry’s shrunk Gillette’s market share from 70% to 50% in the nine years ending in 2021. Shifting Consumer PreferencesSubscriptions may help retailers adjust to shifting consumer preferences. Subscribers list convenience as the top perceived benefit, followed by cost savings and more variety. Potentially more important to retailers is that 64% of subscribers feel more connected to companies with whom they have a direct subscription experience versus companies whose products they can purchase one-off. Thus, subscriptions may help retailers appeal to consumer preferences and build brand loyalty. How Are Retailers Using Subscriptions to Improve the Customer Experience?An examination of 15 retail subscription programs found the top five similarities among plans:13 out of 15 offer free or fully discounted delivery.11 out of 15 have discounts at the core of their value proposition.11 out of 15 have started using free trials to bring in customers.9 out of 15 are within a comparable range - $10.70-$12.99/month.9 out of 15 propose annual subscriptions providing customers with a discounted deal compared to monthly payments in exchange for extended commitment and upfront payment. How Are Retailers Using Subscriptions to Differentiate Themselves?Five major differentiators among retailers offering subscriptions include the following:In-store – using subscriptions to improve a shopper’s in-store experience. This may include early shopping hours, dedicated in-store priority lines, priority access to frequently sold-out items, etc.Out-of-Store Shopping Experience – using subscriptions to focus on the out-of-store or online shopping experience. This may include priority delivery times for subscribers, personal online shoppers, priority access to items that sell out quickly, etc.Lifestyle Experiences – creating unique experiences for subscribers that are often linked or adjacent to core offerings and overlap with the consumer’s interests. These may include food and wine experiences, free lifestyle publications, monthly goodies like pizza or chocolate, etc.Loyalty Perks Beyond Discounts – which may include early access to promotions or events, members-only deals, double loyalty points, etc.Financial Services – retailers may offer financing for subscribers, including no-interest or no-fee credit cards. As competitive pressures increase, subscription models may help retailers counter these challenges while building loyalty by providing differentiated products and services for subscribers. The Fount Subscription Economy ETF (SUBS)The Fount Subscription Economy ETF (SUBS) seeks to provide investment results that, before fees and expenses, generally correspond to the total return performance of the Fount Subscription Economy Index. The Index was designed to measure the performance of companies engaged in the business of providing subscription services, i.e., companies that sell products or services for recurring subscription revenue. SUBS may present an attractive vehicle for individuals to gain exposure to companies offering subscription-based pricing models. For a full list of holdings, please click here. [1] A general retailer sells a wide variety of goods, excluding grocery and food products; we will refer to general and grocery retailers collectively as retailers[2] All data sourced from: How General & Grocery Retailers are Fighting Back with Subscription Models, Subscribed Institute, March 2022
1 min read · 188 views
Bong-Geun Choi
Oct 11, 2022
What Are the Different Types of Blockchain Networks?
Blockchain has gained tremendous popularity in recent years in the industry due to being an immutable and distributed ledger technology. The term “blockchain” figures out to the utilization of a “shared distributed database,” which could make digital transactions for a network of users and trace all of the tangible or intangible assets involved in the transaction. The four major advantages which define a distributed system are higher computing power, cost reduction, higher reliability, and the ability to grow naturally. All of those properties focus on one simple and powerful quality: the system’s integrity to execute smooth and reliable functioning.Different Types of Blockchain NetworksThere are primarily two different types of blockchains: public and private blockchains, and there are two other derivatives: hybrid and consortium. Although there are multiple requirements to consider, different blockchain networks can be used to perform secure transactions in a network. Public Blockchains: A public blockchain means a permissionless decentralized system where data in the blockchain network is immutable and irreversible. All users in the network can access the chain and any amendments made would result in adding new blocks to the chain. Bitcoin, Ethereum, and Litecoin are examples of public blockchain systems. Private Blockchains: The significant distinction between public and private blockchains is that the former may be joined by everyone, while only authorized users may enter the latter. This blockchain network can benefit certain organizations or enterprises because they restrict the number of participants or only allow a selected number of participants into a network. Hybrid Blockchains: Hybrid blockchains exhibit properties of both public and private chains. The hybrid blockchain design is distinguishable because it is not accessible to everyone, but still demonstrates more blockchain features like immutability and irreversibility. The users of hybrid blockchains can choose their participants and decide which transactions are made public. Consortium Blockchains: Consortium blockchains are blockchains controlled by a group of organizations, rather than individuals, similar to private blockchains. Consortium blockchains are more decentralized than private blockchains which results in higher levels of security. Consortium blockchains have potential to thrive in businesses, banks, and other payment processors. SummaryThe blockchain's primary application is to perform transactions in a secure network. People utilize blockchain systems for several different purposes. The significant use cases we see today, and may see in the the future, are in the healthcare sectors, digital transactions, NFT (non-fungible token) marketplaces, and real estate management. In 2019, it was estimated that around $2.9 billion was invested in blockchain technology, which represents an 89% increase from the year prior. Additionally, the International Data Corporation has estimated that corporate investment in blockchain technology will reach $12.4 billion by 2022[1]. According to findings from Research and Markets, the worldwide blockchain supply chain industry is expected to reach over $3 billion by 2026[2]. Some countries like China, India, Australia, and Singapore are witnessing growth in a number of start-ups in cryptocurrency and blockchain technology. This means that organizations have joined various conferences to brainstorm how to further develop the technology and understand the value of blockchain. 1) del Castillo, Michael. “Blockchain Goes To Work At Walmart, Amazon, JPMorgan, Cargill and 46 Other Enterprises,” Forbes, April, 26, 2019.2) “Global Blockchain Supply Chain Market by Offering (Platform, Services), Type (Public, Private, Hybrid & Consortium), Provider, Application (Asset Tracking, Smart Contracts), Enterprise Size, Vertical (FMGC, Healthcare), and Region - Forecast to 2026,” Research and Markets, March 2021.
1 min read · 355 views
Amala Bastian
Oct 05, 2022
Investors should consider the investment objectives, risks, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 855-425-7426 or visit our website at www.fountetfs.com. Read the prospectus or summary prospectus carefully before investing.
Exchange Traded Concepts, LLC. serves as the investment advisor to the Funds. The Funds are distributed by SEI Investments Distribution Co., (SIDCO) 1 Freedom Valley Drive, Oaks, PA 19456. SIDCO is not affiliated with Exchange Traded Concepts, LLC. or Fount Investment Co. Ltd.
Risk Disclosure:
Investing involves risk, including possible loss of principal. There is no guarantee the Funds will achieve their stated objectives. In addition to the normal risks associated with investing, international investments may involve the risk of capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or social, economic, or political instability in other nations. Emerging markets involve heightened risks related to the same factors, as well as increased volatility and lower trading volume.
The Funds’ concentration in an industry or sector can increase the impact of, and potential losses associated with, the risks from investing in those industries/sectors. For MTVR, the Fund may be concentrated in the entertainment and interactive media & services industries. The entertainment industry is highly competitive and relies on consumer spending and the availability of disposable income for success, which may cause the prices of the securities of companies to fluctuate widely. The prices of the securities of companies in the interactive media & services industry are closely tied to the overall economy's performance. Changes in general economic growth, consumer confidence, and consumer spending may affect them. MTVR may also be subject to the specific risks associated with metaverse companies. These risks include but are not limited to small or limited markets, changes in business cycles, world economic growth, technological progress, rapid obsolescence, and government regulation. Smaller, start-up companies tend to be more volatile than securities of companies that do not rely heavily on technology. Metaverse Companies may rely on a combination of patents, copyrights, trademarks, and trade secret laws to establish and protect their proprietary rights. There can be no assurance that these steps will be adequate to prevent the misappropriation of their technology or that competitors will not develop technologies that are equivalent or superior to such companies’ technology.
For SUBS, the Fund may be concentrated in the software industry. Technological changes, pricing, retaining skilled employees, changes in demand, research & development, and product obsolescence can affect the profitability of software companies causing fluctuations in the market price of company securities.
Both Funds are subject to communication services sector risk, which can involve the same risks as being concentrated in the software industry. Network security breaches, potential proprietary or consumer information theft, or service disruption can negatively affect companies’ stock prices.
The Funds are non-diversified. The Funds are new and have limited operating histories for investors to evaluate. New and smaller funds may not attract sufficient assets to achieve investment and trading efficiencies. In addition to the normal risks associated with investing, investments in smaller companies typically exhibit higher volatility.
0 MTVR · SUBS
MTVR · SUBS