Glassdoor telling it how it is

Glassdoor is a website that lets prospective employees know what a company is really like. We have all heard about how great companies are from their recruiters but what do their employees really think? Glassdoor helps answer that question with 6 million company reviews, CEO approval ratings, salary reports, office photos and more. Glassdoor was co-founded by Rich Barton who has a track record for disrupting industries being the co-founder of Expedia the travel bookings site and Zillow a housing research site.

Glassdoor is not listed but when it does list on the stock exchange Rich Barton will likely have the track record of co-founding three billion dollar businesses an unheard of track record in such a small amount of time. As an investor I personally use Glassdoor to help evaluate company management and find their CEO rankings useful in assessing management from an employee point of view. Glassdoor has recently revealed the highest rated CEOs for 2014 as voted by employees (see below).

Source http://www.glassdoor.com/50-Highest-Rated-CEOs-LST_KQ0,21.htm

Linkedin's (LNKD) Jeff Weiner took top honours with an amazing 100% approval rating. Though a quick check of the website now shows a 98% approval rating still amazing given the sample of 680 ratings. LNKD was also voted the 3rd best place to work in a separate survey. Jeff Weiner took the crown from last years winner Facebook's Mark Zuckerberg who was rated 99% in 2013 but dropped off a few points this year. Jeff Weiner was singled out for creating a culture of transparency holding bi-weekly all company meetings and for 'walking the walk'. LNKD is all about recruiting and connecting people to make them productive and successful. It is only fitting that LNKD employees feel the same way giving high approval ratings to their CEO it seems LNKD really does walk the walk.

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive does not own a position in Linkedin (LNKD) stock

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Spam (not the ham)

Spam I'm not talking about the food but something closer to home the dreaded spam email. Spam is one of the worst email experiences only bettered by emails from your boss with a deadline demand of now or better yet yesterday. Bill Gates famously said that spam will be solved in 2 years time unfortunately this was back in 2004. While spam emails seem to target me well (tongue in cheek ie get rich quick, help me get out from debt, earn $10k a week working from home or even Viagra) they are very annoying. We have all personally experienced the rise of information and the overload it creates. As can be seen below the amount of digital information created and shared has multiplied and is expected to double over the next two years.

Email better than search?
There are around 3.3 billion email accounts in the world (source  Mashable). Spam still exists as emails are still one of the best ways to get in front of a customer. Apparently for every dollar spent on email marketing in 2011 there was a $40.56 return whereas search engine marketing produced a sold $22.44 return. (source Direct Marketing Association).

Spam straight to junk
People are becoming more savvy and socially aware. Luckily it is getting easier and easier to opt out junk email lists. Spam filters try to target the worst offenders by looking for spammy keywords and phrases such as using ALL CAPS or too many exclamation points!!!

Here’s a sample of criteria from SpamAssassin

Talks about lots of money (.193 points)

Describes some sort of breakthrough (.232 points)
Looks like a mortgage pitch (.297 points)

Contain urgent matter (.288 points)

Money back guarantee (2.051 points) attracts the highest spam score!

Apparently other words are help, percent off and reminders. If the total “spam score” exceeds a certain threshold, then the email goes to junk. 

Hard to invest 
Even though email is important the world is becoming multi-channel with email, mobile, social, display, search you name it. It is widely expected that the Chief Marketing Officer will spend more on technology than than Chief Information Officer by 2017. In a digital world consumers have high expectations they expect companies to keep track of their purchasing history and communication preferences. Email plays a major part as they might not visit your website or blog everyday but check their email multiple times a day. The only real pure play email/marketing stock listed on the exchange that you can invest in is Marketo (MKTO). Unfortunately MKTO trades on a software as a service multiple which tends to mean it is not yet making money. Maybe I should re-open that money back guarantee email...

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive does not own a position in Marketo (MKTO) stock

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

RetailMeNot a digital age coupon

RetailMeNot (SALE) is the world's largest digital coupon marketplace with 500,000+ coupons covering 50,000 stores. Over the period of Thanksgiving to Cyber Monday SALE helped to process 2.6% of all e-commerce sales in the US. According to the CEO only 2-3% of visits to retail websites are converted to sales, offering coupons and discounts can increase these conversion rates. Apparently the company has not lost a contract with a retailer in the past 4 years.

Your first question might be just how is this different from Groupon? Well Groupon gives big discounts from smaller retailers sporadically while SALE gives small discounts from big companies every day of the week. Similar to Groupon SALE does not charge advertising but a commission on sales it helps to transact typically around 5% of the order value. SALE works with 90 of the top internet 100 retailers.

See SALE's advertisement below helping you cope with deal envy since 2010.

Coupons gone digital
Advertising can be difficult on the smartphone with a smaller screen, but in SALE's favor the coupon is their ad. According to the CEO of Qualcomm we check our phones 150 times a day or about once every 6.5 minutes, it is with us all the time and helps us to discover new deals. With digital coupons you no longer need to carry around paper coupon cut outs for your purchases. As a result redemption rates for digital coupons are much better between 5% and 20% compared to paper coupons around 1%. Even a small increase in conversion is extremely valuable for retailers as industry data note that up to 65% of shopping carts online are abandoned. A coupon with an extra discount might just help you to checkout.

As can be seen below mobile web visits consist of 30% of traffic and 15% of revenue.

Risks? Coupons not exclusive
Most of their content is not exclusive as 1/3 of coupons are contributed by consumers. Only around 5-10% of coupons are exclusive. Gross profits are also high at 93% potentially only room for them to go down. Also a worry are Google and Groupon who could crush the business if they decided to focus more on coupons.

Market expanded no longer just online
Having a mobile app means SALE has more than 6,000 shopping locations that the app can recognize (geofenced) when a user enters a shopping mall and offer discounts based on your location. This increases SALEs addressable market from just ecommerce to physical stores. So far 88 retailers have used their mobile app to offer discounts in store discounts for their 35,000 stores.

While the majority of coupons are American based. SALE does offer great access to Domino's Australia pizza codes coupon on!

http://www.retailmenot.com/view/dominos.com.au

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive does not own a position in RetailMeNot (SALE) stock

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Mobiles an any time everywhere shopping tool in China

KPMG has put out an interesting report on how the internet is affecting Chinese consumers. They have a few interesting charts I've shared below. The biggest impact is the effect the mobile phone is having on retail. Many Chinese have leapfrogged straight to the mobile phone as a computer in their pocket rather than experiencing a computer just on their desk. KPMG's survey found that 69% of respondents used a desktop computer while 53% said they used a smartphone.

No stores? Shop online
The Chinese consumer is not the least worried about physically trying on shoes. Sales on a % basis are now equal to the US. A reason for this is that some of the lower tier cities do not have the access to brands in physical stores creating a great opportunity for online retailers. The most popular online category is cosmetics.

http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/China-Connected-Consumers-201402-v2.pdf

No more twiddling thumbs
In the past whenever you used public transport you would see twiddling thumbs now you see those thumbs being put to good use buying goods and growing the economy! Being able to buy whenever and wherever is a major advantage. Social media also plays an important part and was rated as the best way to find information on purchases slightly ahead of word of mouth. With nearly instantaneous feedback consumers can receive immediate advice from friends on purchases through social media.

http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/China-Connected-Consumers-201402-v2.pdf

It seems mobile payments are connected to eCommerce which gives some credence to eBay's current argument against splitting up their eBay and Paypal businesses. The market in the US is still up for grabs with other companies like Square, Apple, Visa and even Starbucks competing in the mobile payment space. In China apart from Union Pay (a network much like Visa and Mastercard but government owned) the battle for consumers dollars online is between an eCommerce site and a social network. They are AliPay which is owned by Alibaba an eCommerce site and TenPay owned by Tencent a social messaging service. It is amazing to think that nearly half of the internet users in China have made a mobile purchase. Cash is no longer king!

http://www.kpmg.com/CN/en/IssuesAndInsights/ArticlesPublications/Documents/China-Connected-Consumers-201402-v2.pdf

Jason

http://www.decisiveassetmanagement.com/

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.

Cabelas this retailer has game and a bank

How many retailers do you know have a game named after them? I can think of only one and that is Cabela's (CAB). The game developer Activision licensed CAB's brand name and released a number of hunter games the most well known being Cabela's big game hunter. Activision have also released mobile versions of the game. Don't worry as you'll see below no animals were harmed in this filming.

No animals harmed in this filming

As an investor this is important as it means the brand has authenticity with its customers. It is even more important in a world of show rooming where customers go and try on clothing and then buy it cheaper online. CAB is well protected as 33% of what it sells is its own branding. The percentage as a total of overall is even higher as it does not sell its own branded weapons though it does sell some ammunition.

Like Australia's BCF but with hunting and guns

45% of sales are hunting equipment this includes guns and ammunition. Sales spiked at the end of 2012 due to the re-election of Obama and concerns that he would push through stricter gun laws. This has not yet occurred but it has proven to be a boon for CAB sales. Apparently more than 2.7 million criminal checks on prospective gun buyers was carried out in December for a total of 19 million background checks in 2012. Apparently sales could have been even higher if there was adequate supply. CAB will have tough comps for the next two quarters see chart below as consumers stockpiled weapons.

Amazingly CAB has only 50 stores (4 in Canada) and plans to open their first stores in the South-East this year, see chart of stores below. CAB's estimate that they can grow to 225 stores with 14 new stores opening every year adding around 1 million square feet. These stores will be smaller than current stores but will provide for a better return on investment.

By the way we own a bank
CAB also owns a bank and issues its own general purpose credit card which is amazingly the 13th largest in the US by purchase volume ahead of such names such as Target. 97% is spent outside of CAB but this suggests strong loyalty as the more customers spend on the card the more points they generate to receive free merchandise. CAB awarded their customers nearly $200 million of freebies in 2012. Charge offs are also a lot lower than industry averages at 1.87% in 2012 this compares to AMEX at 2.1%. During the financial crisis credit card charge off rates were only 5.5-6% when peers were reporting 15%. Around 30% of CAB sales come from their credit card.

A retailer with its own computer game and credit card this retailer definitely has game.

Jason

http://www.decisiveassetmanagement.com/

Disclosure: Decisive does not own a position in Cabela's (CAB) stock

The material in this article is for informational purposes only and in no way constitutes a solicitation of business or investment advice. The material has been prepared without regard to any client's or other person's investment objectives. Before making an investment decision you should consider the assistance of a financial adviser and whether any investment or service is appropriate in light of your particular investment needs.