Latest / What the Flux / Coles cuts the liquor | Country Road's slippery slope | Canva's price hike

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Coles cuts the liquor | Country Road's slippery slope | Canva's price hike · What the Flux

• 0:05
  Speaker 1: This is what the Flux I'm brand and I'm justin
• 0:08
  Speaker 1: as Friday, the sixth of September, Jesse boy, if you
• 0:10
  Speaker 1: feel like getting insurance on your TV sometimes costs more
• 0:14
  Speaker 1: than the TV itself, you, my friend, are not alone.
• 0:17
  Speaker 1: There's a new data from Canstar that shows that and
• 0:20
  Speaker 1: your premiums on home and contents insurance has gone up
• 0:22
  Speaker 1: by about fifteen percent or a lazy two hundred and
• 0:25
  Speaker 1: eighty six bucks in the past twelve month of.
• 0:28
  Speaker 2: Rooney's very exy. Speaking of insurance, b man, we have
• 0:31
  Speaker 2: a brand spanking new academy course in the Flux app
• 0:34
  Speaker 2: this month. It's eight rundown on everything, and I mean
• 0:36
  Speaker 2: everything that you need to know about insurance. We're talking
• 0:39
  Speaker 2: income protection insurance. We're of course talk a health insurance.
• 0:42
  Speaker 2: To make sure to check out the academy in the
• 0:44
  Speaker 2: Flux app this month to become an insurance guru.
• 0:47
  Speaker 1: Three protective stories today, Juzzy boy, let's do it for
• 0:51
  Speaker 1: our first. Coles is cutting two of its liquor chain
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  Speaker 1: brands and it's going to fold them under the liquor
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  Speaker 1: Land banner to grow sales.
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  Speaker 2: Down down to brand. Sit down, bee man, So what's
• 1:01
  Speaker 2: going on? Here.
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  Speaker 1: Well, Josie boy, have you ever noticed how right next
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  Speaker 1: to a coal supermarket you'll often see a liquor Land
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  Speaker 1: or a Vintage Sellers, or even even maybe a First
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  Speaker 1: Choice Liquor Market I have. Well, that's because these three
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  Speaker 1: brands are all owned by the one and only Coals.
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  Speaker 2: And then man, when Coals release its annual profit of
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  Speaker 2: over one point one billion dollars last week, it had
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  Speaker 2: a little thorn in its.
• 1:21
  Speaker 1: Side, and that thorn is that its liquor earnings actually
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  Speaker 1: dropped six and a half percent.
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  Speaker 2: So now Coals announced it will scrap Vintage Sellers and
• 1:29
  Speaker 2: First Choice Liquor Market.
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  Speaker 1: Apparently these two liquor brands have low brand awareness.
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  Speaker 2: So now Vintage Sellers will now be known as Liquorland Sellers.
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  Speaker 1: And First Choice Liquer Market will be known as Liquor
• 1:40
  Speaker 1: Land Warehouse. Cop that chemist warehouse, cop that harehouse warehouse.
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  Speaker 2: So for Goals, the goal is to simplify the message
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  Speaker 2: to consumers because right now they're run as three separate
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  Speaker 2: liquor businesses under the same parent company.
• 1:52
  Speaker 1: Interesting, Josie boy, so what is the warehouse?
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  Speaker 2: Key?
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  Speaker 1: Learning here?
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  Speaker 2: Brand consolidation can be a powerful strategy for companies that
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  Speaker 2: own multiple brands within the same industry.
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  Speaker 1: Rather than juggling multiple brand identities that compete for the
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  Speaker 1: same market share, consolidating brands can streamline the whole experience.
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  Speaker 1: We're talking Simplifying operations could be reducing costs from marketing
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  Speaker 1: and staff, as well as creating a more unified customer experience.
• 2:16
  Speaker 1: Get this one. Currently, liquor Land, First Choice, and Vintage
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  Speaker 1: sellers might all be running separate promotions on the same
• 2:22
  Speaker 1: six pack of Corona in the same darn week.
• 2:25
  Speaker 2: Or as they say, three different ways across three different
• 2:27
  Speaker 2: brands now Dasboy.
• 2:29
  Speaker 1: In the early nineties, Colgate Palmoliv had acquired a heap
• 2:31
  Speaker 1: of household products and then they cut twenty five percent
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  Speaker 1: of their product range.
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  Speaker 2: It's saved in twenty million bucks a year, but also
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  Speaker 2: strengthened the market positions of the brands that remained.
• 2:40
  Speaker 1: So with this consolidation, Coles is aiming to strengthen its
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  Speaker 1: market position.
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  Speaker 2: And ultimately drive better sales artcomes as well.
• 2:47
  Speaker 1: For our second story, Country Road Group has reported a
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  Speaker 1: sixty six percent drop in annual profit as it struggles
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  Speaker 1: to find its feet after breaking away from David Jones.
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  Speaker 2: Jeez country Roads clearly not taking this breakup well be then,
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  Speaker 2: so what the story here, well.
• 3:00
  Speaker 1: Jose Wait. Country Road Group is the fashion retailer that
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  Speaker 1: owns the brands of Country Road and Mimco, Witchery, Tranery,
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  Speaker 1: Your Boys, Politics Man.
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  Speaker 2: The group is owned by the South African company Woolworth's Holding,
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  Speaker 2: the company that also used to own David Jones.
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  Speaker 1: Not the Aussie supermarket Wolworths, not.
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  Speaker 2: The fresh food people of South Africa.
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  Speaker 1: Country Road Group has just released its annual results and
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  Speaker 1: reported that sixty six percent drop inprofit to fifty one
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  Speaker 1: point three million bucks.
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  Speaker 2: All while Country Road is in the middle of a
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  Speaker 2: major workplace behavior scattled right now, yaikeriddies, But.
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  Speaker 1: Jose Wait Country Road reckons that a big part of
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  Speaker 1: its weak earnings was driven by Woolworth's selling off David
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  Speaker 1: Jones in December twenty twenty two.
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  Speaker 2: They reckon they lost out on a number of shared
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  Speaker 2: services that they had with David Jones and as a result,
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  Speaker 2: they've lost out on economies of scale too.
• 3:46
  Speaker 1: And right before I sneeze, Josey, wait, what is the
• 3:48
  Speaker 1: key learning here?
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  Speaker 2: Economies of scale happen when a company is able to
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  Speaker 2: spread its costs across more products and services. Yep, it's
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  Speaker 2: kind of like buying in bulk. You end up paying
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  Speaker 2: less per unit.
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  Speaker 1: You see, Jose Wait, When Woolwort's Holdings owned both Country
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  Speaker 1: Road and David Jones, the two companies benefited from economies
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  Speaker 1: of scale.
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  Speaker 2: They shared certain costs, this out same infrastructure, and it
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  Speaker 2: reduced overall operating costs for both companies.
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  Speaker 1: But since David Jones was sold, Country Road has been
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  Speaker 1: left to bear those production costs on its own.
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  Speaker 2: So it's not a major surprise. The Country Road Group's
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  Speaker 2: operating profit margin fell from twelve point four percent last
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  Speaker 2: year to just four point six percent in this year,
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  Speaker 2: and b Man, we've seen economies of scale do wonders
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  Speaker 2: in the supermarket sector.
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  Speaker 1: In fact, Colson Woolies have argued that if they lost
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  Speaker 1: their economies of scale, grocery prices would have to go up.
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  Speaker 2: And clearly Country Road Group is finding out the hard
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  Speaker 2: way right now.
• 4:34
  Speaker 1: For our third and final story, Canvas has jacked up
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  Speaker 1: the prices on some of its product offerings by up
• 4:40
  Speaker 1: to three hundred percent if you don't mind Josie boy As.
• 4:42
  Speaker 1: Canvas plans for a potential listing in twenty twenty six.
• 4:45
  Speaker 2: What happened to Canva being Adobe's cheaper cousin? B Man
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  Speaker 2: tell me more?
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  Speaker 1: Well, we all know the story of Canvas. The Ossie
• 4:51
  Speaker 1: founded design software startup.
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  Speaker 2: Started in Perth as a yearbook design platform and has
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  Speaker 2: grown to over one hundred and seventy million active users worldwide.
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  Speaker 1: And Joe boite can has already grown its valuation to
• 5:01
  Speaker 1: thirty nine billion bucks, which has made some Australian venture
• 5:04
  Speaker 1: capitalists a lot of muller.
• 5:06
  Speaker 2: Yet, first it monetized individual designs on the platforms one
• 5:09
  Speaker 2: buck per design.
• 5:10
  Speaker 1: Then it rolled out a premium account called Pro. Then
• 5:13
  Speaker 1: came Teams where you could collaborate with colleagues. Then came
• 5:15
  Speaker 1: a whole suite of products to compete with Microsoft.
• 5:18
  Speaker 2: And then of course the AI features, because are you
• 5:20
  Speaker 2: even in tech these days if you don't have AI?
• 5:23
  Speaker 1: So fair? Now Canvas has announced that it's Canvas Teams
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  Speaker 1: product will jump in price by a wap in three
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  Speaker 1: hundred percent.
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  Speaker 2: And they claim it's because of their growing suite of
• 5:31
  Speaker 2: AI products they need to be paid for by somebody boy.
• 5:34
  Speaker 1: The incident has blown up with people threatening to defect to.
• 5:37
  Speaker 2: Adobe not Adobe.
• 5:40
  Speaker 1: These pricing changes will test Canvas price elasticity, So what
• 5:44
  Speaker 1: is the key learning here? Price elasticity of demand is
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  Speaker 1: a concept that measures how sensitive buyers are to changes
• 5:50
  Speaker 1: in price.
• 5:50
  Speaker 2: If a product is elastic, a small increase in price
• 5:53
  Speaker 2: can lead to a significant drop in demand.
• 5:55
  Speaker 1: For example, airline tickets.
• 5:56
  Speaker 2: If the price goes up by five percent, but the
• 5:58
  Speaker 2: demand falls by tempers, the product is elastic.
• 6:01
  Speaker 1: When your ticket to Europe is tipping three thousand bucks,
• 6:04
  Speaker 1: you're starting to think about maybe mikinosk can wait until
• 6:08
  Speaker 1: next year.
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  Speaker 2: On the other hand, in elastic products see little change
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  Speaker 2: in demand despite price hikes.
• 6:13
  Speaker 1: For example, petrol, if the price goes up by fifty percent,
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  Speaker 1: we're not seeing fifty percent less purchases.
• 6:18
  Speaker 2: So aman it'll be interesting to see if Canvas users
• 6:21
  Speaker 2: perceive the new generative AI tools as essential.
• 6:23
  Speaker 1: Which could see demand remain stable even with higher prices.
• 6:26
  Speaker 2: Fox amm Homan Contents, Insurance, TPD, life, insurance. All the
• 6:30
  Speaker 2: sexy words you've never understood is all captured in a
• 6:34
  Speaker 2: nice little package in the Flex Academy. This month, it's
• 6:36
  Speaker 2: the Insurance Academy that we take you through everything you
• 6:39
  Speaker 2: need to know about insurance. To make sure to check
• 6:40
  Speaker 2: it out in the flex out this month.
• 6:42
  Speaker 1: Thanks for listening and we'll see you on Monday.