Latest / What the Flux / Domino's slices off discounts | OpenAI's Aussie expansion | Lovisa's shiny new opportunity

Transcript

Domino's slices off discounts | OpenAI's Aussie expansion | Lovisa's shiny new opportunity · What the Flux

• 0:05
  Speaker 1: This is what the flux. I'm Brett and I'm justin
• 0:08
  Speaker 1: and it's Monday, the first of September. Juzzy boy.
• 0:10
  Speaker 2: As the property market heats up, so two is the
• 0:12
  Speaker 2: market for mortgage brokers.
• 0:14
  Speaker 1: Get this one.
• 0:15
  Speaker 2: In the March quarter this year, mortgage brokers around seventy
• 0:17
  Speaker 2: seven percent of all new residential home loans. That is
• 0:20
  Speaker 2: up more than seven percent since the same quarter just
• 0:22
  Speaker 2: two years ago.
• 0:23
  Speaker 1: Cutting the lunch of all the banks. Be man. Indeed,
• 0:26
  Speaker 1: it is a new month, which means we have just
• 0:28
  Speaker 1: done a deep dive into the best performance stocks on
• 0:31
  Speaker 1: the AX for August. There are some super interesting names there,
• 0:34
  Speaker 1: some you wouldn't expect, some you would make sure to
• 0:36
  Speaker 1: download the app and check it out.
• 0:38
  Speaker 2: Three revolutionary stories today, Juzzy boy, let's do it for
• 0:41
  Speaker 2: our first. Dominoes has served up its first annual loss
• 0:45
  Speaker 2: in twenty years after major discounting. But now they've warned
• 0:48
  Speaker 2: the discounting ends here. You're telling me no more three
• 0:51
  Speaker 2: pizzas and three sides for thirty ninety nine.
• 0:53
  Speaker 1: B man, what is going on here? So?
• 0:55
  Speaker 2: Dominoes is actually known as Domino's Pizza Enterprises, which is
• 0:58
  Speaker 2: Australia's largest pizza chain.
• 1:00
  Speaker 1: It's got more than three and a half thousand outlets
• 1:02
  Speaker 1: sprinkled across Australasia and Europe and Asia.
• 1:05
  Speaker 2: As well, and Josie Wait. It's fair to say that
• 1:07
  Speaker 2: during COVID, Dominoes was hotter than a spicy meat lover's
• 1:10
  Speaker 2: pits there.
• 1:10
  Speaker 1: Yep. It shares hit a record one hundred and sixty
• 1:12
  Speaker 1: one dollars during that period, but more recently they've been
• 1:15
  Speaker 1: sitting around the fifteen dollar mark and doesn't look like
• 1:17
  Speaker 1: it's going to get any better anytime soon. Nope. Dominoes
• 1:20
  Speaker 1: warned that it suffered a three point seven million dollar
• 1:22
  Speaker 1: loss in the last financial year, and this is its
• 1:24
  Speaker 1: first annual loss in two decades, compared to a ninety
• 1:27
  Speaker 1: two million dollar profit just last year. And the reason
• 1:29
  Speaker 1: for this loss, mister Margarita, it was mainly because it's
• 1:33
  Speaker 1: spent one hundred and twenty mil closing three hundred and
• 1:35
  Speaker 1: twelve under cooked stores, mostly in Japan. But be man,
• 1:38
  Speaker 1: Dominoes is planning a big reset in FI twenty six
• 1:41
  Speaker 1: of everything. Yep. The plan is to ditch confusing discounts
• 1:44
  Speaker 1: and vouchers and rather they're going to lean into every
• 1:47
  Speaker 1: day low pricing.
• 1:48
  Speaker 2: Seems like investors are unsure if this is actually the
• 1:50
  Speaker 2: recipe for success.
• 1:51
  Speaker 1: Yep. Many believe this ain't just a cycle, but something
• 1:54
  Speaker 1: structurally wrong with the Domino's business. That's why share price
• 1:57
  Speaker 1: took such a hit.
• 1:57
  Speaker 2: Hopefully the gluten free pieces are sticking around, Josy Boy.
• 2:00
  Speaker 2: So what is the key learning here?
• 2:01
  Speaker 1: Every Day low pricing is a retail strategy where companies
• 2:04
  Speaker 1: commit to offering consistently lower prices rather than relying on
• 2:07
  Speaker 1: promotions or discount you seeb Man. Discounts and promotions they
• 2:10
  Speaker 1: might boost sales in the short term, but they also
• 2:12
  Speaker 1: train customers to only buy when there's a good deal.
• 2:15
  Speaker 2: In fact, Jazi Boy a bit of a reference here.
• 2:17
  Speaker 2: Procter and Gamble in Germany ran a test on their
• 2:19
  Speaker 2: products between every day low pricing and the high low approach.
• 2:23
  Speaker 1: And over several months they found that every day low
• 2:25
  Speaker 1: pricing led to higher loyalty and higher repeat purchases than
• 2:28
  Speaker 1: the high low strategy with discounts and promotions, So Jaziboy.
• 2:31
  Speaker 2: While Dominoes might be known for its promotional pizza deals,
• 2:34
  Speaker 2: it may need to change its appeal.
• 2:36
  Speaker 1: It might even need to start appealing to people based
• 2:38
  Speaker 1: on the taste of the pizzas. So it's no surprise
• 2:41
  Speaker 1: that Domino share price copped a bit of a whack
• 2:44
  Speaker 1: for our second story. Chat GPT's open Ai is opening
• 2:47
  Speaker 1: its first Australian office and the winner is Sidney.
• 2:50
  Speaker 2: You huge win for Ai in Australia, particularly exciting for Sydney.
• 2:54
  Speaker 2: Juzy boy, tell me more. Okay, So open Ai and
• 2:56
  Speaker 2: it's chat GPT chatbot. They burst onto the scene in
• 2:59
  Speaker 2: Novenae twenty twenty two, and since then its adoption and
• 3:02
  Speaker 2: even cultural relevance has grown like crazy.
• 3:04
  Speaker 1: Yeah. Open ai has raised a lot of money across
• 3:06
  Speaker 1: the journey, and it's financially backed in a big way
• 3:09
  Speaker 1: by Microsoft.
• 3:10
  Speaker 2: Now in terms of valuation, jazy boy, open ai is
• 3:12
  Speaker 2: reportedly approaching a five hundred billion US dollar valuation in
• 3:16
  Speaker 2: an upcoming share sale.
• 3:18
  Speaker 1: But get this, be man. The number of weekly active
• 3:20
  Speaker 1: users of chatch apt in Australia has increased by two
• 3:22
  Speaker 1: and a half times just in the past year, and globally,
• 3:26
  Speaker 1: I'm talking more than seven hundred million people use it weekly.
• 3:29
  Speaker 1: But right now, open aiy's nearest employees to Australia have
• 3:32
  Speaker 1: been based in its Asia specific office in Singapore.
• 3:34
  Speaker 2: So on Thursday last week, open ai said it's fast
• 3:37
  Speaker 2: growing user base in Australia and reason deals like its
• 3:39
  Speaker 2: partnership with Combank means it's time to have a local
• 3:42
  Speaker 2: operation and having a local.
• 3:43
  Speaker 1: Presence will enable it to work more closely with policymakers
• 3:46
  Speaker 1: and deepen relationships with Australian researchers and institutions. So what
• 3:50
  Speaker 1: is the key learning here? The government is currently the
• 3:52
  Speaker 1: process of working out what it chooses to fight and
• 3:55
  Speaker 1: what it chooses to facilitate when it comes to AI innovation.
• 3:58
  Speaker 1: The government's exploring how to strike the ripeowns between introducing
• 4:01
  Speaker 1: laws to protect workers and also enabling AI adoption in
• 4:05
  Speaker 1: the right way.
• 4:05
  Speaker 2: For example, one contentious issue in Australia over the last
• 4:09
  Speaker 2: few years has been the relationship between big tech companies
• 4:11
  Speaker 2: and local publishers.
• 4:13
  Speaker 1: Who can forget Schoma's government's brawl with big dogs like
• 4:15
  Speaker 1: Meta and Google back in twenty twenty one.
• 4:17
  Speaker 2: And interestingly, open ai received no incentives from the New
• 4:20
  Speaker 2: South Wales government to choose Sydney as its headquarters lex
• 4:23
  Speaker 2: So why did open ai choose Australia.
• 4:26
  Speaker 1: Well, apparently the local talent pool and proximity partners and
• 4:29
  Speaker 1: customers like Combank and Camera.
• 4:31
  Speaker 2: But what's surprising given our small population is that Australia
• 4:35
  Speaker 2: is in the top ten countries globally for Chat GPT.
• 4:37
  Speaker 1: That's in terms of the number of developers using open
• 4:40
  Speaker 1: Ai products as well as Chat GPT subscribers. So open
• 4:43
  Speaker 1: Our's office in Australia means it will be able to
• 4:45
  Speaker 1: focus more deeply on building business relationships, but also increase
• 4:48
  Speaker 1: its presence in Camebra.
• 4:50
  Speaker 2: For our third and final story, ossie retailer Levisa has
• 4:54
  Speaker 2: seen a fourteen percent jump in annual revenue as it
• 4:56
  Speaker 2: prepares to steal market share from its major competitor, who
• 4:59
  Speaker 2: is now.
• 5:01
  Speaker 1: Sparkly little opportunity for an Aussie jewelry brand. So what
• 5:04
  Speaker 1: is the story here?
• 5:04
  Speaker 2: So Lavisa is an Australian jewelry brand that was founded
• 5:07
  Speaker 2: in twenty ten and they.
• 5:08
  Speaker 1: Grew pretty quickly by selling cheap earrings and necklaces and
• 5:12
  Speaker 1: bracelets that were twenty yet affordable and.
• 5:14
  Speaker 2: The jewelry has a lifespan of approximately three days and benman.
• 5:18
  Speaker 1: Since twenty ten, Lavisa has grown to over one thousand
• 5:20
  Speaker 1: retail stores in over fifty countries and in the latest
• 5:23
  Speaker 1: financial year, Lavisa's growth in the US, Canada and Europe
• 5:26
  Speaker 1: paid them back gold. That's right, Lavisa's reported an increase
• 5:30
  Speaker 1: of fourteen percent to their annual revenue compared to last
• 5:33
  Speaker 1: financial year, and investors are loving these shiny results. But
• 5:35
  Speaker 1: be man, that is not all because Lavisa's dialing up
• 5:38
  Speaker 1: their global expansion after a major jewelry competitor called Claire's
• 5:42
  Speaker 1: actually filed for bankruptcy this August. So now it's all
• 5:45
  Speaker 1: systems gore for an opportunistic expansio. So what is the
• 5:49
  Speaker 1: key landing year?
• 5:50
  Speaker 2: Opportunistic expansion is when a company takes advantage of external
• 5:53
  Speaker 2: events and market shifts to grow in new markets.
• 5:56
  Speaker 1: While Lavisa's already operating in many of the same markets
• 5:58
  Speaker 1: as Claire's, the sudden downfall has become a huge opportunity
• 6:02
  Speaker 1: for Laisa to capture new market share. Yep, Lavisa plans
• 6:05
  Speaker 1: to target Claire's customer base with a similar product offering
• 6:08
  Speaker 1: and quickly open new stores in locations near Claire's old
• 6:11
  Speaker 1: source and Juseyboy, Larisa isn't the only company to turn
• 6:14
  Speaker 1: a competitor's misfortune into a growth opportunity. Back in twenty twelve,
• 6:18
  Speaker 1: Hungary's national airline MALEV suddenly went out of business.
• 6:22
  Speaker 2: What a reference tell us more about Hungry's airlines, Jusey
• 6:26
  Speaker 2: boy Well.
• 6:27
  Speaker 1: Seven hours after they went out of business, Ryanair swooped
• 6:30
  Speaker 1: in to announce they've created a new base in Budapest.
• 6:33
  Speaker 2: Ryanair effectively replaced thirty one flight routes in and out
• 6:36
  Speaker 2: of Budapest that its competitor used to own.
• 6:38
  Speaker 1: So youcb man time is everything in Australian business and
• 6:42
  Speaker 1: Hungarian business too. Fox out. If you're trading in and
• 6:45
  Speaker 1: out of the share market and always want to keep
• 6:46
  Speaker 1: a track of the best performing companies, we have it
• 6:48
  Speaker 1: all covered in the Flux app today, so if you
• 6:50
  Speaker 1: want to learn more, make sure to download a Flex
• 6:52
  Speaker 1: app and check it out. Thanks for listening and we'll
• 6:54
  Speaker 1: see you on Wednesday.