Meal-kit companies originally built their businesses using subscription models and deep discounts that didn’t result in long-term customer loyalty. But to create a sustainable, profitable business, Blue Apron is changing its strategy.
To achieve the profitability it is forecasting for the first quarter of 2019 and the full fiscal year, Blue Apron has stopped pursuing less profitable customers and cut back on marketing. Executives said those changes will result in declining revenue and customers but will increase the revenue per customer. In the fourth quarter, Blue Apron had 557,000 customers with an average revenue per customer of $252.
The New York-based company announced on its quarterly conference call that it is launching a new scaled-back version of its meal kits Friday with Walmart’s Jet.com. The $7.99 Knick Knacks meal kit comes with the sauces, spices, grains, dairy and recipe for a two-person meal and lets customers use store-bought produce and protein.
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