Blue Apron posts 34% slump in Q3 revenues, but says strategy to focus on 'high affinity consumers' is working
Speaking to analysts on Thursday after posting a net loss of $26.m on revenues down 34% year-on-year to $99.5m in Q3, Blue Apron CEO Linda Findley Kozlowski said orders were down 35% in the quarter, while customer numbers have dropped significantly from over a million in Q1 2017 to just 386,000 in Q3 2019.
However, average order value rose to $57.60 (vs $56.79 in Q3 2018), while average revenue per customer was $258 (vs $233 in Q3 2018), and orders per customer were up 10% year-over-year.
"As anticipated, we saw declines in revenue and customer count in the third quarter consistent with what we expected with this approach," said Kozlowski.
"However, we continue to see year-over-year improvement in the metrics that we believe are key indicators of a strengthening customer base.
"We believe that this strengthening of our customer base validates our more deliberate marketing approach and is foundational as we continue to execute on our growth strategy."
She added: "Heading into 2020, we plan to build on this approach to lean back into marketing investment, as we make improvements to the product and customer experience. We’ll continue to avoid initiatives that would generate short-term revenue at the expense of inefficient returns on our marketing spend, and take the time to build the right product and marketing mix for sustainable growth."
Engaging and retaining customers
The company - which has seen its stock price remain in the doldrums after successive quarters of bad news - said it is deploying multiple strategies to engage target consumers and keep them interested once they sign up, including a stronger focus on 'plant-forward eating' via partnerships with high-profile brands such as Beyond Meat, more 'interesting' produce, new items for regular recipe rotation such as tofu, chickpea pasta, and date syrup, and a move into dessert kits.
New culinary partnerships with high-profile chefs will also provide opportunities to "engage customers with compelling stories and personalities behind our recipes," added Kozlowski.
According to an email survey of 6,000+ Blue Apron account holders conducted in December 2018, 29% of respondents are cooking for children under the age of 18 and 19% select family plans. 82% of account holders are female within three key age brackets: 25-24, 35-44, and 55-64. 56% have household incomes of $100k+, 33% are in the $50k-99k bracket, and 11% have household incomes of below $50k.
