Should SmileDirectClub prioritize expanding its retail locations for in-person scans or invest in improving its at-home impression kit technology?

Introduction

The trade-off question at hand is whether SmileDirectClub should prioritize expanding its retail locations for in-person scans or invest in improving its at-home impression kit technology. This scenario involves balancing the expansion of physical presence against enhancing remote capabilities, both aimed at customer acquisition and service quality. I'll analyze this trade-off by examining the business context, user impact, technical feasibility, and resource allocation, ultimately providing a strategic recommendation.

Step 1

Clarifying Questions (3 minutes)

• Given the direct-to-consumer nature of SmileDirectClub, I'm thinking our revenue model heavily relies on customer acquisition and retention. Could you share how our current split is between retail and at-home kit sales?

Why it matters: Helps understand the current balance and potential for growth in each channel Expected answer: 60% retail, 40% at-home kits Impact on approach: A more balanced split might suggest focusing on improving the lagging channel

• Considering user behavior, I'm assuming convenience is a key factor in choosing between retail and at-home options. What's our current Net Promoter Score (NPS) for each channel?

Why it matters: Indicates customer satisfaction and potential areas for improvement Expected answer: Retail NPS slightly higher due to professional assistance Impact on approach: Lower NPS in one channel would prioritize improvements there

• From a technical standpoint, I'm curious about the accuracy rates of our at-home impression kits compared to in-person scans. Do we have data on this?

Why it matters: Affects the quality of treatment plans and customer satisfaction Expected answer: In-person scans slightly more accurate but at-home kits improving Impact on approach: Significant accuracy gap would prioritize at-home kit technology improvements

• Regarding resources, I'm thinking about our current team structure. How are our product and operations teams currently split between retail and at-home kit focus?

Why it matters: Indicates our current resource allocation and potential for scaling Expected answer: Teams are currently balanced between both channels Impact on approach: Uneven distribution might suggest reallocation before expansion

• Looking at our timeline, I'm wondering if there are any upcoming market expansions or product launches that might influence this decision. Are there any significant milestones in the next 6-12 months we should consider?

Why it matters: Aligns decision with broader company strategy and timing Expected answer: Planning to enter new international markets in Q3 Impact on approach: International expansion might favor improving scalable at-home kit technology