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Narrator: "Robinhood E-Commerce Case. E-commerce is a business model that allows consumers to purchase goods and services via the Internet. One segment of E-commerce that has seen recent growth is online financial services, specifically online investing."
The visual shows the screen titled "Robinhood E-Commerce Case" as the narrator starts with audio 1. The next slide shows the text "E-commerce" on the top and the text "Purchase Goods and Services via Internet" on the bottom. A small shopping cart with four small boxes is shown above the laptop in the slide, and a few boxes are placed outside the cart.
The visual transitions to the next slide show the piled-up coins arranged on the honeycomb floor. The comb on which the piled-up coins are placed is shaded in yellow. The text "Online investment" is shown at the bottom of the slide.
Narrator: "There are many ways you can invest online, but investors have been increasingly using the Robinhood app to conduct these types of transactions. The Robinhood app was released in two thousand thirteen, and since then has challenged the model for investing. Amy is a twenty-eight-year-old graphics designer. She wants to make small-scale stock purchases but is not sure where to start. She does not have the time or the inclination to carefully research investments. She just wants a simple, fun investment interface instead of a complicated, detailed, boring one."
The visual shows a slide with the text "Released in two thousand thirteen" positioned at the top, while the text "Various methods of online investment" graces the bottom. The slide portrays five individuals actively engaged in tasks. The leftmost figure is depicted inserting coins into an envelope represented as a bar graph. Simultaneously, the two individuals positioned in the middle frame are busy marking the pie chart. The remaining pair of individuals on the right are observed utilizing a ladder to carefully place coins. A calculator is strategically situated in the right corner.
The subsequent visual depicts a hand holding a mobile phone, showcasing the GameStop price website. The mobile screen features a comprehensive display of prices, accompanied by a dynamic graph in motion, and the text "Robinhood" in the background followed by a feather symbol. The visual transitions into the next slide where a woman, Amy, is captured in a seated posture, attentively gazing at her computer screen. A speech bubble with the text "Where can I get commission-free trading, with no minimum account balance?" is shown.
A subsequent slide showcases a hand holding a mobile phone, with the other hand actively tapping an option on the device. The mobile screen reveals an array of data visualizations, including a pie chart and a bar graph. This hand image zooms out into the yellow-shaded circle, while another two yellow-shaded circles pop up next to the first circle. Inside the second yellow circle, an illustration portrays a man seated before a laptop, accompanied by a speech bubble inquiring, "Why go through piles of data? What's the benefit?" In the third circle, Amy is sitting on a chair in front of the computer and watching the video. A speech bubble with the text "I want a simple, clean interface" is shown.
Narrator: "She is not alone. There are many other young investors who have similar needs. Is there a platform that addresses their requirements? Enter Robinhood, a financial app and service that meets the requirements of investors such as Amy."
The visual shows the slide with the text "Amy’s requirements" at the top as the narrator begins with audio 3. Amy is shown on the right side sitting on his chair and watching videos on a computer, and her requirements are listed to the left as follows:
Later Amy's image goes off the slide, and a structure of a person holding a bow and arrows enters the slide, and he shoots an arrow on the first point of requirement.
Narrator: "We are talking about Robinhood, the financial services firm and app that caters to the requirements of "micro-investors", who buy stock in small quantities. Most of Robinhood’s customers are relatively young. The average age is around thirty years."
The visual transitions into the next slide where Amy's requirements are listed the same as detailed in description 3. The background of the slide showcases a mobile phone with the text Robinhood and a feather logo. In the next slide, the visual showcases the four customers who use the Robinhood app on their mobile phones, and the text at the bottom reads, Average age of Robinhood customers is thirty years.
Narrator: "In two thousand thirteen, Robinhood was one of the first to offer free stock trades, even for single shares. Prior to two thousand thirteen, high fees for stock trades discouraged small investors from participating in trading. The first wave of discount brokers, like Charles Schwab in the nineteen seventies, offered cheaper transactions in mutual funds and individual stocks than full-service brokers. However, there were still fees to be paid."
The visual showcases the blurred slide of description 4 with the highlighted text "Stock trading" in the middle, and the text at the bottom reads, "First to offer free stock trades, even for single shares." The same slide showcases the next text "Mutual funds" by sliding up the previous text, and the bottom text transitions into the text "Prior to two thousand thirteen, high fees were charged for stock trades." By sliding up the previous text, "Rise of discount brokers" appears in the middle, however, the bottom text reads, "Mutual funds become popular but required substantial investment required" which changes into the text "Discount brokers offered cheaper transactions than full-service brokers."
Narrator: "So, when Robinhood arrived on the scene, it challenged the status quo, much like its namesake legend. It gave a large number of first-time investors an opportunity to buy and sell stock by making trading free. But, if it offers free trades, how does it make money? Robinhood makes money in three primary ways: Payment for order flow, where traders pay Robinhood for sending them trades from the corresponding earnings, Interest from uninvested funds, and A premium service, Robinhood Gold, that provides advanced tools and market."
The visual showcases a slide that has a large phone or TV screen on the back. A woman is seen sitting on the chair with an opened laptop to the left. Beside her, a card with a downward facing arrow, positive and negative numbers are shown. A man standing on the ladder is shown holding the big upward-facing arrow with the text "BUY." The downward-facing arrow is shown above the woman’s head with the text "SELL." At the bottom, a text is shown that reads, "Offers free trades and provides easy access to stock markets."
The visual transition into the next slide, where a hand holding the mobile phone is seen consists of the feather symbol followed by the text Robinhood. The middle screen reads the text "How does Robinhood make money?" The text box moves up, and three round icons are popped up one one-by-one with the text, Payment for order flow, Interest from invested funds, and Robinhood Gold-advanced market research tools and "margin investing."
Narrator: "Besides free trades, what sets Robinhood apart from other user investing interfaces is its relative simplicity. It has given young investors what they value in an app ─ a more enjoyable user experience designed specifically for smartphone users. It offers animations and game-like features. While Robinhood has, in a way, transformed how online trading works, it does have some limitations and challenges. Customer service is quite limited, and the trading platform has occasionally experienced outages. One day in March twenty-twenty, for example, users were unable to trade, resulting in class-action lawsuits from those who lost money. In late twenty-twenty, Robinhood agreed to a sixty-five-million-dollar settlement with the SEC for failing to consistently seek the best trade prices for its users. Critics have claimed that Robinhood leads customers to risky investments like options and cryptocurrencies and, certainly, there is additional risk inherent to investing in individual stocks as opposed to diversifying across companies and sectors."
The visual displays the slide with the text "User Interface-Described as Charles Schwab meets Candy Crush." The text box moves up, and a few icons pop up one by one followed by the text. The listed text is as follows:
The visual transitions into the next slide that has the text "Limitations or Issues" on the top of the slide and the following text is listed below with some icons:
Narrator: "Robinhood had its share of controversies too. In twenty-twenty-one, a group of loosely organized individuals on Reddit using the r/wallstreetbets forum and so-called do-it-yourself trading platforms including Robinhood, managed to cause a sixteen hundred percent increase in the stock price of the struggling video game retailer GameStop. In order to combat the rapid increase in stock price, Robinhood suddenly restricted transactions of GameStop. This action by Robinhood lead to backlash from Robinhood’s customers, as well as lawmakers. Robinhood stated it took these actions because of financial clearinghouse-mandated deposit requirements that increased due to the unforeseen increase in volatility and trading of the stock. Lawmakers and users of Robinhood alleged that Robinhood placed the restrictions to protect hedge fund investors."
The visual displays the next slide with a transition. A mobile with a feather symbol is shown, and the background of the slide showcases the text "GameStop". A circle pops up over the mobile which contains the text "Involved in causing a sixteen hundred percent increase in the stock price of GameStop" inside another incomplete circle. One incomplete circle pops up next to the previous incomplete circle with the text "Then suddenly restricted transactions of GameStop," and then the third one pops up with the text "Received backlash from customers and lawmakers." The frame zooms out, and mobile moves on the right side, and the circle moves to the center, and five individuals enter to the left of the slide making sad, angry, and serious faces. The text appears on both bottom corners that is spoken by the narrator in audio 8.
Narrator: "Despite these concerns, Robinhood's approach is successful so far. Between two thousand seventeen and Twenty-twenty, it grew from two million to thirteen million users. While it's still only a fraction of the size of Charles Schwab, it has also grown much faster as it catered to an overlooked pool of customers. As you can see new technologies change E-commerce and customer behavior in ways that are unpredictable."
The visual displays the slide that shows the bar graph with five vertical bars. The bar graph is titled Robinhood followed by a feather symbol. The horizontal axis ranges from two thousand sixteen to two thousand twenty in increments of one unit, and the vertical axis ranges from zero to fifteen in increments of five units. The height of the bars is shown to increase as soon as the years go. The first bar height is two while the last bar height is thirteen. The upward-moving arrows are shown inside the bars of two thousand nineteen, and twenty-twenty. The text at the bottom reads, "Technologies change e-commerce and customer behavior in ways that are unpredictable."
The visual shows the slide with McGraw Hill red cube logo followed by the text "Because learning changes everything."
Copyright information for each image in the video: Copyright © The McGraw-Hill Companies, Inc. Permission required for reproduction or display.
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