Erik Woodring: Okay, that’s really helpful. Thank you both for all of that color. I guess maybe my second question is for you, Brian. And your business is transactional and very seasonal. And we haven’t yet passed the 2023 holiday period, but you’ve given us some fairly specific guidance for the entirety of 2024. Can you maybe just help us understand what gives you confidence to kind of set some of these bogies for next year and kind of how you come to these conclusions so far in advance? Just give us some confidence in the baseline that you’re setting for next year would be really helpful. And that’s it for me. Thank you.
Brian McGee: Yeah, no worries. Well, let’s say, I think we’re going to see continued growth on the entry level to more units than we were doing this year, because we’ll have a full year of selling that. So that’s several hundred thousand units alone going into 2024 and we’re seeing that demand. So that’s going to continue. We really started this kind of mid or, call it, May of this year. So, it’s just kind of putting a full year bent to kind of the increase in demand. We’re seeing strong demand in HERO12. We expect that to continue. And we have some other new products coming that are going to — should — we would expect that they’re going to do really well next year. So at least three new products next year coming as well as what we’ve got today going into 2024.
So from that perspective it’s good. We’ll continue to add doors, expand that reach another 14% next year. We’ve got the full year of pricing at our lower price points, $399 and below, versus $499 and below. That alone is lifting unit volume, and we’re seeing that demand happen as we meet the consumer where they are. So that’s another aspect of where we go and adding more doors and we’re driving a lot more engagement with subscription. We’ll drivee subscription up, we expect in the year. So we’re seeing positive momentum on where we’re going so far with Q3 now behind us, Q4 ahead of us with really strong retail demand and consumer demand. So I think we can look ahead and go — the moves we’ve made mid-year of 2023, we expect to continue to be playing out in 2024.
And then I talked — that’s on the top line, and then I talked about how do we improve margin and getting to about 37%. And that’s really key for us next year as we drive that margin. OpEx goes up a little bit to support innovation. And that goes right to the bottom line for pretty substantial profit improvement as we laid it out.
Operator: [Operator Instructions] And our next question comes from Martin Yang from Oppenheimer. Martin, your line is now open. Please go ahead.
Martin Yang: Thank you for taking the question. First question is about retention rate. I really appreciate your sharing the first year, second year retention. Can you maybe comment on how those retention rates changed versus a year or two years ago?
Brian McGee: Yes. Hi, Martin. This is Brian. Retention rates have generally been increasing and have gone from the 50s now up to — in the first year to 60% to 65% and year one and year two is holding at 70% to 75%. So we’re very pleased with that. We have, even within that, seen improvement in retention rates from those who have signed up on the web, and that’s improved about 10% — 5%. So that’s been encouraging — an encouraging trends and we’ll work more on the op stores as well. And as we get into next year, because we’ll be kind of three years into this, we can start reporting on the third year retention. But so far, the retention rates have continued to improve, as well as the tax rates, which are up year-over-year. So things have continued to move in the right direction on subscription as well.
