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BizReport : Ecommerce : September 25, 2019


Shoppers want subscriptions, here's how to meet the demand

According to some reports about 90% of software companies will be part of the subscription model by 2020, and it isn't just software. There are subscription boxes for everything from books to shave clubs and even high-end wines. Here's how your business can compete.

by Kristina Knight

Kristina: With most software businesses already going subscription, how long until other retail verticals join the subscription craze?

Tiffany Coletti Kaiser, EVP of Marketing, Digital Remedy: Any company that sells a product or a service has the potential to become a subscription company. As we've seen with Nike's recent launch of their subscription service, it is not a matter of can your brand do it, it's how are you going to do it in a way that is engaging with your consumers, while still beneficial to your business. We already know that people are shopping (for everything) differently. It is now about discovering how various industries will tap into that new reality, and leverage it for their bottom lines. 
Every D2C company does not necessarily have to be subscription-based, think Casper Mattress. The true competitive analysis is between direct-to-consumer companies versus traditional brands whose business models are largely based on brick and mortar, and/or third-party distributors. Traditional brands are more likely to add-on a subscription model as they attempt to compete with a direct-to-consumer economy, whereas direct-to-consumer companies are likely less worried about their category's traditional offering and more invested in surprising and delighting their current customer base in an effort to expand it, naturally upsetting the traditional brand/company as a consequence.

Kristina: What is driving the interest and 'signing on' for subscription services?

Tiffany: • Ease of transaction: Unless your credit card information changes, when consumers subscribe to a subscription-based service, they know exactly how much they are spending on a month-to-month or yearly basis, and no further work has to be done on their end. 

• Consumers love the opportunity to try and test out new things through a personalized service they feel is catered to their specific needs and interests. They enjoy experiencing something they wouldn't ordinarily have had the opportunity to otherwise. For example, "Vinyl Me, Please," is a record of the month club that helps people explore, experience, and enjoy music through their service. 

• Geared at positive social impact: with individual and customized experiences driving consumer intention, these subscription models allow brands to connect with customers directly in a way that would otherwise be impossible. 

Kristina: For retailers interested in trying a subscription model, what are some obstacles they need to address first? 

Tiffany: Retailers need to determine how they will provide consumers with a unique experience that they can't get somewhere else. It needs to be simple enough for the transition from traditional to subscription to make sense for their brand, yet complex enough for people to have an optimal user experience, customized to their individual preferences--especially if you are a retailer specializing in a vast catalog of offerings. Building up the infrastructure, resources, and the data needed for this to happen smoothly, can be daunting. 

Kristina: What are your top 3 tips for brands to launch a successful subscription product?

Tiffany: • Customization is key: one size will never fit all. The growth in subscription models is due largely in part to the individualized experiences people get while interacting with these brands. Many provide a human element to their business models, allowing customers to have an immediate and close connection to a brand. Take Curology, a custom skincare subscription service that puts users in direct contact with a healthcare provider to communi-cate with throughout their journey to healthier skin. The individualized experience is essential for their product to succeed with clients, and it is what gives their business model an edge. 

• Modern, sleek, sophisticated branding with advertising that is no BS: clear cut messages with explicit calls to action. People do not want to spend time guessing what exactly they are going to get through their subscription with a brand, and you will immediately lose their interest if you can't answer that question within the first few seconds of their online interaction. Simplified messaging, imagery, and navigation should be able to give customers just enough information needed in order for them to get on board and engage with your subscription product.  

• Take the opportunity to allow your customers to try and test new things, and experience something they wouldn't ordinarily have had the opportunity to. Consumers can fear commitment, and with constantly shifting interests, needs, and attention spans, providing people with a service that they only have to commit to for a month, and have the opportunity to alter to fit their current needs, is a massive perk for consumers. It allows them to remain engaged and loyal with your product, rather than switching to a different brand, while still figuring out a model that is right for them. 






Tags: advertising, Digital Remedy, ecommerce, mobile commerce, mobile marketing, subscription commerce, subscription service trends








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