Subscriptions: From “The Milkman” to Dollar Shave Club
One consideration for driving your retail sales is to evaluate adding a subscription service to your product or store. This area represents an opportunity for brands and retailers to take advantage of utilizing the practice of subscriptions. Subscriptions may have started with the milkman and the daily newspaper, but it has now evolved into a broad range of categories, including contact lenses, children’s items, supplements, cosmetics, feminine products, all things pets, razors, underwear, apparel, gaming, and wine & beer. The benefits of doing a subscription are more than meets the eye initially. Yes, convenience and replenishment of products are two primary benefits, there are a few more to consider. An extra dimension of Subscriptions is the opportunity to create a continuing relationship with the customer, along with driving brand loyalty, breaking out of the traditional consumer/retailer engagement. Subscription creates a type of partnership, a different dimension that moves out of the typical transaction. Subscriptions are therefore not simply a replacement of the in-store experience but rather an enhancement to the way a brand can engage its customers. Physical stores will still play a vital role in offering the traditional retail experience, but it can also serve as the showroom for possible purchases that will not be fulfilled at your POS register but rather via the customers subscription. An example of a company that’s doing this right is Dollar Shave Club. This is one of the more well known examples in recent history. In 2012, Michael Dubin founded Dollar Shave Club in response to high priced razors to provide an alternative to what retailers kept locked up behind the counter. The model is simple, for a monthly fee, customers receive new blades shipped via mail right to their homes. Never concern yourself with dull razor blades again, because you always have new blades at your fingertips. To make a subscription work, you have to have reliable quality over time and an opportunity for customers to try it at the beginning of the subscription, before they commit to a longer term subscription. As long as these are in place it can make the life of the customer easier and pave the way to consistent sales. The numbers support a model that includes a subscription program for lower cost items that don’t require doing a “test drive” first, prior to making a purchasing decision. Subscriptions have skyrocketed in the last 5 years by over 100% growth, which opens up another method to drive sales and blossom into even higher levels of customer loyalty. Although subscriptions have taken off, there is still no replacement for trying out a product in person. This is where it is important to provide for customers an opportunity to experience the products in person, at a retail “brick and mortar” store. You can even marry the in store experience with the subscription, once the customer is comfortable with the product. This becomes increasingly more important the higher the price tag escalates. And just because most subscription boxes are online doesn’t mean they always have to be. A great way to stand out from your ecommerce competitors by allowing customers to try out the products or assemble their own boxes in-store.