Retail Subscription Services Success: A Mystery Solved by Subbly
Retail subscription services were all the rage long before Netflix and the Dollar Shave Club — think of magazines, newspapers, and even telecommunication. With the rise of the Internet, the ever-growing desire to shop online, and the restrictions we faced during the lockdown, the retail subscription industry grew exponentially. But this is not the sole reason why this business model has become so popular with companies of various sizes.
After doing our research, we at Subbly discovered other factors why more and more businesses switch to or start providing retail subscription services. Here’s what we’ve found.
It Goes Both Ways
While the subscription model is a great solution for many companies to predict, plan, and secure their income, it offers many perks for the consumers as well. For instance, we can easily replenish the products in our pantries, stop calculating how much time has passed since we last changed the toothbrush, and be sure we’ll have the mobile data to connect with our dearest whenever we want.
That’s why we need to look at what makes the retail subscription services popular and valuable for both sides.
Why Is Retail Subscription So Popular with Businesses?
While there are different types of subscription businesses based on the product/survey they offer (replenishment, curation, access), the benefits of this business model are the same for every type. Let’s briefly review each.
Brings Your Company Recurring Revenue
Having a solid client base is one of the prerequisites of selling more products and ensuring a steady cash flow, particularly in the challenging times we’ve faced during the pandemic. As recent research shows, nearly 90% of retail subscription businesses either maintained or grew new memberships since the lockdown.
However, keeping clients spending their money on your products regularly is a challenge in a world where increasingly more companies add subscriptions to their options. A challenge until you develop and implement a working marketing strategy.
Makes Analytics Easier
Analytics is important to track how your business is doing and notice how your customers respond to the changes your brand introduces. And when it comes to subscription businesses, analytics can be used in so many ways without much effort. How so?
Subscription businesses use special software that allows tracking and reporting — and these features lie at the heart of the business model. The software records every client’s subscription form, shows how many clients have unsubscribed or how much money one client brings to your company over a certain period. All you need to do is choose the markers you’d like to study and the period, and you’re all set to make data-driven decisions for your company.
Allows Automating the Processes & Making It Autonomous
One of the appealing features of the subscription business model in retail is that you put the clients in charge of the decision-making process. Compare this: in-store shopping requires a salesperson to introduce the client to the products, present them, pack the goods, and cash out. During online purchase, the client is in charge of all these steps, except for packing and delivery.
For the business, this model means it will need to hire fewer people to do the tasks, which, consequently, will save operational costs. However, it also means that the business needs to empower its clients with the information and actions that would make the purchasing experience as easy and pleasant as it can be.
Keeps Your Clients Engaged
The variety of the subscription boxes made the clients extremely picky about who they’re ready to shop from, which adds extra work to your sales and marketing team. Unique offers, products, and brand values that resonate with the customers’ ones are a good start.
All these benefits get a lot of attention from startups and established brands. Now, why are retail subscriptions so popular with the clients?
Why Customers Love Subscription Services
You should never forget that subscription business success relies heavily on whether the company meets the needs and requests of its consumers. It also depends if your brand offers the best possible solution in its class. Yet, there are more things to consider. Make sure your retail subscription service:
Helps Them Save Time & Money
Most merchants offering subscription boxes can thrive without having a physical store. This allows them to offer lower prices. For the clients, it’s a perfect opportunity to get the needed products delivered to their door for less. In times when optimizing one’s routine is a must for focusing your productivity on what really matters, subscribing to goods from retailers seems like an optimal solution.
Frees Them from Making the Same Choices Over and Over
Food and grocery shopping is far from being the looking-forward-to experience for many consumers, which is why they subscribe to a monthly or weekly delivery of boxes with the items they choose. This automates their buying behavior and provides them with the comfort they need. Most importantly, it averts the anxiety associated with in-person shopping, and for those anxiety-prone, it’s indeed an important matter.
Allows Them to Get a Personalized Experience
Giving the clients freedom to get a customized box is a challenge for many retailers, but it can pay off very soon. Here’s how.
Imagine you sell only boxes with a definite list of groceries your clients get every month. There is a huge possibility that not all of them use, let’s say, flour very often, and when it keeps piling in the pantry, there’s a chance they’ll simply unsubscribe from the whole thing. Personalizing features can help in such cases, and progressive retail subscription companies have already introduced them.
Gives the Feeling of Certainty
We’ve all been in the situation when we run out of wine, Internet services, or mobile data at the most inappropriate moment, and we all know the stress associated with it. Subscription-based companies provide their customers not only with the products/services they pay for but also with the certainty they will have the necessary items delivered on time. This is particularly important to develop trust in the brand, which can go a long way.
Puts Them in Control of Their Spendings
Budget planning is a big thing for the modern generation, but it’s not possible without tracking your spendings first. Even though the tracking option isn’t a unique selling proposition (unless it’s a subscription-based software as a service, of course), it helps the consumers count and manage their money. Moreover, knowing that they need X dollars every month for particular goods allows them to see a bigger financial picture when it comes to long-term budget planning.
Now that we’ve covered why retail subscription services are popular with both providers and target audiences, let’s see what can make your subscription brand popular with the users.
Top factors that will define your brand’s popularity
Ready for your popularity checklist? Follow these principles, and you’ll be on your road to success in no time.
Good Value for Money
62% of respondents define it as the most important reason for signing up for any subscription-based company. This is a good caveat for startups in particular, as it shows that there should be a well-developed balance between the quality and the price, as well as detailed research of the target audience.
45% of respondents, however, consider the quality of the products as the main driving force for subscribing. And it’s particularly the product quality that can make people market your brand without your active participation.
Selling ready-made boxes is OK, but if you want to retain your clients, you should also allow them to make changes when they need to. Otherwise, they will simply change your brand for the one that has this feature.
Delivery is a part of the service your subscription-based company offers and promises, so any issues regarding that can impact your reputation. Put every effort into making sure clients receive their packages on time.
Opening your business to overseas clients isn’t only the way to expand — it’s also a great move for your brand. However, you can’t do it without opening a merchant account first. With international shipping, be ready to take into account the delivery time and taxes. When subscribers are warned about them in advance, they appreciate your concern.
Making purchases without compromising the safety of the financial data is a basic right. For those subscription services that offer autopay and billing renewals, this becomes even more important since we’re talking about storing financial data. Using a safe payment gateway is a solution to consider.
Unique Offers and Promotions
In any business, delivering more than expected strengthens the relationship with the brand, and the retail subscription market is no different. Referral programs, seasonal deals, or limited-time promos will keep the clients engaged with the brand and serve as a great marketing tool for upselling.
Adding new items to the list ensures dynamic brand growth, develops the client’s curiosity, and helps land new customers. But how do you market it if you’re a subscription business? Discounts alone might not be an option since the people aren’t willing to pay for what they haven’t tried. Here’s where offering samples might do a better job. For instance, Sephora gives two free samples with each order, so you can order a full-size product later and be happy about the purchase rather than spend money and get disappointed.
In times of the retail subscription services boom, clients search for merchants that provide the best value. Small things like loyalty rewards for orders, referrals, invitations, feedback, or review can become that difference the clients are looking for.
Easy and Pleasant Shopping Experience
Let’s be honest and realistic: the current market is a bad place to offer a mediocre shopping experience. The clients have some expectations based on their previous purchases from various brands, so maintaining a smooth shopping experience is the basis for every subscription company. And for that, you need software like Subbly.
The Bottom Line
Retail subscription services are great shopping alternatives for customers, as well as a promising business model for new and established companies. They help save time and money, make data-based decisions and market new items, keep the customers engaged and bank accounts growing.
And the best way to manage all that is by using tools like Subbly. We provide top-class subscription management software solutions to help your brand grow. Sign up for a free 14-day trial today and secure a better future for your company!