Subscriptions shopping – look what’s on your doorstep

5

min read

Subscriptions shopping – look what’s on your doorstep

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Wherever you turn online, subscription shopping services are banging down the doors. Without ever leaving your sofa, you could sign up for regular consignments of delightful surprises, all tailored for your specific tastes and needs.

In the UK, this could be carefully curated deliveries of gourmet coffee, gourmet pasta, or gourmet-something-a-little-stronger. For the more down-to-earth, how about never running out of socks again?

No wonder this industry’s forecast to be worth £1 billion by 2022 (PDF). It’s been a big deal in the States for a while – where, according to Forbes, the number of people visiting subscription shopping websites grew by 800% between 2014 and 2017, leading to around 3,500 services. Research from McKinsey shows that by 2018, around 15% of US online shoppers had signed up for at least one service. Hardly surprising, when they can choose from beer and wine, contact lenses, cosmetics, meal kits, razors, underwear, sex toys, dog toys (don’t mix those last two up), PMS products, Scotch, Korean snacks, Grateful Dead-inspired fashion (no, really) or medicinal marijuana.

And now over a quarter (27%) of UK consumers have signed up to one of these services, say UK e-retail association IMRG.

Who’s buyin’?

These stay-at-home shoppers tend to be younger (over half of those aged 25-34 have at least one subscription, according to IMRG). They have high expectations of retailers: they want convenience, great customer service – and possibly a discount compared to buying this stuff the normal way. Plus, in a world where consumer choice is king, the endless options can get a little overwhelming. Lovingly packaged, expert selections are one way to ensure you’re getting the best of what’s out there.

So will subscription shopping solve all small retailers’ problems? Not yet. Asking customers to sign up for recurring purchases can make it harder to get that first sale. And even if they dip their toes in the water, churn rates are high for those failing to deliver an amazing end-to-end service.

Then there’s competition from the big boys. After all, they’ve already got money, inventory and customer relationships. So why shouldn’t Unilever, Starbucks or Sephora get into subscriptions?

So if you’re considering making doordrops a thing, ask yourself: Have you found a great niche? Are you committed to your customer experience? Do you have the expertise to curate beautiful boxes of products?

If yes to all those, maybe it’s time to explore this brave new world.

Food delivery

The case for looking after customers

Looking at the ins and outs of subscription shopping is a great reminder that there's no such thing as an original idea. The way these businesses sell their stuff might be disruptive and new, but their challenges and priorities remain the same.

One of the biggest challenges for subscription box services is customer churn. Customers sign up, hang around for a bit, and then drop away. When a business depends on people to keep buying for the foreseeable future, churn can be a big problem. But it’s not a new one – worries about keeping hold of customers are as old as commerce itself.

McKinsey found that nearly 40% of subscription shoppers cancel – and do so quickly. That’s a huge amount, and it’s similar across all types of boxes, whether they focus on topping up consumables, special members-only prices, or expertly-curated selections.

The solution? Customer loyalty. Persuading customers to stick around and keep giving you their hard-earned cash. The principles are simple: make a great first impression, then keep meeting or exceeding those expectations (that second bit’s the hard part).

Feedback feeds loyalty

That makes getting feedback vital. It doesn’t have to be complicated – you can use standard sites like Trustpilot, or go for a specific small-biz CRM supplier like Zoho, or Britrix 24. They even have free versions for the cost-conscious. The important bit is to listen out for praise or complaints, and – most importantly – act on both.

You might be wondering about loyalty schemes. They’re popular with customers, according to The Drum, and independent businesses can easily utilise existing platforms. Providers like swipii or loyalzoo will set up everything for you – so you could soon offer repeat customers points, or even cashback.

But the unchanging truth remains: take care of your customers. With Amazon same-day delivery, Netflix on demand, and customer service via Twitter, consumer expectations are higher than ever.

It’s not new or disruptive, but it’s not easy, either.

So, do subscription boxes herald the end of shopping as we know it? We say: unlikely. Not everything fits the subscription model. Lookin' at you Cheeseposties.

Words by
Li Webster

Li Webster is a freelance copywriter and editor based in London. She has written for the Institute of Physics, IKEA, the Royal Academy of Arts, and a number of leading publications.

Article updated on:
March 5, 2020

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