Five ways retailers are innovating through the subscription model

Five ways retailers are innovating through the subscription model
Retailers, both online and traditional stores, are using the subscription model to increase revenues and establish long-term customer relationships. Shashank Venkat examines a study which details some of the ways in which businesses in the retail industry are innovating with the subscription model

The retail industry has found new wings with the subscription business model. While online merchants have leveraged the model for a few years now, many bricks-and-mortar stores are also finding ways to tap into subscriptions. A new PYMNTS report indicates that subscriptions have increased customer loyalty by 55% for retailers. About 50% of retailers surveyed in the study pointed to improved revenue predictability whilst two-thirds of the respondents reported higher revenues.

Here are five ways retailers are innovating through subscription models in both the online and physical world:

Products and services galore - Nowadays, you can get a subscription service for almost anything. In fact, Bloomberg even wrote an article on outsourcing life to subscriptions! Retailers are finding ways to sell the smallest of things through subscriptions. Apart from the usual suspects such as clothes and groceries, there are subscription boxes for hobbies and passions, flowers, ‘vegan’ beauty boxes and even undies!

Personalised solutions for subscribers – A lot of retailers are now using subscription models to provide customised solutions for their customers. For instance, US-based health and wellness retailer The Vitamin Shoppe, offers an online assessment to their customers and provides a custom assortment of supplements and vitamins through subscriptions. Bookabuy is another interesting book subscription service from Australia which offers a personalised reading journey to subscribers. The books are tailored to the unique preferences of the readers. The company offers both monthly and fixed-term subscriptions.  

Innovation in delivery – Retail giant Walmart has started an innovative grocery delivery subscription service called InHome. Shoppers need to buy a smart lock or garage door kit, which come with free installation and a free month of unlimited deliveries. The smart lock operates with technology that creates a one-time access code for the delivery. Rival Amazon is not far behind with its similar Key in-garage delivery service for Prime subscribers.

Subscriptions as a discovery tool - Retail innovators are also using subscriptions as a discovery tool for customers. For instance, Free Your Tea’s base plan sends a sample of six different teas after sign-up (in addition to the regular supply of tea) and then asks subscribers to rate them. Based on user ratings, the company brings in the personalisation aspect to supply new flavours of tea from the next month onwards. In fact, the whole subscription box industry is based on the premise of discovery and surprise. Many companies have perfected the art of sending a subscription box like a present to their subscribers, and that keeps customers hooked on these services.

Subscriptions “in the future” – The traditional way of thinking about subscriptions is gaining immediate access to a product or service. However, companies such as Wanderift are turning this phenomenon on its head by offering subscriptions for services that kick in only in the future. The travel company allows subscribers to pay a monthly recurring fee in exchange for tokens, which you can think of like credits. Their customers can then save around 30% if they book their flights through the Wanderift credits.

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