The Age of Subscriptions

//The Age of Subscriptions

The Age of Subscriptions

With Disney’s new streaming service Disney+ set to launch across the world in the coming months, it prepares to join the already long list of subscription based streaming services available. Streaming however is not the only crowded subscription market and these days it seems there’s an infinite number of brands eager to have us sign up. They range from gaming services such as UPlay+ and Humble Bundle all the way to shaving subscriptions such as Billie and Harry’s. There are food subscriptions, make-up subscriptions, stationary subscriptions even one that delivers washing capsules to your door called Smol.

So why is it that ‘subscriptions’ have become so popular amongst brands?

One reason for the popularity is that they are a new way to sell existing products to consumers. What’s on offer already exists – films, razors and food for example but with subscriptions there is the element of variety and surprise. In the time of one click delivery a consumer that knows what they want can get it instantly but subscriptions cater for those that don’t. Not sure what to watch? Have a browse through Netflix. Would like to try new make-up but don’t want to scrawl through reviews? Check out what’s in this month’s Birchbox. Subscriptions create excitement around a product that a consumer may otherwise find mundane or may not have even discovered.

Another reason for their growth is convenience. Certain subscriptions rely on selling products that consumers buy regularly and deliver these to their door stopping double trips to the supermarket or even stopping the trips altogether. Often these kinds of subscriptions will, along with convenience, advertise a saving in price by having it delivered – Harry’s state an average saving of £1.09 per blade in a five blade cartridge.

Subscriptions have also grown through their ability to work with technology and be mass customized. A perfect example is the food delivery service Gousto.  Through an app, the consumer selects, from a range of meals, the ones they would like delivered to their door that week, fortnight or month on a day of their choosing. It is a recurring subscription but the user can cancel each box if there is nothing they want or even pause it altogether.  It shows variety, surprise, convenience, customisation and is working with technology. To further boost their sales they also collaborate with other brands and celebrities to bolster their standing as delivering all of the above things.

Brands however do not always deliver a subscription service in an easy and convenient way. Those that do not deliver a product especially such as streaming services or memberships can often be forgotten about and become a recurring income for a company that the consumer does not even realise they are paying. A recent example of this would be the Savage X Fenty membership fee which allowed customers to purchase products at a discounted price but was automatically added to customer carts and purchased without them realising. Stopping it is also not easy as although unused membership can be rolled over as store credit the membership itself can only be cancelled over the phone.

What does this mean then for a new or small business that may be considering offering a subscription service?

Firstly, is it really the best way for your business to retain customers? If a product is unique enough it’s likely that a subscription is not needed as you are already offering what the customer wants. Secondly can you offer it in a convenient way? A service that causes more frustration than ease will lose more customers than it retains. Lastly, do you have a back-up? Offering subscriptions only for an unestablished business can be risky as they don’t last forever, eventually they get cancelled so offering your products in another way such as direct sales or one off purchases is a good idea.

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By |2019-10-28T11:05:26+00:00October 28th, 2019|Blog|0 Comments

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