2013.35 | subscription retail

closet-sciSubscriptions represent both a valuable service to consumers as well as a valuable retail sales opportunity.

Instead of selling a single item with a single sale, subscriptions allow for an ongoing revenue stream from that same sales effort.  Amazon has offered Subscribe and Save for regularly consumed items like toothpaste, cereal, razor blades, and diapers for some time.  Combined with Amazon Prime with its unlimited free shipping, Amazon presents a formidable offering of ease of purchase and the convenience of not having to buy staples on an ongoing basis.

While these subscription offers were primarily a concern for food and drug retailers in the past, subscription services for specialty and apparel items are becoming increasingly common. Here are just a few representative offerings:

Bonobos recently released Closet Science.  Prospective clients receive an email with a link to an entertaining questionnaire about their lifestyles that drive a style profile.  Based on the established profile and opting in to price range options, customers are AUTOMATICALLY sent a new outfit of shirt and pants each month.

Manpacks exists to allow men to avoid the oft ignored ritual of purchasing new socks and underwear on a regular basis.  Users register online with their preferences and receive regularly scheduled shipments of socks, underwear and other personal sundries.

hunt-club

Birchbox is a product discovery service that provides a monthly subscription service of cosmetic and other samples to registered users.    The service costs $10 for women and $20 for men.  Users can opt in to purchase items based on their favourite discoveries from the subscription service. (thanks Greg!)

Frank & Oak offers the Hunt Club.  Join and you get a “crate” every month of three items try.  Clients select their items by a certain date each month and the items that are sent to them in their crate.  Clients can buy them or send them back if they don’t work out.

This business structure is both a threat and an opportunity for retailers with actual stores. With the right infrastructure in place, competitive challenges like this can be addressed swiftly and advantages that online retailers do not have can be leveraged. Some strategies to address subscriptions include:

  • In low velocity and interactive retail sales areas of stores, enable simple subscriptions for items such as cosmetics. These offers can be enabled with currently available Offer Management solutions by enabling either a recurring offer or associate message for specific types of items once they have been purchased once. Ensure that the customer can opt out, and cashiers can note the client preference if they do not want an ongoing reminder or purchase. Retailers with both online and store presence could enable an automatic online shipping order
  • Let store staff provide the human touch to transactions by leveraging a clienteling solution to make recommendations to suit customer taste. Leverage current web based implementations of wish lists, social media, and web based recommendation engines on associate tablets. Web sites have to guess what consumers want, but your people can suggest and verify with them in real time.
  • Sizing is so important and a tremendous challenge for apparel. A great deal of profit in online retailing is lost to free returns as consumers uncertain of the right size for their frame enter online orders with multiple sizes of the same items and return non-fitting items at no charge. Leverage store staff knowledge of product to help clients get the right fit in store and help them translate fit to other lines or seasons of products. Clients could visit the store to try on their monthly outfit to ensure it fits and adjust their order in stores as needed if the fit or drape is not right. Capture information on sizes for clients and on product types and update the clients’ profile for future notice.
  • Enable simple checkouts on tablets – allow untethering from checkstands to talk to clients on the store floor. No scanning is necessary with the right solution, and a credit card on file from the website could be used to process charges. It’s important to emulate the simple transactions enacted on websites with the press of a button as much as possible to remove any friction from transactions.
  • Establish subscription services that provide the best of both online and store environments. Department stores are not limited by brands or products and could offer an array of subscription services by segments with clubs for each. Specialty retailers could offer in-store pickup of a monthly package or in store return for items that don’t suit.
  • Ensure that customer data is gathered centrally and made available for use by all stores, departments and organizations. That data is not just about marketing. It’s not just for eCommerce. The data needs to be accessible by operational store systems at every client and associate touchpoint so that it can be used to sell. With a central repository of information, all parts of the organization can be responsive to clients and corporate marketing initiatives by changing operational touchpoints, sales efforts and more for this challenge, but for all future competitive challenges. Consider a very simple example. With subscription based services in place with thousands of customers opted in, buyers could get a new perspective on how much of certain sizes to purchase based on the subscription base.

While subscriptions are certainly a threat to traditional retailers, with the right tools, and some well thought out strategy, it is possible to enable the same features that make those services so great and augment them with the best of personal interactions.  Take advantage of new trends and consumers and retailers alike reap the benefits.

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2009.06 | Linkedin | Consistency | Think Different

Linkedin is Useful – Social networking isn’t just about showing off how many friends you have..well,actually yes it is, but Linkedin also has a very useful Companies feature that shows most popular contacts, new hires and career paths for each organization. Beyond a way of seeing where your friends move, it’s a great tool to obtain up to date information about the best contacts for new ideas, and a way for vendors and buyers to avoid cold calls.

A Consistent Customer Experience – The importance of a consistent experience and brand across channels is becoming increasingly important in Canada. With point of service already well established, the internet and mobile channels continue to grow. For the first time a majority of Canadians bank online – 53% in Q4 2008 – 35% of them use the Internet as their primary channel, followed by ATMs at 28% and in person transactions at 24%.

While retail probably will not go that far, 53% demands attention from retailers, and habit and comfort with these channels is likely to drive consumers towards them for retail as well. As digital natives age, they will demand it. 84% of Canadians now use the internet, and broadband subscribers continue to grow with 27.9 broadband subscribers per 100 inhabitants; making Canada the leader in the G7.

More surprising is the opportunity around mobile. Only 61.6% of Canadians have a mobile phone – the lowest of any developed country. This represents a market of 20 million people that is only going to grow and become increasingly sophisticated as smart phones permeate the market. NCR is well placed to help our clients serve these customers across all channels with solutions like SelfServ Checkout, Advanced Marketing, and Mobile Refactoring and can provide some insight into the benefits of this multi-channel consistency.

Think Different – New ideas in today’s economy is what is needed to weather the storm. Simple changes always seem obvious after the fact, but are more difficult to pinpoint than you think. A few standouts include: rethinking the cereal box, shelf moving robots, mobile reviews, RFID ad activation, subscribing to consumable products and the $300 million button. Simple.

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