Subscription services are taking over retail.
Birchbox, Carnivore Club, Dollar Shave Club, Stitch Fix — simply pay a monthly fee and you have products ranging from makeup to meat delivered to your doorstep.
But are subscription services all they are cracked up to be?
Online Subscription Services: Pros & Cons
Subscription Services Pros
Predictability
For one thing, subscription services are predictable. A customer becomes a customer and the trajectory of their revenue is easier to calculate than other products. It’s simply easier to know what costs to expect, and what future income will be. Regular shipping costs and destinations are more predictable too, which lends itself to more easily predicting warehousing staff needs.
Frequency
When a customer receives a product once a month, they are more likely to pass along information about the service to friends and family, without having to create social signals—the greater the frequency, the more likely this will happen.
Lower retention
Consumers don’t need to be “brought back”—they’re already prepared to purchase from you once a month, so there’s less of a need for lead generation, social signals, email, and so on, which saves on cost.
Subscription Services Cons
Stagnation
If the box isn’t closely tailored to the consumer’s needs, they’re more likely to opt out of the service, and it can be very challenging to bring those customers back into the loop again. Some subscription box services don’t seem to aim for as much variation as others, so a customer looking for brand new products every month might be disappointed by what they receive.
Competition
Subscription services are popping up all over the place. It’s crucial to uncover what niche hasn’t been a part of the subscription box model—the potential for over saturation is much higher, so you might be entering a much more competitive market.
Uncertainty
Everyone’s forgetful—as a customer, there’s always a chance that you might forget to cancel your subscription service if you decide you’re not really a fan of the product. Then you’re probably not as thrilled with the company who sold it to you, and less likely to recommend subscription services to someone else.
If you’re interested in fulfillment services, did you know that Christopher Morgan provides fulfillment? Subscription boxes can be exciting, and they work well when the customer is matched well to the product. And of course, keeping the pros and cons of subscription box services in mind can help strike a balance between keeping your items original and interesting, and making your subscription box tailored to the customer.
