By Dennis Hung • July 21, 2018•Careers, Other Career Issues
Over the years, the subscription industry has been experiencing rapid growth since more people are frequenting their websites. The subscription business has been in existence since the old days where our forefathers had their coal and milk delivered on their doorsteps. However, recently the business has adopted various media and technology companies. The industry has relied on the wave of high consumer’s online thirst. However, the tides don’t seem to fall; not now.
The subscription businesses are companies that deliver to you a package, usually after an agreed duration of time, of products that they have chosen for you. An Example of this type of business is Birchbox and Ipsy that do sell beauty products to women, Home Chef and Blue Apron delivers cooking ingredients, and Dollar Shave Club that delivers shaving products for men. The biggest success of this type of business has not been on the product being sold, but on how they sell the product.
Subscriptions are becoming increasingly a common way of purchasing products and services online. According to a survey that was conducted by McKinsey group, about 46% of the consumers interviewed subscribed to certain media-service. More consumers are now subscribing on consumer goods. The survey further reveals that about 15% of online shoppers have active subscriptions over the past year. Those who are engaged with a subscription are mostly young urbanites who are working and with incomes of about $50,000 to $100000.
The subscription business is driving the market more than ever because of technology. Nowadays, almost everyone living in the United States has access to internet service; hence this has made it easier to connect with clients. The stakeholders have adapted to mobile faster than other retailers and this has placed them on top of their game. Technology has facilitated the growth of subscription industry by acting as a catalyst. The use of technology in this subscription business is a reflection of the clients’ base it’s commanding. The use of technology in this business model has also made it convenient and reliable to use. It’s convenient as the client does not need to go to the shops every month to purchase the product. This has made the subscription business more popular.
Tastes and Preferences
The change of retailers taste can also be the reason why the subscription business is taking over the markets by a storm. Giving the consumers what they are looking for is not always important because they do know where to find it. To make the clients happy and excited, you have to include the element of surprise. During an interview with Forbes, Nadia Boujarwah the Co-Founder of Dia &Co argued that when conducting e-commerce, what is lost is mostly the personalization and not the person. She further stated that for an investor to succeed in the business, he or she should invest in the emotional arc of the customer’s experience. Clients do fall in love in products that have emotional benefits.
Subscription businesses have relied on technology to understand what the client is looking for and how soon it can be delivered to them. One of the secrets to as why this business is flourishing is because they are engaging in personalization. They ask for more information from their clients and this is something their retail competitors have failed to do since time immemorial. Not only do they listen to the clients, but also they act swiftly on client’s requests.
Most clients will tend to provide more information hoping to get a better experience. In case a client provides wrong information the company can do data cleansing and correct errors such as the address and contacts of the client. Successful subscription business has adapted and personalized boxes for an individual client they have. When a company makes a subscription box that has more surprise, they can sell the product for long as long as the client maintains the interest.