The internet has been a game changer in many ways and in many industries, one of the largest of which is retail. Before, if one wanted to open up a retail operation, they would have to obtain a brick and mortar shop or gain a presence in an existing mail order catalog service with a large subscriber-base. Now, there are so many more options available.
Amidst all this opportunity, one of the defining retail business models that has enhanced throughout the internet era is the subscription service. While this has always existed in some form, such as with magazines, the amount and variety of subscription services offered online is like nothing we’ve ever seen before. However, when you look to the major internet commerce trends that have arisen over the past decade, you start to get a sense of how and why the subscription trend took off.
First of all, the growth in subscription services is aligned with the internet ethos idea of “finding your tribe.” If there are 50,000 people scattered around the globe that are interested in what you do, it is possible now more than ever to reach close to each and every one of them. Once upon a time you would have had to put ads in dozens of regional press outlets in order to find your customer base, an expensive and time consuming proposition if you only can sell to a set number of people. Now you can find out what they have in common online—regardless of geographical location—and advertise to them that way. This means that niche markets are there for the taking.
The second reason is that with so much more choice now available to consumers, we are ever more keen for curation. So, if a service promises to send us the best beauty or culinary products once a month—and we don’t have to go out and spend any time seeking them out—it satisfies our need for newness with very little work output. And lastly, more than anything the internet age has brought with it a love of convenience. If we can automate and streamline digital tasks, why not do the same for real-life tasks, such as buying contact lenses or pet food? A subscription service is an analog kind of efficiency that mirrors our digital lives.
So what are the most prominent subscription services to crop up during the digital age? Here is a look at some of the leaders across market bases:
Birchbox: A leader among women who are into makeup and beauty trends, Birchbox sends a variety of samples to its users each month, usually of makeup or other beauty related products. Its appeal lies in the fact that it gives subscribers an opportunity to try new products without committing to buying a full-size item.
Dollar Shave Club: Recently acquired by Unilever for $1 billion, Dollar Shave Club delivers razors and other hair removal related products to subscribers monthly, eliminating the need to go to the pharmacy to constantly buy these products. The company promises that this is both more cost-effective and convenient than the major retail chains.
FitFabFun: Focusing on wellness, beauty, and fashion trends, FitFabFun offers full-size products to its subscribers once a month. With a slightly higher price point than other subscription services, this company has managed to prove that people are willing to spend more than a few bucks on this business model.
Graze: For devoted snackers there is Graze, a company which delivers a custom-tailored box of snacks to subscribers based on their preferences. The emphasis is on healthy and “whole” foods, but customers list their preferences in an online form to ensure they can both try new things and be sent the kinds of flavor combinations they usually enjoy.
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