By Jill Standish, Sr Managing Director of Retail at Accenture on ChainStoreAge.com
Just a few years ago, consumers typically associated subscription services with utilities and print media. Yet the rapid rise of digital technologies has led to an explosion in the number of services available, which cater to almost every aspect of consumers’ lives – from Spotify and Netflix to Birchbox and Blue Apron.
It’s easy to see why this business model makes sense for established retailers as well as start-ups. In addition to creating new revenue streams, chains can use subscription services to secure new consumer data. The insights gleaned from this data increase the lifetime value of each customer through cross-selling, targeted advertising, tailored offers and discounts.
A subscription service can also be an effective way of promoting new products – Sephora’s “Play!” box sends consumers deluxe sample-size cosmetics each month, plus a card offering a free in-store consultation on how to use each item.
So how can established retail chains respond to this seismic change – and become the disruptors, not the disrupted?
One option is to acquire or partner with existing subscription services. Leading retailers have much to gain from claiming their own share of the subscription economy. And yet, to be successful, there are some key principles that they need to get right first:
- Staying timely and reliable
- Innovating the unexpected
- Owning the new customer experience
- Customer-focused, technology driven
Read the full article on ChainStoreAge.