Every week, we bring you the top stories and analyses from the global Subscription Economy.
Legacy retailers turn to subscription programs to hook loyal customers
Excerpts from an article by Suman Bhattacharyya in Digiday
Legacy retailers are taking a page from Amazon Prime by adding subscription services to lock in loyal customers.
In recent weeks, a number of players in the category, including Lululemon and CVS, have rolled out membership programs to build loyalty. The programs keep a retailer’s most valuable customers coming back regularly, while helping to counteract growing customer acquisition and retention costs as e-commerce platforms broaden product choices.
“It starts with the realization that the only way to survive is to have repeat customers,” said Corey Pierson, co-founder of predictive marketing analytics platform Custora. “For the longest time, [retail business] was very product-focused, as in how many shoes did you sell, but given Amazon’s growth and how easy it is for customers to do price comparisons, retailers are realizing that if [customers] don’t become repeat buyers, the economics of the business won’t work.”
Read the full article on Digiday
Changing consumer behavior is the key to unlocking billion-dollar businesses
Excerpts from an article by Jonathan Golden in TechCrunch
Truly transformative consumer products require a behavior shift. Think back to the early days of the internet. Plenty of people said they would never put their credit card credentials online. But they did, and that behavior shift allowed e-commerce to flourish, creating the likes of Amazon.
Fast-forward to the era when Myspace, Facebook and other social networks were starting out. Again, individuals would commonly say they would never put their real names or photos of themselves online. It required only one to two years before the shift took hold and the majority of the population created social media profiles. The next wave included sharing-economy companies like Airbnb, Lyft and Uber, prompting individuals to proclaim they would never stay in someone else’s home or get into their car. In short order, times changed and those behaviors are now so commonplace, these companies are transforming how people travel and move about the world.
One key benefit of a behavior-shifting product is that it commonly creates a new market where there is no viable competition. Even in cases where several innovative players crop up at the same time, they’re vying for market share in a far more favorable environment, not trying to unseat entrenched corporations. The opportunity then becomes enormous, as the innovators can capture the vast majority of the market.
Read the full article on TechCrunch
Apple Looking to Launch Magazine Subscriptions in Early 2019
Excerpts from an article by Janko Roettgers in Variety
Apple is preparing to relaunch Texture, a news subscription app it acquired in March, as a premium tier of Apple News early next year, according to a Bloomberg report. To prepare for the launch, Apple has been trying to get prominent newspapers including the New York Times and the Wall Street Journal to come on board.
However, Apple’s advances have been met with hesitation by the industry, according to Bloomberg. One of the concerns is that Apple’s flat pricing model may undercut publishers’ own online subscription efforts, effectively luring paying audiences away from the Times and others.
Texture currently offers unlimited access to some 200 magazines, including Vanity Fair, GQ and Wired, for $9.99 a month. The app presents articles in a look similar to that of the original magazine, promising subscribers to read magazines “cover to cover.”
Read the full article on Variety