Subscription Economy News – Week of 8/19/2019

By Stephanie Li August 29, 2019

Every week, we bring you the top stories and analyses from the global Subscription Economy.

Fender initiates wellness partnership strategy with Zappos to promote workplace guitar playing

Excerpts from an article by Kyle O’Brien on The Drum. 

Fender, the legendary guitar-maker, has joined forces with online shoe and clothing retailer Zappos.com in an effort to engage with new guitar players and to promote wellness to the retailer’s staff, the first partnership in a potential line of pairings.

Through the ‘Strum for the Sole’ program, a first-of-its-kind wellness benefit that promotes a work-life balance through the power of music learning, Zappos employees will have the opportunity to learn an instrument using Fender Play, a digital learning app for guitar, bass and ukulele, as a means to reduce stress, promote increased creativity, self-expression and confidence, among other benefits.

Fender hopes the pilot will not only benefit Zappos employees and make them lifelong guitar players and devotees to the brand, but also will help raise awareness of Fender Play and make the program a major online music education destination.

For more, read the full article on The Drum. 

And for more insights on Fender’s subscription business, read Fender: Reinventing Guitar For The Digital Age

Fitbit pushes beyond hardware with new subscription service

Excerpts from an article by Kaya Yurieff on CNN Business. 

Fitbit has announced a new subscription offering called Fitbit Premium, which promises users access to more in-depth insights about their sleep, fitness and overall health. Among other features, the premium service will include thousands of workouts and a health report you can give your doctor at your annual physical. It will even offer personalized health insights, such as noting whether your resting heart rate went down because you increased your step count.

Fitbit Premium will launch in September and costs $9.99 per month or $79.99 per year. Fitbit is also working on a paid service that lets users chat with a certified health and wellness coach to tackle goals such as weight loss or managing diabetes. The coaching service will launch in 2020.

At a press event ahead of the launch, Fitbit CEO James Park said the subscription service is part of a “transformation” of its business model. Where it once relied on convincing customers to buy one new device after another, Fitbit now hopes to hold on to its customers with premium services and build “a long-term, beneficial relationship” with them.

Subscription services could help build “more predictable, recurring revenue streams,” as Park told investors in the company’s most recent earnings report.

Read the full article on CNN Business. 

Porsche expands on-demand subscription plans to four more cities

Excerpts from an article by Kirsten Korosec in TechCrunch. 

Porsche  is expanding two on-demand subscription programs to several more U.S. cities and into Canada. The German automaker announced Thursday it will expand to Las Vegas, Phoenix,  San Diego, and Toronto its monthly subscription program Porsche Passport and its shorter-term Porsche Drive plan. Both programs will continue to be offered in Atlanta through local dealers.

The expansion suggests that Porsche’s experimentation with subscriptions has attracted enough new customers to warrant taking it on the road. Porsche created the programs because consumers increasingly want more flexibility, more individual choice and to have this on their mobile devices, Porsche North America president and CEO Klaus Zellmer said in the announcement. The goal is to build a new customer base of Porsche owners. Zellmer’s comments suggest that the programs are having the desired effect.

“This innovative approach to the Porsche experience has already opened the door to an entirely new clientele,” Zellmer said. “In our first year and a half, more than 80% of Passport members in the Atlanta pilot were not previous Porsche owners.”

Read the full article in TechCrunch. And learn how Zuora helps automotive companies launch new subscription services here.

Hudson’s Bay to sell Lord & Taylor

Excerpts from an article by Lauren Hirsch on CNBC. 

Hudson’s Bay Company is selling Lord & Taylor to clothing rental subscription service Le Tote for $100 million.

Under the deal, Le Tote will acquire Lord & Taylor’s brand and intellectual property and assume operations of 38 stores, its digital channels and its inventory. Le Tote, a rental service founded 2012 that allows subscribers to rent clothes for $79 monthly, has plans to reinvent Lord & Taylor, said its founder, Brett Northart.

Le Tote plans to personalize and expand Lord & Taylor’s offerings beyond the dresses for which the department store has been historically known. One of those services will be Le Tote’s core business: rental.

Le Tote will look to use data and infrastructure from its rental business to personalize the Lord & Taylor shopping experience, said Northart.

Read the full article on CNBC. 

Amazon just announced a new way to make money from its home Wi-Fi business: Subscriptions

Excerpts from an article by Todd Haselton on CNBC. 

Amazon on Tuesday introduced two new subscription offerings for Eero that will help owners of the mesh Wi-Fi networking system keep their home networks more secure. It also shows how Amazon will continue to make money off of Eero, which it acquired earlier this year.

Eero, if you’re unfamiliar, helps provide better Wi-Fi coverage around your home using mesh networking technology. Instead of relying on one Wi-Fi hotspot in one area, multiple units are placed around your house to give you better coverage no matter where you are.

The new features include Eero Secure and Eero Secure+, the latter of which used to be called simply “Eero Plus.” Eero secure tracks your browsing and can warn you if you’re visiting potentially malicious sites that might be infected with malware or have been known to phish for private information. It also comes with parental controls.

Eero Secure will cost $2.99 per month or $29.99 per year and Eero Secure+ costs $9.99 per month or $99.99 per year.

Read the full article on CNBC. 

Can ‘Clothing-as-a-Service’ fashion a future for retail in a Subscription Economy?

Excerpts from an article by Stuart Lauchlan on Diginomica. 

When looking at last week’s announcement of pilot schemes in selling second-hand clothes at Macy’s and JC Penney, I observed that there was a more interesting move by the former in its intention to trial a digitally-enabled fashion rental offering.

Whatever the outcome of those trials, the concept of Clothing-as-a-Service (CaaS) is one that’s being looked at with considerable interest by a number of major brands as a way to disrupt the retail business model and tap into the budgets of fickle consumers.

The business model is one that was pioneered by such as Rent The Runway back in 2009, whose founders Jennifer Hyman and Jennifer Fleiss set out to create “a closet in the cloud” for women like themselves. Rent The Runway is an aggregator with products from over 400 fashion brands to choose from. But such is the appeal of this Subscription Economy business model that individual retailers are now making their own moves to offer their own dedicated services.

For more, read the full article on Diginomica. And check out Zuora Tien Tzuo’s commentary in When Will Retail Fight Back?

And for more Subscription Economy resources and events, head to www.subscribed.com