Subscribing our lives25 Aug
Will Dawson, a Manager at LCP, who specialises in retail supply chains, assesses some of the new home delivery subscription services emerging – with everything from Coffee to Socks on offer, how will this developing service proposition evolve?
With bricks and mortar retailers struggling with footfall and ecommerce being the easier option for the time poor customer, subscription services are emerging to make the move online even easier and more personal. Mail order services have been around for years, some with a subscription element, such as contact lenses or magazines, but replacing a previously physical shopping experience with a digital one is the new growth area. Many services are focused on specific markets such as food boxes, clothing, or children’s toys. Others focus on specific items such as coffee, razors, or socks. All of them trying something different than the traditional click and buy setup.
One of the major factors for the increase in online shopping is that consumers are becoming increasingly time poor. Why make a special trip out when you can have it delivered in the comfort of your own home? While customers may want to have convenience, they also want variety and perhaps the idea of something exciting and new. Removing the time to browse and purchase, but giving customers something different, that you know they will like, offers that something extra and makes the customer greatly value the service.
Services like Abel and Cole and Gusto provide individuals with cooking boxes. The customer can the enjoy the cathartic experience of cooking without the hassle of going shopping with a specific long list of ingredients to buy.
One of the main draws is the bespoke element you can get with these services. Looking especially at the ‘fashion box’ market, they review your current wardrobe and put together completely new outfits, or ones that will complement your existing clothes. This level of personal shopping has previously only been available face to face in a store, but now this service is available to anyone from anywhere.
Direct to customer
For some of these services, the products come straight from the producer. Gillette Club and Paul Smith Sock Club are two prime examples of a producer accessing the previously bricks and mortar retail driven market. Cutting out the retailers allowed the producers to make significantly more margin than before, and for the customer it strengthens the brand loyalty.
Proliferation of home delivery
One of the main enablers is the universal improvement in the home delivery service. Ten years ago, parcel deliveries were inconvenient, erratic and usually ended in a trip to the depot, but now with tracking as standard, dropping prices and immediate notifications, consumers are increasingly utilising home delivery. This means that having these subscription service items home delivered will seem like less of a hassle and more accepted.
One thing to note is that almost all these subscription offers come at a premium to shopping yourself. Food boxes are at a higher price than the equivalent in the supermarket, clothing boxes are all at full retail price and the niche market will always command a premium. However, it seems that consumers are willing to pay for these services…
We are likely to see an increase in these services as they become more of an accepted way of shopping. Recent major movements in the market have seen Trunk Club acquired by Nordstrom and Amazon pushing out ‘Subscribe and save’ and ‘Prime Wardrobe’. Larger retailers are seeing value in these offers, but will consumers feel like they are receiving a bespoke offer from a retail behemoth, or just the result of an algorithm?
Will is a Manager with extensive experience in the areas of supply chain strategy, business operating models and logistics. Will enjoys specialising in big data insights, customer propositions and the home delivery market. He is also part of LCP’s growing retail team developing Omni-channel retail solutions, data and insights for many of the UK’s leading retailers.