The Washington Post has a story about how “subscriptions boomed during the coronavirus pandemic as Americans largely stuck in shutdown mode flocked to digital entertainment and signed up for regular home delivery of boxes of items such as clothes and chocolate. But what really set the past year apart was the increase in subscriptions in the hard-hit services sector. Owners of restaurants, hotels, home-repair companies and others upended their traditional business models to try subscriptions and often found more interest — and revenue — than they anticipated.”
The Post notes that “the subscription economy was on the rise before the pandemic, but its wider and deeper reach in nearly every industry is expected to last, even after the pandemic subsides in the United States. The UBS financial services firm predicts that this ‘subscription economy’ will grow to $1.5 trillion by 2025, more than double the $650 billion it’s estimated to be worth now.”
The story notes that “Subscriptions are not a new concept. The idea of paying a recurring fee for a farm share or a wine -of-the-month club has been around for decades, but analysts say the rise of smartphones and rapid home delivery in the past decade have made customers increasingly willing to try new products and shop in different ways.”
“We are shifting from a transactional economy to a relationship-driven one,” said Adam Levinter, author of ‘The Subscription Boom,’ tells the Post. “A subscription is a recurring touch point with the customer. It’s that constant reminder that people have a relationship with the brand.”
Subscriptions and auto-replenishment – which, to my thinking, is the next best evolution from subscriptions – are ways that businesses can create stronger and more sustained relationships with their shoppers – the data is consistent and accessible, and provides ways for retailers to build on an established foundation.
If I were a retailer, I’d be looking for any way possible to make these concepts work for me.
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