Subscription Commerce: The 12 Months of Christmas
As we study the incredible rise of the subscription box business model, it’s clear that this holiday season will be vastly different than those in recent years. For all of us that have a romantic vision of Christmas morning and finely wrapped gift boxes under the tree, we could be in line for a rude awakening. Today’s consumer has adopted the concept of subscribing to products and services, ranging from clothing to coffee and meal plans, as a way to reduce the overall stress of the retail experience. As such, we believe that this year’s list of most wanted gifts will read like most wanted subscriptions.
Everywhere we turn these days, consumers are subscribing in record numbers to offers as an alternative to traveling to stores to purchase products. The idea that these high-quality branded products can be delivered direct to our doorstep is transformative. Subscription marketers have become very smart about the way they engage subscribers, providing easy ways for recipients to modify their subscriptions from a product mix and delivery timing standpoint. Today’s consumer doesn’t feel “locked in” to something that they have subscribed to with no chance of alteration or adjustment.
What better gift to provide friends and relatives than their favorite product or service delivered on a monthly basis for a FULL year! Every month when the shipment arrives, they're reminded of your great love. As we see a rise in the number of subscription boxes delivered and subscribers generated, it’s clear that the first casualty in gift giving this year will be the “gift card.” This gifting unit will be seen as a stepchild of the much “richer” gift subscription to a monthly product or service. Gift cards are a nice token, whereas subscription services are the gift that keeps giving throughout the year.
The intensity of marketing gift box subscriptions will only intensify during the last-minute holiday shopping weeks and days. Many of us feel guilty that we've shopped late for those we care about, and as a result tend to go overboard. There's no better gift than a subscription box program for that loved one, easily purchased and wrapped in great value and consideration for the recipient.
The idea that the late shopper needs to run to the mall on Christmas Eve is over. That shopper can look like a hero to all on his/her list by providing them with the most relevant subscription available this holiday season. Tom gets a monthly wine subscription, Sally gets her favorite coffee subscription, Jim gets his own clothing advisor who sends garments each month. Smiles for everyone.
Those who are set up for coal in their stockings this year will be brick-and-mortar retailers, especially those paying expensive leases to mall landlords. E-commerce is experiencing another explosive year of growth, and purchasing patterns among the sweet spot consumer segments — millennials, Gen X, Y and Z — have changed dramatically. It’s no longer fun or productive to battle traffic and limited parking to wait on line to check out in a mall anchor store. Not when in the comfort of your own home you can purchase the full range of gifts from individual items to subscription services. Brick-and-mortar retailers are going to suffer because of this changing dynamic.
In the past, many would say that the success of retail was all about location, location, location. Not so much these days. In the retail world today, success is all about marketing, marketing, marketing. It remains to be seen if small and large businesses can package their offerings (whether that's real-time shipping and/or subscription services) to engage consumers in a more personal and relevant manner. The consumer has demonstrated a real affinity to brands that provide services that make life easier for themselves and their families. Can brick-and-mortar retailers pivot their positioning and offerings to take advantage of this shift in consumer preferences? There are no signs as of yet that they can.
In January when all of the data is compiled and analyzed, researchers smarter than me will try to make sense of all of the information to provide recommendations in the New Year. Of this I'm sure. Many will have written their letters and/or sat on Santa’s lap with the now familiar refrain … ALL I want for Christmas this year is a subscription box.
Jim Fosina is the founder and CEO of Fosina Marketing Group, a subscription marketing firm that works with major companies including Gwynnie Bee, Kraft, Disney and Hearst.