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Birchbox, Stitch Fix, these are some of the names of subscription services that was the trend back in 2013. This e-commerce subscription model consisted of paying a monthly fee for different products to be delivered to your doorstep.
However, recently these subscriptions face challenges for consumers as once you join the membership it’s tough to get out, resulting in recurring credit card fees after you’ve cancelled your order.
In my opinion, these subscription box services are a hit and miss depending on the consumers. These boxes come with a variety of different samples thus each month the products delivered to the consumer could be favourable or have the opposite effect.
This service quickly grew because consumers were constantly eager to try new products but after a short time period consumers stopped buying the products after they’ve got the chance to try them out.
These firms should adapt to differentiation in order for their products to appeal to customers to an extent that they would be willing to pay for a monthly subscription creating customer loyalty. Subscriptions are powerful, but it all depends on how firms decide to differentiate their brand. Providing products that can’t be purchased anywhere else or services with strong customer service such as “Netflix” will result in more subscriptions for the firm. As Birchbox stated, building stronger relationships with their consumers has the potential to be translated into increased revenue. Thus they should aim to interact more with their consumers to learn what kinds of product they want in their subscription, helping them create a close relationship with they buyers.
Sources:
http://www.businessinsider.com/the-pros-and-cons-of-subscription-models-2015-9
https://blog.compete.com/2014/03/31/subscription-services-ecommerce/