Today’s buyers are increasingly seeking shopping that is tailored to their preferences and delivered directly to their doors. The confluence of the trends has resulted in the emergence of subscription eCommerce; businesses that curate products and ship them to customers on a regular basis.
From shaving to vitamins, consumers worldwide are happy to pay a monthly fee to make their lives easier. The latest figures show that 15% of online shoppers have signed up for one or more subscription to receive products on a recurring basis.
The Subscription Box Model
As we’re heading into 2019, the direct-to-consumer (D2C) route is no longer a novelty. Some of the earliest industries to be disrupted by D2C brands are the beauty, health and wellness. But sectors such as food and drink are also beginning to notice the impact of subscription models as consumers are increasingly choosing convenience over retail.
So as eCommerce overtakes retail, the rate of innovation and the range of choice are ramping up.
Who’s Doing it Well?
Dollar Shave Club in the US and Amazon Subscribe & Save in the UK are two of the most successful and well-known subscriptions of the D2C model. Shortly behind follow other popular subscription brands such as Birchbox and Hello Fresh.
In a loyalty-driven world, owning and maintaining a direct relationship with consumers and customer has become incremental.
The US economy has been benefiting from this model for several years now. US’s subscription economy has increased by more than 100% a year since 2014. And with the largest retailers in the US generation more $2.6B in subscription sales in 2016, it comes as no surprise that businesses in the UK are no starting to pay attention.
The beauty of the subscription eCommerce market is that it’s not a business model exclusive to large companies. Its ability to provide guaranteed revenue every month is particularly attractive to start-up and SMEs looking for a sharp growth.
Subscription Box Fulfilment
A quality box of personally-selected products is part of the reasons why customers are attracted to this model of eCommerce. It is also the main reason why subscription box providers continue with in-house fulfilment despite operational challenges.
When selecting a fulfilment partner, make sure you check that they have have a proven track record in subscription box fulfilment, like Dimensions. It is also important to find out whether the partner you choose can manage your fulfilment requirements across all online sale channels and marketplaces.
Integration of eCommerce technology with the fulfilment process is just as critical to quality assurance as the physical packing and handling of subscription boxes.
For example, at Dimensions we have developed a bespoke software that makes integration between subscription sales channels and our internal order management system (3PL Central) fast and straight-forward. 3PL Central helps us provide accurate, real time and traceable data about which items have been sent to which customer (and when). It also shows personalisation of subscription boxes that enables product selection aligned to customers’ specified preferences.
A good third party logistics provider will ensure that all the data required to send the right items to the right customer at the right time is embedded in the process. They will also provide a safeguard against any boxes being issued to a customer who has cancelled their subscription. And finally, they will be able to provide you with a dedicated account manager who will ensure that your boxes are consistently fulfilled to your standards.
The Bottom Line
Despite its many benefits, this model is not to be underestimated as it is hard to scale and maintain. A fulfilment specialist is able to cater for any bespoke wrapping or packing requirements, even if the subscription box contains perishable food items or delicate products. Expert fulfilment partners, such as Dimensions are experienced in providing a white glove service along with a subscription box fulfilment service.
Technology, experienced warehouse staff and dedicated account managers are the enablers for third party fulfilment of subscription boxes.