Is Subscription Commerce Right for Multi-Channel Retailers?

Subscribe Pro

August 30, 2016


Multi-channel retailers typically stock a diversified product offering, with the strategy of selling enough higher margin products quickly and more niche products over time. In today’s multimedia world, multichannel retailing simply makes sense, even for smaller retailers. The key is picking the right channel strategy that provides a good ROI over a long period of time. For instance, a smaller retailer that doesn’t have the purchasing power or marketing budget to support several channels may choose to sell their products both online and through direct response TV (remember Snuggies?).

Is there a way for these retailers to incorporate subscriptions into their mix? Currently, there appears to be only a handful of true multi-channel retailers (and big ones at that) who offer subscriptions, according to this article from Internet Retailer.

As a subset of the online retail channel, we believe there is a relatively untapped opportunity for multi-channel merchants (of course, we’re a bit biased). Here are three advantages we see off adding subscription commerce to a multi-channel strategy:

  • Liquidating older products: As any retailer knows, a product that sits on the shelf for an extended period of time ends up costing more. The longer it sits, the lower the margin. However, multi-channel retailers can easily reduce—or even eliminate—this overhead by offering left-over stock through subscriptions. Imagine (as a consumer) receiving a gift basket from Macy’s every month for a single low-price. The more customers who subscribe, the easier it is to liquidate merchandise that doesn’t sell well. And by packaging those slowly-moving products together, the merchant will increase the value of those products while also creating a new revenue stream.
  • Cross-selling made easy: Because multi-channel retailers already have a connection to customers, selling a subscription doesn’t have to solely be online (as is the case with retailers who only sell online). For example, wouldn’t it be cool to add a simple checkbox to a catalogue order form? Or even offer a sign-up right at the Point of Sale of a brick-and-mortar? This leads to the next point:
  • Improving the customer experience: This is the most important advantage of adding a subscription line to a multi-channel strategy, and it fits well with the concept. Ultimately, a multi-channel approach is about meeting customers where they shop, providing a uniform and high-quality experience no matter which channel they decide to use at any given moment. A subscription allows merchants to provide additional value by providing yet another way for those customers to engage with their brand.

We think this is just the tip of the iceberg. Creative retailers will always find a way to open up new revenue streams while cutting costs, and subscriptions offer an excellent methodology for these retailer.

Are you a multi-channel retailer who thinks it’s time to branch out into subscriptions? We can help.

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