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Subscription shopping services. Success Mechanics for American Projects

Businesses with a subscription model grow like mushrooms, and this looks logical: with the “subscription” approach, both entrepreneurs and consumers win. Once convincing the customer to join, the service should no longer compete for each of its next purchases, but may concentrate on the quality of services and recruiting new consumers. Business is becoming more predictable, because payments are received regularly.

At the same time, buyers also benefit – they get the service or products they need at a bargain price, and can free up their time and attention for more interesting activities than routine purchases.

Today we’ll talk about subscriptions for things, since this business model looks promising for development in Russia.

Table of contents:
How does Amazon earn millions of dollars on subscriptions?
I want regular surprises. And to get more, but pay less!
With the boxes for girls, is there any other examples?
To summarize
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How does Amazon earn millions of dollars on subscriptions?
Amazon Subscribe & Save has been successful in the United States – tens of millions of people use it. It works quite simply: you select the goods that are constantly needed, determine the delivery interval, and then regularly receive orders.

Moreover, if more than 5 goods are delivered to one address per month, then the additional discount reaches 15%. The program involved thousands of items. For each specific product, the number of packages and the frequency of the desired delivery are adjusted – from monthly to semi-annual. Delivery itself is free. But there is a nuance that is beneficial to the retailer and manufacturers, but the buyer is not very.

The price of the product at which the subscription is issued is NOT fixed, which means that every time you pay the current price. In this case, catching discounts will not work.

Since Amazon has dynamic pricing, the customer, when signing up, cannot find out how much they will need to pay next time for the same product. At the same time, price fluctuations are more pronounced than in traditional retail.

For example, here are the price fluctuations over the past 6 months, a discount for a subscription is already included.

GermGuardian Air Purifier Replacement Filter
$ 18.06–33.24.

Honeywell Humidifier Replacement Filter
$ 4.67–11.27.

Lysol Disinfecting Wipes (3-Pack)
$ 8.95-17.91.

A reminder letter arrives 10 days before delivery. If the current price or something else does not suit you, then you can cancel the order or transfer it. But the point of the subscription is precisely that everything happens automatically, so people often do not go into details, plus they constantly add new products to the subscription.

How do Amazon users find out about this service? Very simple: on the page of each product there is an offer to subscribe. And when you ask Google what kind of service it is, the first result is the Amazon landing page with a clear explanation of the scheme of work and benefits for the buyer.

Amazon Tagline: “Become a Hero of Your Family: Save Time and Money with Subscribe & Save”
In Russia, the proliferation of such services is constrained by undeveloped logistics and difficulties with the quality planning of product availability. Although it’s enough to go for a trial period with a small assortment and pre-thought out options in the event of force majeure – for example: moving the delivery date, replacing the same product with a different volume / format, or an analog from another brand (of course, with prior agreement with the client).

A negative factor for the development of the subscription model in Russia is also a strong promotional pressure. Most consumer goods are constantly sold at discounts; people are almost unaccustomed to buying products at full cost.

But you can start with your own brand of goods, as does, say, Public Goods. The service positions itself as a high-quality eco-brand without trade margins, but also without discounts – only regular prices are offered. The project receives the main income from paying customers an annual subscription fee of $ 60.

The range includes personal care products, food and household products. Public Goods has a great design, which cuts off everything superfluous. Clear stamps and a convenient site are made. Well thought out in every detail is visible.

The key way to promote it is through Instagram advertising to build knowledge about the service. It is complemented by blogging and email newsletters. It is curious that the content is mainly devoted to responsible consumption and a healthy lifestyle, and the products sold are only mentioned occasionally.

Discreet consumables for responsible consumption
Discreet consumables for responsible consumption
The Amazon-like model is well-suited for most products with a regular and predictable level of use – for example, for bottled water, washing powder, shaving products, etc.

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