In recent years, retail subscriptions have emerged as a new trend. Paired with the rapidly evolving capabilities of eCommerce, they offer a convenient and cost-effective way for consumers to access their favorite products without having to make frequent trips to physical stores.
As a result, this model has disrupted traditional retail practices in the US and is experiencing a surge in EU merchants and customers opting for it. In this article, we will explain what retail subscriptions are, explore the reasons behind their popularity, and explain how businesses can ensure they are offering these services effectively.
Retail subscriptions are a service where customers pay a recurring fee to receive products on a regular basis, typically monthly or quarterly. Some examples of this service include:
The list goes on - there is a variety of options available due to the fact that the retail subscription model is becoming increasingly popular across a wide range of industries.
Retail subscriptions are becoming more and more widespread worldwide due to the fact that they provide users with a wide variety of benefits, namely:
With these reasons in mind, it comes as no surprise that retail subscriptions gained popularity in the US and are now confidently taking over other markets across the globe.
The US was an early adopter of retail subscriptions, with companies like Birchbox and Dollar Shave Club launching in 2010 and quickly gaining a large following. Since then, the subscription model has expanded to include a wide range of products and services, and many new subscription-based companies have emerged.
What’s more, over the past couple of years, the popularity of retail subscriptions has grown in the EU, with reports indicating that the market is expected to reach over €12 billion by 2025. This can be attributed to factors such as increased adoption of e-commerce, changing consumer preferences, the COVID-19 impact, and a growing focus on sustainability and ethical consumption.
While retail subscriptions have gained popularity in both the US and EU, there are some notable differences in the approach to this business model, namely:
The adoption of subscriptions as a merchandising model was slower among European merchants and consumers compared to their counterparts in the US. Some possible factors that may have contributed to it are:
The demand for products differs across the EU and the US, which results in distinct sets of product categories offered to consumers in both countries.
The subscription services market in the US is primarily driven by convenience and value, with replenishment offers being the dominant type of service. On the other hand, in Europe, there is more emphasis on luxury goods and brands often use subscription boxes as a way to introduce consumers to new high-end products.
This means that US subscription services may offer more pricing tiers and options to cater to diverse consumer preferences, while EU subscription services may focus on providing essential services at competitive prices.
Additionally, due to the larger market size and competition in the US, subscription services may offer more promotions, discounts, and incentives to attract and retain customers. In contrast, the EU market is more regulated, and there are more restrictions on pricing and competition, which may limit the pricing flexibility of subscription services.
However, it's important to note that the pricing structure of subscription services can vary widely depending on the industry, service provider, and consumer demand.
For instance, businesses can enable users to personalize their orders and choose the number of products they wish to receive, giving them the flexibility to customize their subscriptions according to their unique needs. Consumers who desire control over their subscriptions are also sure to appreciate having the option to pause, skip, or upgrade their offers as needed.
Furthermore, clients expect brands to offer multiple payment options, while also making the checkout process frictionless by allowing one-click purchases. Thus, brands that will manage to analyze their target audience and optimize the payment process to match their exact wishes are guaranteed to retain customer loyalty over the long term.
Thank you for reaching us. Your request has been sent successfully. We will get back to you as soon as possible.
Message was not sent