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GUEST COMMENT Staying one step ahead in today’s competitive subscription economy

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Although UK lockdown measures have finally begun to ease and the end to all Covid-related restrictions is within reach, the past year has seen a dramatic shift in consumer attitudes, behaviours and purchasing habits — changes that are likely to remain permanently even after life goes back to some form of normality.

As many of us rapidly turned to working, shopping and socialising online when the pandemic hit, just as quickly brands had to adjust the way they operate and sell in order to keep up with the new wave of virtual demands. As claimed by Richard Branson, “every success story is a tale of constant adaption, revision and change,” which has proved to be true for brands in 2021.

While it’s been over a year since the pandemic began, digital channels have remained central to consumer buying habits, and we’re set to see a continued increase in online consumption this year and beyond. According to Deloitte, over half (63%) of consumers stated that they plan to use digital technologies more than they did before Covid-19.

The rise in subscription services


One example of the digital habits consumers turned to during lockdown was subscription-based retail models as an alternative method to repeat purchases of goods in-store.


In fact, according to TopCashback, 2 in 5 consumers have joined a subscription service since the pandemic began, meaning just over half of Brits are now signed up to one — up nearly 10% from 2019.

While key players in the retail space such as GlossyBox, Gousto or HelloFresh have largely dominated the subscription sector for a while now, the past 12 months have seen other major brands pivot their existing offerings and make a move towards this model, including Hotel Chocolat, Nespresso and Majestic Wine.

Subscription boxes were previously used as a way for non-essential brands to increase revenue and build customer loyalty, with makeup and beauty brands accounting for the highest share of the subscription-based pie. The pandemic has presented a significant opportunity for those selling essential goods to move into this space, as consumers quickly turned towards digital channels to purchase essential items including pet food, groceries and toiletries. 

While most shops around the UK have once again opened their doors, subscription services can still offer an alternative means for brands to boost sales and consumer engagement — which is particularly important for those who saw significant revenue loss as a result of store closures during 2020 and 2021.

However, while there are many advantages involved with this approach – the fact that the market is full of dominant and established brands means that retailers must focus on distinguishing themselves from the competition to stay ahead.

Experimentation is key


For retailers to create this competitive edge and entice new customers, experimentation is crucial.

Without constant experimentation across different offerings, retailers will be left in the dark about what their customers are responding to favourably. It’s important to consider implementing an experimentation culture within every retail strategy.

It’s also vital that after launching a subscription based-service, retailers continue a programme of ongoing, rigorous testing to uncover the areas that need work and the areas that are performing well across the customer journey.

Experimentation can be put into practice once testing has been completed to identify any specific elements that need improving — whether it’s adjusting the product pricing or altering the checkout or basket page to reduce cart abandonment.

The power of personalisation


While personalisation isn’t necessarily a new technique for retailers, those that have jumped on the subscription-based retail bandwagon now have an even bigger opportunity to embrace personalisation.

Through the use of tools like digital experience platforms, retailers have better access to customer data than ever before — helping them to gain a deeper understanding into exact behaviours across each stage within the customer journey, and which aspects can be personalised in order to increase sales and in turn, achieve better business outcomes.

But in order to use personalisation effectively, optimising the online customer journey is key. Experimentation can help to achieve a better long-term impact that resonates with consumers – whether that is through content, pricing or even messaging. However, it is important that this is a continuous exercise — personalisation is an ongoing journey that must have the ability to keep up with the needs and requirements of today’s consumers.

Those retailers that are not embracing experimentation and optimisation are minimising their chances of succeeding in the subscription-based retail race, and face losing out to those who have this side of the retail market mastered.


Joey Moore, Head of Product Strategy and Evangelism, Optimizely 

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