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~ Practicology ~

A subscription model can
Perfect packaging also test new products and
Two of the businesses showcased in the report have helped to make their subscription models a success by generate feedback from
creating packaging that ensures deliveries can be made even if the customer isn’t at home. customers. KiwiCo uses
customer feedback for product
UK-headquartered Graze pioneered the snacks subscription model, with letterbox-friendly packaging development, and the brands
supplied by GoodnessMe Box
containing multiple healthy snack pods. It has successfully exported its business model to the USA and the
want their products sampled
Netherlands, and the business was sold to Unilever for a reported £150 million in 2019. to create exposure.

Meanwhile, UK-based online florist, Bloom & Wild, also ships to Ireland, France and Germany. It has designed Technology can be both an
a box that will fit through a letterbox. This solves the problem of recipients not being available to accept enabler and a blocker. Ensure
delivery, which often occurs with traditional bulky florist packaging. systems don’t limit your
ability to create an optimal
proposition. Gousto uses
Bloom & Wild’s revenue surged by 70% in its latest financial year, and it sent out two million orders in 2019. Artificial Intelligence (AI)
to predict demand and HP
is dabbling in the Internet
of Things (IoT) with HP
Instant Ink.
The model must support customer acquisition and reten-
tion. Long subscription terms will limit sign-ups, but the In conclusion, we’ve found that the best subscription
churn rate is also a crucial metric. Discounts for longer business models solve a customer problem and happen to
subscriptions and paying in full upfront are both mecha- do it via a subscription, rather than the other way around.
nisms that encourage loyalty. Spotting a customer pain-point or gap in the market
should be the first consideration in any subscription model
To meet the replenishment aim, it’s helpful to allow the development.
customer to choose the shipping cycle or offer the exact
amount that’s required for a standard cycle. Dollar Shave Download the full report at:
Club does this with its monthly delivery cycle. www.practicology.com/SubsModels2020 ••

Ensure your offer stays relevant to subscribers beyond the
minimum time frame. What’s going to ensure that they
renew? Nike’s Adventure Club and KiwiCo’s propositions
are designed with the idea that children’s needs and tastes
will change as they get older.

Add value for customers
Nespresso adapted to the net
who commit to longer
Nestle-owned Nespresso’s subscription business predates the rise of e-commerce. Launched in Switzerland in
subscriptions, or who pay the
total cost of the subscription 1989 as a Club, the coffee machine and capsule brand now has a presence in 76 countries. Its first website was
upfront. Create a model that launched in 1996, and it began to allow direct online ordering in 1998.
adds value for additional
commitment, such as
One of the offers available on its website allows customers to sign up for a coffee machine from as little as £1,
Australia’s GoodnessMe Box
with a one-year subscription for the delivery of coffee capsules.
has.
If you have an existing However, the importance of recommendations to its customer acquisition strategy has remained. At launch,
e-commerce site, how customer acquisition was exclusively through recommendation; customers could invite their friends and fam-
could a subscription model ily to join the Club. 31 years later, the brand says that 50% of new Club members have experienced the brand
complement this? Amazon’s
through family or friends before they sign up.
Subscribe & Save option is
one that relevant D2C brands
could consider adding to their
website.

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