By Maria Haggerty, Dotcom Distribution
Subscription boxes have quickly gone from a niche product category to a mainstream retail offering. As emerging subscription commerce brands and traditional retailers race to cash in, the industry is learning that it takes a carefully crafted logistics and fulfillment strategy to retain subscribers longer and encourage brand advocacy via social media and other channels.
Logistics And Fulfillment Advice For Subscription Box Brands
Few industries have experienced the pace of growth we’ve seen in the subscription retail sector. Visits to subscription box web sites increased by a whopping 3,000% over the past three years, according to research by the retail intelligence provider, Experian Hitwise.
Convenience and high-quality customer experiences are driving high demand for subscription boxes. However, nearly all subscriber box brands struggle to manage subscriber churn rates. To improve loyalty and reduce churn, subscription commerce brands need fulfillment strategies that deliver an exceptional customer experience month after month.
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1. Invest in luxury packaging.
Luxury packaging is a necessity in subscription commerce. Since overhead is relatively low for subscription box brands, there is room to bake the cost of gift-like packaging into the budget. With 49% of online shoppers reporting that premium packaging gets them more excited about opening a package, luxury packaging pays for itself by creating an unboxing experience that encourages subscribers to stick around and discover what they will find in next month’s box. First-rate packaging also improves the brand’s marketing efforts by motivating subscribers to share their unboxing experiences with others.
2. Forecast and monitor constantly.
Many subscription box brands provide customers with a button or other mechanism that allows them to instantly end their subscriptions. From a customer service standpoint, it’s a smart move. However, the ability to immediately cancel subscriptions can also create high subscriber churn rates. Robust forecasting is a must, but even in-depth forecasting can’t eliminate the threat of high churn. By constantly monitoring trend lines and subscription rates, brands can manage risk and ensure their ability to meet demand.
3. Team up with a reliable fulfillment and logistics partner.
In subscription commerce, customers expect their products to arrive at the same time each month. Even small mistakes can damage customer loyalty and result in significant revenue losses, so it’s critical to get fulfillment and logistics right. An experienced fulfillment and logistics partner alleviates stress and prevents revenue losses by ensuring that customers receive their packages on time each month.
The key takeaway for subscription commerce brands? Selling subscriptions is only part of a successful business model. To retain customers longer and recruit brand advocates, brands need to view fulfillment and logistics as essential ingredients in a high-quality customer experience.
Want to learn more about how to generate customer enthusiasm and promote social sharing when subscription boxes arrive at customers’ homes? Check out our white paper about fulfillment and unboxing excitement.
Maria is CEO and co-founder of Dotcom Distribution, where she has played an integral role in developing and defining all aspects of the operation, including sales and marketing, operations, finance and IT. Her strategic leadership helps the Board and senior management to establish long-range goals, strategies, plans and policies. Prior to founding Dotcom, she began her career as an auditor at Arthur Andersen and was the CFO of GoodTimes Home Video.
