The holiday season might be a time of rest and relaxation for some, but for the retail industry, this is when things get serious. Having trouble keeping up with the news? No worries — we’ve got you covered.
The New Gut Check
The beauty supplement business is booming, having grown 7.1% from 2012 to 2017, according to market research firm Euromonitor International. But that’s nothing compared to the growth in subscription e-commerce, which has grown more than 100% in the last five years, per McKinsey & Company. Bring them together and what do you get? A slew of customization options baked into subscription offerings from beauty supplement brands
Subscription e-commerce has grown more than 100% in the last five years
Women’s health care company Binto, for example, “not only has its personalized subscription option for customers but also offers a specialized probiotic subscription for customers struggling with gut health, a fertility subscription, and a hormonal subscription.”
We’re not entirely sure what a hormonal subscription is, but it seems to be working -- 92% of Binto’s business is subscription based, and their return rate is less than 8%.
Point of No Return
The e-commerce company Brandless launched in July 2017, promising the next generation of generic goods. Offering food, beauty products, and household supplies under their own minimalist imprint, Brandless seeks to eliminate the “brand tax” -- the markup on many products that magically appears when you slap a logo on the box. Most items cost $3.
While Brandless has managed to eke out a valuation of $500 million, they’re having real trouble retaining repeat customers, according to data from e-commerce retailer Edison Trends. “Of customers who bought from Brandless for the first time in the final quarter of 2017,” Recode reports, “20 percent made another purchase in the following quarter and just 13 percent bought something three quarters later.”
But Brandless is hardly the only e-commerce company to experience difficulties building out a Relationship Commerce practice. “Every time I have a new client the problem is, how do we move from one purchase to two?” Jason Goldberg, SVP of commerce at SapientRazorfish, told Recode. “How do we develop a habit around buying that product?”
Check Yourself Out
Amazon isn’t the only retailer with an apparent vendetta against the humble cashier -- Walmart-owned Sam’s Club will soon begin testing a concept shop in Dallas that similarly does away with cashiers. “Eliminating friction doesn’t mean replacing exceptional member service with a digital experience,” John Furner, Sam’s Club President and CEO said. “We know our members expect both.”
Eliminating friction doesn’t mean replacing exceptional member service with a digital experience
Of course, anyone who’s struggled mightily with a self-checkout kiosk might beg to differ, but Walmart’s plans extend beyond simply checkout. “Shoppers at the Dallas store will need to use a custom Sam's Club Now app,” CNN Business writes. “It comes loaded with features, including shopping lists that auto-fill based on past purchases, an interactive store map that navigates shoppers along the ‘best route,’ and augmented reality features that will give shoppers additional product information.”
You didn’t think that was the week’s only item in the increasingly ubiquitous “battling the Amazon behemoth” genre, did you? Despite feeling like several lifetimes have passed since the news broke, it was only four months ago that Amazon acquired PillPack and promptly sent health care stocks into a nosedive.
It was only four months ago that Amazon acquired PillPack and promptly sent health care stocks into a nosedive.
On Wednesday CVS unveiled their latest attempt to keep up with Bezos -- CarePass, a pilot program that “includes free delivery on most prescriptions and online purchases, access to a pharmacist helpline, a 20 percent discount on all CVS-branded products and a monthly $10 coupon.” CarePass is a paid membership, running $48 annually or $5 monthly.
The program highlights something CVS can do that even Amazon can’t (yet) -- bundle prescription drugs with everyday products. As CVS Pharmacy President Kevin Hourican explained, “With the membership program, the hope is people will shop at CVS instead of other retailers, shop more often and shop in more parts of the store than they currently are.”
Less than a two weeks after Lyft launched its monthly subscription plan nationwide, Uber has followed suit, introducing Ride Pass, an Amazon-Prime style membership program that promises to save riders up to 15% on their overall monthly travel costs. It’s a potentially transformative move for both the ride-sharing and auto industries.
“In the future we won’t own transportation; we’ll subscribe to it like we do Netflix or ClassPass or Amazon Prime,” Katie Dill, Lyft’s design vice president, told Vox (semicolon apparently included).