Supply Chain Dive features the thoughts of OceanX Director of Marketing, Jeff Miller, about how large brick and mortar retailers and brands are using subscription retail to create a true omni-channel experience. Read the full article here an excerpt copied below.
Subscription boxes are the new retail vertical — and who better to offer them than the brick-and-mortar retailers with omnichannel sales. These legacy companies would appear to have a leg up on start-ups whose sole offerings are subscription boxes. Traditional brands have an established customer base. They have name recognition. They have an existing supply chain. They have vendor relationships.
So why are brick-and-mortar retailers seemingly adopting the subscription channel more slowly than start-ups, and what unique challenges do they face? "Large retailers all want to add this," said Jeff Miller, Marketing Director of OceanX, a platform that provides end-to-end subscription services.
Not all is perfect in the subscription world, though. The Gap and Old Navy "paused" their subscription box experiments this summer, about a year after they began. Adidas is "taking a break" from its service as well. Birchbox, a well-known beauty box company that got its start as a subscription-only service, experienced growth issues and recently sold a majority stake to an investor. Ironically, Birchbox will bring its brands to a brick-and-mortar location, Walgreens, where in-store customers can create their own boxes.
If done right, a retailer can benefit from a subscription service with recurring revenue and better customer understanding. "If you could crack the nut of getting a subscription channel integrated into your stores and e-commerce experience, it can be a great way to have a true omnichannel," said Miller. Some large brands in the market with their own subscription services include Target, Walmart and Under Armour.