We thought April 2018 was a busy month for news about subscriptions and memberships in the retail business and beyond. But, perhaps as a sign of the time, May 2018 proved to be just as busy. We had a hard time deciding which subscription stories will have the most impact as there are big stories from large and small retailers this month. There is seemingly never a dull moment in the world of direct to consumer subscriptions, the subscription economy and recurring revenue business. Please enjoy the stories we thought were the most important in our:
Top 7 MAY 2018 SUBSCRIPTION ECONOMY NEWS
#1 AMAZON announces LAUNCH of prime book box for kids
Amazon was founded on books and now appears to be heading back in that direction with a book subscription program for kids. OceanX CEO and Founder Georg Richter shared some thoughts on "why books" and specifically "why kids" with Fierce Retail. "You have to ask the question why Amazon would choose kids’ books as a category instead of the significantly larger markets of romance novels and mystery novels. The larger plan in my view is more about data and specifically data on families and kids. It is all about the data."
#2 SCENTBIRD SECURES $18.6m SERIES A ROUND FOR SUBSCRIPTION FRAGRANCE GROWTH
Raising money is never the end game or a true sign of success. However, it is always interesting to see where intelligent investors are placing their bets and which brands are attracting investment dollars. Scentbird is a subscription service with more than 250,000 subscribers that allows customers to pick a new designer fragrance every month from a catalog of over 500 options. The new capital will help them "build the brand and gain new customers." Interesting that there is no mention of using these funds to help retain customers which is the key element in a long term successful recurring revenue business.
#3 BIRCHBOX SELLS MAJORITY OWNERSHIP TO VIKING GLOBAL
On the opposite of the fundraising spectrum from Scentbird, subscription pioneer and one of our favorite companies Birchbox was forced to sell a majority ownership and wipe out a lot of prior investors' money after they could not find a suitable buyer. There were rumors of an acquisition by Walmart, QVC and a few others but nothing worked for the leadership. Fast Company provided some great insights into "Why Nobody Wants to Buy Birchbox, Even After VCs Spent $90M." We are big fans of Birchbox and hope that they can turn things around for investors, employees, consumers and the subscription business overall that they helped ignite.
#4 SUBSCRIPTION SUMMIT TAKING OFF
In yet another sign of the times and growth of the subscription box industry, the Subscription Summit is growing and attracting a high quality and large group of subscription experts to Denver next week. In only its third year, the event is becoming a must attend event for anyone in or considering the subscription retail business. The OceanX team will be on hand and will share our takeaways from the event when we get back.
#5 YOUTUBE MUSIC AND YOUTUBE PREMIUM ADD TO THE OVERALL SUBSCRIPTION ECONOMY
Google and YouTube are massive advertising businesses. However, they also see the need to mix in subscription business models into their strategy. So Google decided to break up its premium YouTube Red service into two services- YouTube Music to compete with Spotify and Apple Music and YouTube Premium to compete with Netflix and Amazon Prime Video.
#6 amazing breakdown of Sephora's business from cb insights
CB Insights is absolutely amazing in terms of the quality of the content they put out across many industries. They along with L2 Inc are must reads for our team whenever they touch in subscriptions, CPGs and retail in general. The big name retailer who we think has done the best job integrating elements of subscription and membership into their omni-channel business is Sephora. CB Insights breaks down "How Sephora Built A Beauty Empire To Survive The Retail Apocalypse" in a detailed and informative way where they touch on the success of the Play! by Sephora Box as part of a larger strategy to connect with their customers.
#7 best buy goes subscription for its geek squad
Why pay every time you have a problem with your home technology when you can pay monthly for "unlimited" service? Best Buy has announced the expansion of Total Tech Support Powered by Geek Squad, a subscription-based support and technology service that will "cover" all of a customer’s electronics and appliances.