Pay as you drink: The rise of subscriptions in FMCG

We continue our investigation into Resolution beating brands and products

One of the top new year’s resolutions is to finally get those finances under control. In such a scenario, in a bid to quickly save money, consumers typically cut discretionary or unnecessary purchases, particularly in the supermarket.

However, subscription based models offer a new approach to circumventing these financial cuts. An estimated 58 million people in Britain now have monthly subscriptions to a range of services, with an average of £56 being spent on them each month.

Subscriptions are seen as a more manageable, budgetable option for indulgence. Originally a favourite of technology products, the system is now moving into the realms of FMCG.  Dollar Shave club was one of the first to do this and have since been acquired by Unilever who presumably saw scalable opportunity in this space.  However, many more brands are adopting this pricing model, which disrupts the traditional customer journey and reduces the chances of consumers changing to another brand or product.

Most recently Dirty Lemon provides an interesting example of how this can be activated in the real world. In the US the beverage brand have started to offer a subscription service to their drinks in-store. For a monthly fee, drinkers can walk directly into the store, take what they want off the shelf and walk out, without having to go through a payment process.

Using price to promote purchase is nothing new but disrupting the pricing model and payment process to streamline the consumer experience and reduce churn is. The idea that this model is beginning to transition into the real world stores is exciting and makes the tactic a far more suitable option for a wide range of FMCG brands, particularly in a sector where consumers are seeking out a more seamless and efficient retail experience.

By: The Value Engineers

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