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person cooking a meal

Latest delivery time

23. May 2016, Editorial

Far from newspapers: Subscription models also give bricks-and-mortar retailers persuasive arguments. Above all, because consumers want to save time and money.

Thema:

comfortable
deliver
eat
future model
home
ny times
subscription model

Instead of shopping with the shopping basket, today, we shop with our smartphones. Conveniently from the sofa. Fresh fruits and vegetables, healthy snacks. Beer and wine too. Or biscuits. Beauty products. Socks. Even toys for the dog.

Everything can be shipped. And now there’s a subscription for almost everything. Order once, receive at regular intervals. It’s the peak of convenience, and incredibly practical, too, at a time when many are working but shop hours blithely end sometime between 6 PM and 7 PM, the same as always.

Everything can be shipped,
order once, receive regularly.

But the market is expanding rapidly, especially where food is concerned. What used to be a delivery service on-demand is now a subscription service – with up to eight million orders per month (Blue Apron, a delivery service for meals). In 2014, according to CB Insights, more than a billion dollars were invested in the food and meal delivery service industry, with another 500 million during the first quarter of 2015 alone. Particularly booming right now: meal kit services. Boxes that have all the ingredients needed for preparing a certain meal. New opportunities for stationary retail to expand their services as well.

Subscription models are booming in the food industry above all. But any product area can adapt the model for itself.

The New York Times (!) decided to join the food delivery service Chef’d just for this reason (money). In summer 2016, readers can have the ingredients for NYT recipes delivered to their homes within 48 hours. The price for two persons: between 19 and 39 dollars. The motivation, according to the vice-president of market development, Alice Ting, is that the NY Times target audience also likes to spend a lot of time cooking, and it wants to attract this market. Healthy nutrition, creative cooking, learning new recipes and ingredients – all of this corresponds to the spirit of the times and above all, the lifestyle of Millennials.

In a world where online shopping is steadily replacing a local shopping jaunt, going to buy groceries at the shop also seems like too much effort. Whilst many retailers are still fiddling with switching over to online shopping, they’d be better off working on their own subscription models. The pioneer there – no surprise – was Amazon with its “Subscribe and Save” subscription. The mail-order house delivers the desired products at intervals chosen by the customer. Regularly and more cheaply because of the repetition. In addition, Amazon is entering the meal kit business. Less surprising: It is the fastest growing business model for food.

Subscriptions of any type function so well because they not only meet the needs of the comfortable customer, but also because they offer a new experience for both – customer and retailer.

For one, toothpaste, facial tonic and cotton swabs are easily always on hand. For another, the company can add a new shampoo the next time, which might be liked and immediately added to the standing order. Basically, for stationary retailers, it’s about using as many sales channels as possible in the sense of multi-channel marketing and to individually play off them. The subscription model is just one of many – but at the moment, it’s the one where many customers are clicking “Like”.

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