More and more people are signing up for subscription retail ser vices like Dollar Shave Club. Mass personalisation at scale is the future of retail, but it how can you engage customers or prospects if you no longer own the point of sale? Julian Kramer, Chief Experience Ambassador, Adobe EMEA looks at how brands are preparing for the “access on demand” economy.
Subscription retail services are on the rise. Companies like Dollar Shave Club, Birchbox and StitchFix have enjoyed major success, with the latter reaching a valuation of nearly $3 billion just seven years after launching. Not every subscription player has seen such as a stratospheric start, but the sector is on a clear upward trajectory as consumers embrace the possibilities of an “access on demand” economy.
These services have inspired countless others to join the bandwagon and capitalise on a growing trend, driving established brands to rethink their own business models. We are still in the early days of predictive shopping, but the coming years will see an explosion of automated services that deliver what customers want, when they want it, and where they want it.
Mass personalisation at scale is the future of retail, and although it will benefit customers hugely, it raises several questions for brands. Most importantly, how can you engage customers or prospects if you no longer own the point of sale?
Consider the grocery sector, where we’ve already seen a shift away from large outlets to a higher number of local shops carrying products tailored to their neighbourhood, and more recently to online ordering and delivery. Now imagine a company that sells home cleaning products and relies on major grocers as their main distribution channel – smaller stores mean less shelf space for advertising and margin for commodities on display, while home delivery removes this marketing arm altogether, which means their current model will soon become obsolete.
That’s not to say we’ll all just sit around at home or work from now on, waiting to receive hundreds of customised care packages in the mail, but companies will increasingly look for ways to become more experience-driven and inspire loyalty. This will be the key to succeeding in an on-demand economy. In the words of Adobe CEO Shantanu Narayen, “It involves operating your business with a subscription mind-set, knowing that customers can choose to renew or cancel at any point with every click”.
The imperative to adapt is not only driving change in the retail industry. Across virtually every sector, digital transformation has become the focus for brands aiming to grow their market share and stay relevant.
For instance, Virgin Holidays has consolidated data from across its organisation to personalise the user experience for customers. The ability to automate and curate at scale has helped Virgin Holidays boost audience engagement by 50%. Turning to the telecoms industry. America’s T-Mobile has centred its digital transformation around a customer-first, giving subscribers more options to shape their contracts and the services they pay for.
These organisations have very different business models, but they are linked by common thread: a commitment to building experiences tailored to each customer. Virgin Holidays, T-Mobile and many others are using automation for more than just efficiency gains and thinking of how it can help make their brand more creative and relevant.
Most companies still use automation for short-term wins like efficiency and cost cutting, but these have quickly become simple hygiene factors. The real magic happens when brands challenge themselves to explore how automation can improve their way of working in a substantial way.
The answer will not necessarily be to deliver their products or services on a subscription basis, but a “subscription mind-set” will be the mantra of all success businesses in an on-demand market. Just as importantly, when brands automate targeting and channel optimisation they can dedicate more time to creativity and strategic imperatives.
There is no telling what opportunities the future holds. The advent of 3D printing has already seen us consider whether consumers can print their own products at home, cutting manufacturing costs and allowing people to get their hands on time-sensitive goods like antibiotics more quickly.
This was the stuff of science fiction just 10 years ago, but a perfect storm of new technologies and consumer appetite has propelled us forward so that we are quickly catching up to our imaginations.
Now it’s up to brands to keep pace. We live in a world where people can access everything at their fingertips, and disruptive companies are already beginning to pull ahead by anticipating what we want even before we ask for it. As the balance of power continues to shift to customers, companies must act quickly or risk becoming obsolete in an automated, on-demand world.
By Julian Kramer
Chief Experience Ambassador