The auto-refill economy can turn retail subscriptions into essential mainstays of the household.
And the right approach, as Bean Box CEO Matthew Berk and HomeLife Chief Technology Officer Ivan Rodriguez told Karen Webster, can transform otherwise luxury and discretionary goods into everyday requisites. But flexibility among subscribers has shifted from being a differentiator to a fundamental expectation as consumers seek to be ensured, and reassured, that they won’t run out of the items they want.
The auto-refill economy is populated by tech-savvy younger consumers, especially millennials. Data from PYMNTS Intelligence and sticky.io showed that 40% of these younger consumers use retail subscriptions to get their shopping done.
To be sure, for Bean Box, which sells coffee subscriptions, and HomeLife, a pet publishing and eCommerce site delivering content and pet products, the pressures of the current inflationary environment are apparent.
“One thing we’re seeing is greater price sensitivity,” said Berk.
And while the holiday season is generally less price sensitive than other times of the year, Berk noted that consumers are spending more time researching different selections and perhaps trading down (although just a bit). No matter what consumers are searching for, agreed Berk and Rodriguez, the process needs to be easy and intuitive.
“About a year ago, we redesigned all of our health product pages and made sure that those supplement pages allowed customers to basically shop by the size of their dog,” Rodriguez said of the pet product offerings, which led to a surge in subscription and auto-refill activities.
Platform models have had to evolve, fine-tuning offerings, Berk said. Bean Box initially had its roots in creating a multi-coffee tasting experience, with a quartet of coffees subscribers would get each month. But in recent years the company has sought to become “indispensable … and part of the daily flow.” Bean Box has pivoted to biweekly shipments of larger amounts of coffee. Some customers even get several bags of coffee each week. The key is to satisfy demand at different price points.
It’s a rhythm, he said, where consumers, moving beyond the experimental, tasting stage, think, “I absolutely need it in my kitchen and will get it as often as I consume the coffee” even as different denizens of a household may have different tastes in the beans themselves (some like dark roasts, others like lighter blends).
HomeLife’s model is a bit unusual, Webster noted, because in addition to the products and supplements sold across its site, the company also promotes donations to animal shelters and, among other causes, pairs service dogs with veterans.
“The generosity component is what customers love about us,” Rodriguez said.
Additionally, refunds are simple. Customers can keep products if they’re not satisfied, and donations are not clawed back from the good works. Within the subscription business, the priority is to keep orders flowing and ensure that customers do not run out of stock, he said. If pets are hurting, there’s an urgency on the part of owners to get them the supplements they need.
Inventory remains the lifeblood of the subscription economy. And for auto-refill economy mainstays, the potential is there to reach out, proactively, to ask consumers for their backup preferences, or cross-sell different products and services, and even offer discounts.
“If someone’s buying a supplement, we have the opportunity to show them ‘more giftable’ items that they might be interested in,” Rodriguez said. “…We do that as much as we can to make sure that everyone sees as much of our product line as possible.”
For subscription retailers, said Berk and Rodriguez, the moment of truth arises when there are hiccups — when stockouts arise or delays happen. Berk added that there’s a personal touch, as customers reporting issues are matched with an executive (even Berk) or curator to help address issues. Bean Box has also learned an effective tactic when orders are placed: Wait 15 minutes before sending the shipping notification just in case there are changes to addresses or orders made in a moment of reconsideration on the part of consumers.
Payments are central to the auto-refill economy, and Berk told Webster that it’s imperative to keep the proverbial channel open in terms of the payment methods and cards on file that consumers want to use. Tokenization, observed Berk and Rodriguez, is making it easier to be flexible about payments, to keep the flow of funds uninterrupted even if cards expire or are replaced.
In the year ahead, said Rodriguez and Berk, fine-tuning efforts will continue in a bid to bolster loyalty and make subscriptions essential.
Said Rodriguez: “We’ll tailor the experience as much as possible to make it less hands-on and automate as much as possible.”