Commentary

Subscription-Based Businesses Need To Offer More Than Function

Freshly is a subscription-based food delivery service offering healthy, gluten-free foods that provide benefits in convenience and health. As of January, it is in 48 states. 

Meghan Taylor, vice president, brand & creative, Freshly, described subscription as the action of agreeing to make advance payment in order to receive something or participating in something. The latter, she said, is more important. It's delivering an experience.

Subscription services go back to the milkman but now they are in all aspects of our lives. But with DTC, she said, you're subscribing to a specific brand, experience, and product. Examples include Harry's razor blades, Stitch Fix for clothes, and Quip toothbrushes.

Why use a subscription model to sell food?

Taylor said it makes sense from a business perspective. It allows predictability and reliability. You know your revenue and orders, you can plan in advance. On the other side, when someone signs up for a subscription, they give you a lot of contact information so you can have a direct conversation to build loyalty.

"We are overwhelmed by choices, especially at the grocery store. We're starting to suffer from analysis paralysis. That many options makes us less happy. 

"It also makes sense because of personalization and expectation. We have information overload. It's nice to feel like something is tailored to you, filters out the noise. It gives the brand a metric for engaging with what may or may not be relevant to the consumer. 

"Our tendency and desire to automate our lives makes subscription services really attractive," Taylor said. 

It also meets consumers' needs by setting and forgetting to buy items in low-involvement categories. 

So, how to make the brand really sticky?

Build affinity and love as well as a strong brand. "Many CPG brands get it right but in the DTC space, new brands haven't built an iconic brand yet."

Also, it's more important than ever for DTC brands to use content. "It's the intangible thing you can offer outside the product.

"At Freshly, we're trying to get to a place where they come to us, we get info, track nutrition intake, diet, then provide tips, recipes, offers, partnerships with other brands.

Convenience, she concluded, is table stakes. "Sustainability as a DTC brand is about delivering more than product."

Next story loading loading..