Tying into the increasingly prevalent consumer demand for convenience, the rise of subscription models is undeniable, especially within the beauty industry. Lucrative and well-thought-out subscription models enable your business to create recurring revenue, building solid cash flow as customer numbers build.
Initially popularised by Amazon and Glossybox, subscriptions have evolved since their creation to cater to the busy lives of customers and are increasingly customisable – with features such as amendable timescales for purchase and delivery and quantities to suit a customer’s unique requirement. Regular revenue for your business, less hassle, and a more cost-effective solution for customers – a win-win all round.
So how can you tap into this lucrative selling model and achieve subscription success? Read on for our top tips for beauty businesses looking to harness the power of a subscription model.
Find your niche
First up, decide what you’re offering – and most importantly, whether it’s something your target market wants. Where is there an opening in the market for your type of product on a subscription basis? Is anyone else offering subscriptions on similar products in a similar way? Why would consumers choose your subscription model over another?
If you’re an established beauty brand with a sizeable customer base, you shouldn’t be put off introducing a subscription model within your existing offering. The key here is doing something different. Conduct some market analysis to determine what’s not quite right with the way competitors currently do things – then aim to solve that for your customer. Beauty subscriptions tend to thrive where an established customer base wants the option to save and never run the risk of running out of their favourite product again – so to dip your toe in the water, focus on that and measure results before launching in full.
Pick your model
Subscription models do vary – so you’ll need to give a little thought to how your beauty subscription will operate. Popular beauty subscription models include:
This model caters to a very specific customer base who love trying new beauty products and have the disposable income to treat themselves to a variety of samples each month. Whether consumers are looking to tap into their inner influencer or want a gift for the skincare-obsessed friend, these types of products are very aspirational and desirable – more of a treat than an everyday requirement. For this, you’ll want to pick a niche carefully – ideally something that hasn’t been done before. If you choose to pick a trending niche (such as clean/green beauty, vegan and/or cruelty free) be sure to fully vet all products and brands to ensure they reflect this 100%. Examples of this include BirchBox, FabFitFun and GlossyBox.
*Subscribe and save:
Customers respond well to this option when it applies specifically to products they need and use on a daily basis, such as skincare, vitamins and wellness products. This can be built on a very basic model, simply sending a new product out every 30 days – but be warned, the success of this can wane as customers find it doesn’t suit with their unique requirements. Personalisation is key here – enabling customers to choose from a variety of time periods and product quantities (see Feel, Amazon and Purition)
* Subscription only:
This is where your entire business model is built on a subscription basis (see Estrid, Harry’s and Daye). Note that this is successful only for a very specific set of everyday products – it won’t work for everybody – and where skincare and cosmetics are concerned, you’ll still want to offer the flexibility of pay-as-you-go on single products. Something to bear in mind here as always, is catering specifically to your customer’s needs. That usually means making the subscription process as customisable as possible – allowing them to choose a product quantity and delivery frequency that suits them.
Choose your platform
Platforming is a key consideration that’s often missed (or left till last) when developing a new online business, or expanding an existing one. Platform should come first – during the planning stage, before any initial steps have been made. Scope out which platforms offer a subscription capability that best suit your plans, and then determine how it can be done.
For established brands already using an existing platform, it’s best to explore the capabilities of your current provider first to avoid the huge task of re-platforming where possible.
Most of the main platforms including Shopify, WooCommerce and BigCommerce provide the capacity (either through bespoke coding or plug-ins) to introduce a subscription model on your site.
Give some thought to payment and check-out options at this point too. It will support the set-up and maintenance of a subscription for your customer – simple, quick and painless is key.
Locate a 3PL solution that suits
Off-site considerations may not be the sexy side of subscriptions, but without sound support from a reliable 3PL partner — you can’t run a beauty subscription model successfully. How will your subscription actually run from a logistics standpoint? You’ll need fulfilment support that connects directly with your platform to ensure customers’ products are sent out on time and keep track of active subscriptions.
This tends to be more complicated than straightforward ‘pick and pack’ per order, so be sure to choose a 3PL partner who can deliver on this seamlessly to avoid disruption and maximise success.
Want to learn more about launching your beauty brand in the UK? Read our white paper here.