September 12, 2023
August 5, 2022
Since the take-off of Amazon Prime, hundreds of retailers, brands, and businesses have taken their shots at a subscription-based business model in order to keep up with the e-commerce giant. Companies like Nike, Regal, and even CVS now all offer some sort of subscription for their products or services – though so far it has proven difficult for many of the big-name retailers to find the desired success with their subscription models.
The biggest issue remains that on average, the turnover rate is higher than forty percent, meaning that more than forty percent of subscribers will cancel their membership within the first year. Many new start-ups have found great success by operating on a fully subscription-based business model, but retention remains an issue even for some of the most successful of these companies.
Take a look at Frank and Oak, a 2012 startup that has since exploded into the fashion and clothing scene, all while operating on a subscription-based business model. The giant wake that Amazon Prime leaves in the water of retail and online shopping has certainly aided Frank and Oak and other companies like it. When people get accustomed to receiving benefits, special treatment, and amazing perks with a subscription, like Amazon Prime, they become more willing to try other out subscription services. But there’s a major difference between small-boutique type companies making monthly subscription boxes pay off and a huge clothing retailer trying to recoup their in-store decline by offering similar subscriptions. Nonetheless, many retailers are exploring subscription models with gusto.
So are subscription services really the way that big-name companies like Nike are going to keep up with the decline of in-store revenue? There’s no doubt that the hugely successful Amazon Prime model has dramatically impacted the retail world, and it’s safe to say that it will never be the same.
Companies that thrived in yesterday’s retail environment are left scrambling for new ways to stay afloat and relevant. An apparently easy answer is to mimic Amazon’s success, but that is much more easily said than done. So retailers are drumming up all kinds of creative ways to play keep-up with Amazon.
Let’s take a look at Nike’s subscription attempt: Nike Adventure Club. “Brand new Nike and Converse shoes delivered to your door with activities to spark adventure in the everyday.” An attempt at getting shoes out of the warehouse and appealing to the activity needs of children, the Nike Adventure Club offers plans from which you can get 4-12 pairs of children’s shoes a year that are delivered with an activity idea for you and your children to try out. So far, it has been successful as it is geared towards children whose shoe sizes and styles are constantly changing, though it shows little signs of success if it were ever to be geared towards adults. But even with this service remaining only for children, the service may prove to be equally as valuable by building goodwill with the next generation of Nike buyers as it is for current sales – Nike has always been at the cutting edge of successful customer and brand strategy.
Many subscription services have found success by either having something highly engaging, like Netflix, or finding a niche that is greeted with open arms by customers who have been waiting for that need to be met.
But what about basic everyday retail items? Even in this area, companies are throwing their hats into the subscription market. Companies like Charmin and Gillette offer subscriptions to receive regular deliveries of toilet paper and razors. In fact, these membership clubs have shown a lot of success thus far!
Essentially, in today’s economy, you can subscribe to endless amounts of goods and services, including things like pet food, cleaning supplies, clothing, music, and even food.
Subscription services are certainly not a new concept; after all, a subscription, at its foundation, is merely a schedule of recurring fees that gives consumers either unlimited or scheduled access to goods or services. Things like magazines, car-leases, and cable TV have been doing this for many years!
The effect that Amazon has had on retail and e-commerce retailers has been great. Many have had significant difficulty staying alive in what is today’s world of Amazon. With its endless selection, quick shipping, free returns, and “Prime” subscription service, it is extremely difficult for other companies to match Amazon’s overall customer experience.
Although many brick-and-mortar businesses have shut down as a result of Amazon’s impact on the market, others have adapted and reinvented themselves. The end of retail is not here, it’s simply changing, and companies are faced with having to change with the shifting market constantly.
Industries from across the board have discovered the power of the subscription model, thanks to Amazon. We’ve seen many wildly successful subscription-based endeavors from software to wine, but it isn’t as easy as simply mimicking Amazon’s blueprint. The subscription model can offer benefits to both businesses and their subscribers, but each company must carefully attack the concept with their own angle and strategy to boot.
Amazon’s incredible success doesn’t mean that other brands have to fall to the wayside, only that they must fulfill different needs and be creative with their services. Amazon is in a league of its own, but the e-retail world is still vast and ripe with endless opportunity.
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September 12, 2023
September 12, 2023
August 5, 2022
Emily…
James comes to Podean with a wealth of marketplace knowledge having worked at Amazon Corporate for 5+ years. He worked in many different roles and groups during his time there from Seller Support to Vendor Management. From recruiting and onboarding 3P sellers to new categories, handling highly escalated executive level contacts, and managing vendor relationships he brings an inside understanding of how Amazon works. James is passionate about online retail and brings a client and customer centered approach as the Head of US Retail Operations. Before his e-commerce focused life, James worked across industries that have always focused and delivered results in customer service, account management, and inventory management.
With more than 15 years of experience Alejandro has led some of the most edgy projects in the LATAM region and has built-up high-performance teams from both agency and brand sides. Working with Havas he put together a Consumer Engagement unit for Pepsi. He led a WPP digital solution for L’Oréal and while working with Mediacom he redesigned Coca-Cola’s media team. Most recently he was a fundamental part of Danone’s media transformation into a brand salience unit. He was born and raised in Mexico City, loves being outdoors, listening to music and spending time with his 7-year-old daughter.
Danielle leads media globally for Podean. She previously led the Amazon and e-commerce division at performance marketing agency, Merkle (part of Dentsu). Danielle has deep expertise across all facets of Amazon advertising – DSP, sponsored ads, audio, out of home and beyond. She has delivered significant growth for some of the world’s largest brands including Nestle, managing tens of millions of advertising spend on their behalf.
Before Podean, Travis Johnson was Founder and President of Dentsu’s Amazon-focused consultancy, Sellwin. Prior joining Dentsu he was Global CEO of Ansible Mobile in New York, and also held CEO positions in Australia for media agencies UM, Initiative and Cadreon. He was an Adweek Media Allstar in 2017 and has won over 50 International Awards across his career.
Maddie leads our client management team and also marketing for Podean. Maddie’s team operates as an extension of our client’s teams – anticipating their needs, thinking proactively, and always delivering on time. Maddie is also responsible for all aspects of Podean marketing, from blogs and email newsletters to PR, content, and advertising.
Lizzy manages the Podean media team across any, and every, media solution offered by Amazon and other marketplaces. Whether it’s search/sponsored ads, DSP display and video, Twitch, audio or activations we have the experts to deliver. Every client that her team has worked on has seen a step-change in media effectiveness and sales versus their previous operations.
Jonathan Hawkins leads Podean’s European operations, working with clients spanning all categories. His team assists brands with every aspect of setup and optimization across the region including supply chain advice, logistics, retail operations, analytics and media management. P Before joining Podean, Hawkins was Commercial Director of Square Up media, owners of media properties including Escapism, Foodism and Square Mile. During his decade at Square Up he led editorial, content and most recently commercialisation and sales with a focus on digital products and ecommerce growth.
We have hand-picked the best and brightest Amazon talent from around the USA and the world. Our delivery team of 6 New York based, and 17 Amazon and marketplace marketing specialists ensure our clients receive the best campaign performance. They are experts in retail management, performance media optimization, but also video, analytics, AMC, voice, creative and higher impact executions.
Ashley has covered all aspects of digital marketing in his career, having led digital media for Initiative Media Australia, then managed a team of cross-functional digital salespeople at Mi9 (MSN) and was most recently the Managing Director of ecommerce conversion optimization software company, Ve. Ashley’s leadership, collaboration skills and entrepreneurial spirit drive the Australian business.
Mark is a 20+ year digital leader and before Podean was EVP at Reprise where he successfully launched IPG’s Amazon Center Of Excellence. Prior to this, Mark led mobile and innovation agency Ansible. Earlier in his career he was the Founder and CEO of Concep, an email and performance marketing agency with offices in the UK, USA and Australia.