Why can subscription clubs be a good deal?

Amid the hustle and bustle of everyday life and the (immense) amount of information we receive in our mailboxes, social networks and messaging apps, subscription clubs have gained a special charm. After all, without the need to face queues and crowds, subscribers receive desired products, in exclusive brand experiences. And it was precisely with this appeal that clubs grew 167%, in Brazil, between the years 2014 and 2018, according to data from the Brazilian Association of Electronic Commerce.

But it is not just convenience that explains the success of this model. To understand the growth of these subscription clubs and the impact this has on brands, it is necessary to understand the context in which they are inserted. Our team went after these answers and even brought you examples of brands that are doing well in this area. Come learn with us!

What explains the growth of subscription clubs?

As the portals specialized in trend agencies (such as WGSN) and in the “business world” have pointed out, to understand this phenomenon, it is important to consider that, increasingly, brands are adhering to a business model called “Direct to the Consumer”.

This is because this model allows companies to sell their products directly to customers, which generates mutual benefits: consumers inform themselves and get closer to brands, and they, in its turn, stand out in a more transparent way. for their audiences, in addition to having greater control of logistical processes.

And if brands are looking for closer contact with consumers, subscription clubs have stood out as an interesting solution. They allow companies to offer an immersive brand experience, with boxes full of exclusive surprises and personalized items, and still earn regular revenue.

The greater adhesion of people to e-commerce, during the pandemic, also contributed to the success of the model: the Brazilian subscription club market, until October this year, had a growth of 10%, in relation to 2019, according to a survey by Betalabs disclosed on the investment portal called Valor. Also in the same period, 800 new clubs were launched in the country and, per day, 600 new consumers join the subscriptions.

What we can learn from subscription clubs that are doing well in the market?

As stated, this business model has been successful among consumers, but, of course, it requires some care. In addition to offering compatible prices and having a strong branding strategy, companies need to do a thorough study to understand whether there is a demand for products to be purchased periodically.

With a direct dialogue with their audiences, some brands have shown that they can make the brand experience beautiful through the subscription model. Let’s check it out!

1. Harry’s: listen to your audience’s feedback

The razor blade market is, somehow, “dangerous” for competitors. After all, some brands with a large retail presence have a large share of the market. But the American company Harry’s, founded by Andy Katz-Mayfield and Jeff Raider, decided to sharpen their arguments and face this challenge. Offering German blades – known for high quality standards – and premium shaving products at a competitive price, the brand has been winning customers through subscription clubs.

In an interview, Harry’s manager Matt Hiscock told one of the brand’s secrets to success: listening to customer feedback and improving services from them.

“Because of our close relationship, we receive a lot of feedback from our customers, which helps us to make improvements to our products.” he said. “For example, we added a cutting blade to our second generation of straight razors because several customers have told us how much it would be beneficial for their shaving.”

2. Petiko: deliver personalized products and services

Who knew that four-legged friends would move such a large share of the market? According to a survey by Euromonitor International, released by Forbes, this year, Brazil has become the 2nd largest market for pet products in the world, behind only the United States.

Although the sector suffered an impact, at the beginning of the pandemic, it recovered in a few months later. Isolated at home, people were more open to adopt pets or were more attentive to their needs.

And nothing better to take care of pets than receiving, at home, the products they need, isn’t it? With that in mind, Petiko offers its customers subscription plans according to the needs of each pet. With them, subscribers receive premium snacks, toys and care tips selected by experts, which look the size, breed, sex and age of pets.

3. TAG: offer an engaging and exclusive experience

You can’t talk about signature clubs and D2C models without mentioning TAG Experiências Literárias. After all, the brand has become one of the biggest highlights in this segment. Since 2014, the club has sent clients a surprise literary work, selected thoroughly by a curator from the literature area, in addition to a thematic magazine and a gift.

Nowadays, TAG also offers international bestsellers still unheard of in Brazil. During the pandemic, according to the brand’s marketing director, more people approached the club: visits to the site grew 70% over the same period last year. And there was also an increase in the number of downloads of TAG applications, which seek to encourage the habit of reading.

Subscription clubs have proved to be a fertile ground for brands that want to offer outstanding experiences and to strengthen relationships with their audiences. Driven by the pandemic and new consumer habits, this business model shows that, with strategy, creativity and attention to details, it is possible to conquer your place in the market!

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