We’ve just returned from the third annual Subscription Summit, a meeting of the subscription box industry minds. Following are some observations that have stuck with us since the conference.
The Power of Consumer Demand
Consumer demand has driven businesses to innovate and deliver products and services in new ways, and this has lead to entirely new business models. To some extent, the subscription industry began by repackaging old industries in new ways. But then companies began to innovate.
For example, there was always a way to buy dog toys—subscription businesses like Barkbox just made it much easier. Barkbox then used its leverage to begin making better dog toys. And not just for the average dog: it made toys for heavy chewers, for example. In this case, this was a market that was not well-served, which Barkbox was uniquely positioned to address because of its in-house toy operation. This trend was evident across the subscription summit.
Another example is MeUndies. Not initially a subscription service, they began by simply making better underwear, and then they responded to their customers by instituting a membership program. This service took the hassle out of buying underwear by mailing it to subscribers on a regular basis.
It was clear that the consumer demand for new consumption patterns was driving businesses to innovate, and entrepreneurs throughout the conference fed off this energy.
The Industry's Momentum
The subscription trend is not slowing down. While some may look at subscription services (especially subscription boxes) as a fad, there is undoubtedly a lot of momentum in the industry. There were a number of attendees there to do research into new companies—learning about successful techniques, researching vendors, and gathering contacts that could help them to build a new subscription business.
Even digital media continues its makeover: The Athletic is aggressively investing in the best-available sports content, because sports fans demand more from their coverage if they are asked to pay for it.
In the subscription box industry, there are some amazing things happening as well:
In short, the pace of change is accelerating and the possibilities are endless.
Changes in the Vendor Space
The vendor market is very uncertain and going through massive change. There were lots of new entrants into vendor categories.
Of particular interest were shipping and logistics companies. Customers have spoken with their wallets: they want lots of shipping options. It’s clear that this area is ripe for innovation and is going through a tectonic shift to support the needs of growing companies and more demanding customers.
In response, new, specialized entrants have come unto the scene seeking to solve specific problems. Nevertheless, tried-and-true solutions like FedEx and Fiserv are doubling down on their investments in this space to try to capture market share.
The summit proved that there is an accelerated pace of change in the vendor space and a lot of opportunity, and this fact is not lost on the vendors that serve subscription businesses.
Recurly Meets the Needs of the Evolving Market
We were encouraged by the showing at this conference and the optimism about the subscription market. Recurly has been focused on subscription management from our inception, and we have built a best-in-class solution to address the needs of the evolving market.
To learn more, we invite you to talk to a Recurly expert at (844) 732-8759 or sign up for a demo below.