#RetailEXPO19: Subscription models are a marketing not retail business

The dynamics of subscription models mean they should not be seen in the light of a traditional retail business, according to WufWuf chief executive Umul Ilhan.

WufWuf sends subscribers a monthly selection of gifts and toys for their pet dogs and was set up in 2017 by Ilhan, who was told his business idea would not work by the biggest wholesaler in Turkey.  

Speaking at RetailEXPO in London, Ilhan said: “I think subscription is a marketing business rather than a retail business. Subscription is a great chance for retailers and wholesalers to enter the market with a new product, to test it and see the results. It is the cheapest and easiest way.”

Sally Scott, managing director of beauty subscription service Birchbox, says she feels “sorry” for retailers that do not understand subscription businesses.

She explained: “We are another channel to market that helps them become better retailers. It is a very cost effective way of gaining intelligence on your product from your customer and you can see what their behaviour is after the sampling.”

Jon Hulme, co-founder and managing director of the Craft Gin Club, sends its subscribers a detailed survey after they receive their gin, which is typically from smaller suppliers and not readily available elsewhere.

Craft Gin Club then sends the gin supplier the results of the survey in the form of a 40 to 50 slide presentation.

Scott concluded: “I think the subscription business is on a journey and the constant question is ‘how do you keep that journey exciting and deepen the bond with the customers and brands?”.