How Replenishment Services Fulfill Subscriber’s Needs

Read Time: 5 min

Since the recent boom of subscription-based services, more traditional products and services have been met with a decline in consumption. Specifically in the range of mid-twenty-year-olds – forty-year-olds, this demographic is the most susceptible to make the switch. While millennials boosted subscriptions, nearly any age range can take advantage of this service.

The Three Types of Subscriptions 

There are generally three types of services that each subscription is categorized into replenishment, curation, and access. Each type represents a specific niche that the subsequent subscription fills in the consumer’s life. 

  • Services that replenish

Provide a recurring service that takes the mundane out of replenishing some aspect of life.

  • Services that curate

Spark a desire or curiosity in the consumer. They foster a want that turns into a need with exciting offerings that create a recurring need.

  • Services that provide access

Are just that, services that give their subscribers access to products or services that might not be easiest to acquire or are much more accessible as a convenient delivery.

subscription grocery service

The Millennial Influence

Among the three types of services that exist, replenishment services tend to be the most successful form of subscription. Because the target audience of subscription services happens to be right in the millennial age range, there’s no surprise that replenishment services shake up the everyday. 

Millennials have a documented tendency to shake up a number of industries, putting their own influence on many refined traditional markets. The subscription industry has picked up on that trait, capitalizing on providing services that put a twist on traditional industries.

From groceries to razor blades, there are certain products that become necessities in the eyes of the public. Whether those necessities are picked up weekly, monthly, or more sporadically, recurring revenue is here to provide a service. 

Millennials’ struggle with ‘adulting’ is another factor that connects to the success of subscription. Life gets complicated and it can take a lot of concentration to remember to consistently change razor blades or toothbrush heads. Replenishing services are a gentle (and fun!) reminder to make those necessary changes.

Why Replenishment Services Succeed

There are many reasons why subscription services that replenish knock it out of the park for consumers. For starters, the convenience aspect surpasses the usual credit that is associated with subscription services in general. Receiving personalized necessities at a regulated schedule while skipping the trip to the drugstore is a godsend for those who dread picking up the essentials on a regular basis. 

A major factor for the success of this type of subscription relies on the nature of why subscribers decide to make a commitment to a subscription. Because replenishment services tend to be born out of necessity, it’s understandable how consumers are drawn to the offerings.

Existing in the Subscription Space

Despite being a rapidly growing industry, subscription e-commerce can be a highly difficult market to remain in as a service provider. Many companies establish a great service but then find difficulty in acquiring–and then retaining–a consistent consumer base. If a business does manage to get its name out to the public, only 55 percent of those who consider a service ultimately subscribe. It is during this crucial period that a subscription company either thrives or dies. 

Being aware of churn in this space is a self-aware quality that behooves subscription merchants attempting to break into the market. Involuntary churn is likely to happen early on in the acquiring phase of establishing a new business. Understandably so, business owners are eager to begin attracting new subscribers and in doing so, oftentimes sell their services short. 

While discounts and promotions can be a great way to lure in consumers, service providers need to establish a solid foundation prior to going to those measures. The worrisome aspect of churn is the semi-unpredictability of when subscribers might opt out. 

Auto-Replenishment: Pros and Cons

While most consumers signing up for a subscription are aware of the service’s recurring nature, auto-replenishment can be a make or break for a business’s success. The pros can definitely outweigh the negatives in terms of subscriber retention rates. 

subscription service bagThe Pros

The way consumers shop is constantly evolving. From the surge of online shopping came the utter success of subscription-formatted commerce. Users can utilize their smartphones and tablets to schedule subscription services that fit their lifestyles. For most services, negative option billing is a standard for recurring charges. This service saves time and effort for both parties when processing payment each month or whatever timeframe is indicated for fulfillment. 

Auto-replenishment services aren’t limited to just subscription boxes! From magazine subscriptions to Amazon Dash, there are plenty of outlets to receive replenishable goods and services from.  

The Cons

For subscribers who are new to the structure of the industry, the repetitive nature of these services can be off-putting. This type of consumer can be hazardous to the merchant because of potential chargebacks. This is a leading factor as to why subscription is deemed high risk. Traditional processors require minimal chargeback rates for businesses that are looking to acquire credit card processing. Which is something that many subscription and continuity businesses struggle with. But with a high risk merchant account, businesses in this industry can secure payment processing that will support them long-term.

With more services using automated services, the more of an invasion the public might feel. Despite signing up for these services, the recurring aspect can be unsettling to some.

The Future of Replenishment Services

In the subscription space, replenishment is strikingly different than in typical retail use. While there is some technology involved to regulate consumer trends and habits, in standard retail this goes to a completely new level. Using collected information from the consumer, these services can predict when to buy milk or laundry detergent without the explicit action of said person. This new technology can benefit both consumers and merchants by keeping a stocked household or warehouse.

All things measured, there is a lot of potential for replenishment technology to continue to saturate the subscription space. As long as subscribers are aware of the flow of recurring services, technology should help rather than hinder the process.