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What’s rocking fashion right now? The subscription economy

Courtney Wylie
23 May 2019

An emerging trend making a huge impact on the fashion sector globally is the explosion in subscription-based services, writes Courtney Wylie, VP of Product & Marketing for Mention Me.

A recent report by the Royal Mail has forecasted that the UK subscription box market will grow to £1bn by 2022. Just like the beauty sector where the trend is now firmly established with brands including Birchbox, Feel Unique and Beauty Pie, the industry has been driven by start up brands, but is now also presenting huge opportunities for larger retailers.

Now global retail giants are scrambling to capitalise on consumer demand for long-term subscription based relationships, rather than one-off transactions. Some retail brands that are doing this very successfully already are Sephora, Stitch Fix personal styling, Walmart and Amazon Subscribe & Save.

It’s a wider trend that shows no signs of abating. According to US-market research carried out by McKinsey, the subscription e-commerce market has grown by more than 100 percent a year over the past five years. This McKinsey study also found that e-commerce subscribers tend to be younger (25 to 44 years old) urbanites with a good level of disposable income. And women account for 60 per cent. A perfect fit for the fashion industry.


Subscription services are now well established in beauty with brands such as Birchbox

The emergence of a wide-ranging subscription economy has shifted the retail landscape. In the fashion and beauty industry, it has changed consumer relationships with brands. Our shopping behaviour now centres less around experiencing new products in store, and focuses more on experimenting with lesser known brands and products,  discovered online.

While we are prepared to sign up to a subscription model with familiar brands that resonate with our values and preferences; we are more willing to commit to unknown brands through this model too. This can be driven by convenience, but also for the novelty value of receiving harder to secure, premium products. This type of product lends itself really well to referral, as people love to share niche brands with friends and family. In addition fashion brand referral pages are also highly visual and instagrammable - which helps the referral offer be spread even further. The perceived risk of trying new a fashion brand is also reduced when the brand has been referred by a friend.

Another key takeaway and learning for retailers about the dynamics of subscription based products and services, emphasised in the McKinsey research report, is that recommendations between friends are the number one driver of customer growth for this business model. The report states that, “A recommendation, including word of mouth and positive online reviews, is a key trigger for consumers to sign up with a subscription service, particularly those for curation and access. Subscribers to both also want something new and innovative.”Highlighting that in e-commerce, nothing is a more authentic, trust-powered strategy for customer growth than referral.

Fashion brands that build one-of-a-kind, high value products that stand out from regular high-street experiences, will be the ones reaping the rewards of the subscription economy. For an industry that refuses to stand still, overspilling with talent and innovation, the hat the subscription economy offers tangible opportunities.

Courtney Wylie

Courtney Wylie

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