This year’s holiday shopping season is going to be very different — and very digital — than what’s come before, sticky.io CEO Brian Bogosian told Karen Webster in a recent discussion. But for all of the concern about how retailers will fare in such a disrupted year, Bogosian isn’t worried.
With the exception of some hard-hit segments like travel or historically troubled areas like department stores, he believes a holiday season powered by the great digital transformation of 2020 has every likelihood of being merry for retailers after all. And Bogosian sees a happy new year on the way for the sector in 2021, with retail starting out on a solid enough footing to think about thriving instead of merely surviving.
“I think with [COVID-19 vaccines coming on line], we’re going to be entering a change in where the pandemic is going,” Bogosian said. “And I do think we’re going to see a boost in the economy. I think going into the holiday season, this will be a very strong year for online merchants, and we’re also going to see a lot of merchants who have been brick-and-mortar oriented retooling themselves for the emerging multichannel opportunity. I think ultimately, it’s going to help them reduce costs and it’s going to help them increase sales. And I think overall, it’s a great place for all of us to be.”
That’s something, he noted, that’s particularly true in the world of building out subscription services. Bogosian said an increasing number of merchants are catching on to the idea that subscriptions are more than a source of recurring revenue, but a channel by which to “develop an ongoing relationship with that consumer.”
‘Tis The Season For Subscriptions
The expectation, based on the data sticky.io has seen so far, is that it’s about to be a “tremendous” season for subscription retail as consumers are increasingly oriented to digital gift-giving in 2020, Bogosian said.
Besides, shipping physical goods is going to be constrained by both inventory limitations and a smaller shipping window for buying gifts and getting them delivered by Christmas.
“We’ve supported our customers’ subscription gift boxes, and we’re seeing their volumes going up considerably this year,” Bogosian said. “I know I personally will be giving out a lot of subscriptions for various products to people this year.”
In fact, subscriptions are something he believes consumers will increasingly turn to, because a subscription box done right can be very thoughtfully tailored to the intended gift recipient.
Moreover, he noted, it’s something merchants should be eager to embrace. Bogosian said that done right, subscriptions create an opening into a whole new set of opportunities to cross-sell to the gift recipient. Merchants can upsell and reward that new consumer and look to continually expand the relationship.
But Bogosian said the specifics won’t be the same in every case, and offering just any subscription service out there won’t work. He said it’s about building the right subscription bundle for the right customer at the right time.
What The Right Bundle Looks Like
There are many ways for subscriptions to go south for consumers. They get tired of the goods or they like the goods just fine but find that items are piling up all around them.
Bogosian said he’s personally had to pause various nutritional supplements because he suddenly found himself with too many spare vitamins on hand to simply let them keep pouring in through his mailbox.
But while he’s meant to restart such subscriptions when he runs out of supplements, it just ends up being too much effort to remember to subscribe — a friction behind a lot of subscription churn.
“I think it needs to be made a lot easier for consumers to be able to modulate and pause their subscriptions in order to keep that relationship active with them going forward,” Bogosian said.
He said that will also ideally create positive outcomes for both the merchant and the consumer.
Consider Walmart+ as an example. A free delivery offer that comes as part of the bundle both creates a convenience opportunity for consumers and a better distribution structure for Walmart. It allows the company to leverage its massive store network as part of Walmart’s distribution chain for goods instead of relying on a less efficient warehouse model.
But Bogosian said that building the right model for subscriptions in 2020 and beyond doesn’t involve a single offering that works for every consumer. Instead, it’s about understanding that consumer’s full digital commerce experience — perhaps using machine learning and artificial intelligence — and then seeing where a subscription meets the person’s needs.
“It’s about ways to make [a subscription] different and appealing,” Bogosian said. “That means really looking at what your consumers’ shopping habits are, [and] then deciding what other kinds of offers and bundles and pricing and packages are going to work for them.”
He added that artificial intelligence and machine learning “are so important” in helping merchants understand “that whole shopping experience — and using it for customizing and curating better options for your customer to purchase things.”