Articles Strategies for Adding Retail Subscription Services

Adding a subscription channel gives retailers the opportunity to generate a steady new revenue stream. However, subscription fulfillment is often more complicated than retailers anticipate.

In a Q&A with Internet Retailer, Nicole Lee, Saddle Creek’s director of fulfillment, discusses common subscription box challenges and strategies for addressing them.

Following is an excerpt from the article…

Offering Subscription Boxes Could Set Retailers Apart from the Competition

IR: What makes subscription fulfillment challenging?

NL: With a batch model, where a retailer ships all orders at the same time each month, there can be intense spikes in order volume. Retailers must invest in space and staff to accommodate peak order processing. If orders require personalization, staffing issues are compounded because the work is more labor-intensive.

It also is important to meet subscribers’ expectations that they will get good value from their subscriptions. Therefore, retailers need to control operational expenses – especially for shipping. Minimizing transit time and cost is critical. To complicate matters, shipments need to be synchronized within tight delivery windows. Social sharing is an important aspect of the subscription model, so everyone needs to receive their orders around the same time.

IR: What fulfillment mistakes do subscription retailers often make?

NL: Retailers expect to fulfill subscription orders the same way they handle ecommerce orders, but it doesn’t work that way. Too often, they fail to pay adequate attention to process engineering. They should design their subscription fulfillment operations for optimal efficiency to accommodate peak order processing needs. However, it’s important to find the right balance. Sometimes over-engineering and excessive use of technology can add too much cost.

Read to the full article on page 31 of the October Internet Retailer issue to learn strategies for implementing subscription fulfillment into a retail business.