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eCommerce Expo 2019: Bright future ahead for subscription economy, says Hellofresh CEO

Written by Thu 26 Sep 2019

Laurent Guillemain discussed the future of the subscription economy at eCommerce Expo with Birchbox’s Sally Scott

Hellofresh UK CEO Laurent Guillemain says the “the future is bright” for the subscription box market in certain product categories.

Speaking on a panel during eCommerce Expo at Olympia London, Guillemain said companies that provide subscriptions for frequently purchased products, offer convenience and curation, and generate high-order value stand the best chance of succeeding, but said convenience is the most important factor for success.

“It’s ultimately a convenience play to make customers’ lives easier,” he said.

Guillemain, whose company provides weekly boxes of meal ingredients to 2 million customers worldwide, said he was excited about the integration of IoT devices with grocery subscriptions and identified homecare products as an untapped area of the market.

“People need dishwasher soap every week,” he said. “It maybe doesn’t have that curation element but there is that convenience side to it.”

The subscription box market has exploded in the last decade, growing by more than 100 percent a year over the past five years according to McKinsey. In 2016, the market’s largest players generated $2.6bn revenue in the US alone.

Guillemain was joined on stage by Sally Scott, UK Managing Director at fashion beauty box provider Birchbox, one of the world’s first and most successful subscription box companies.

In an ever more crowded market, companies like Hellofresh and Birchbox find themselves competing for diminishing consumer wallet shares. Scott said using existing customers for brand advocacy reduces the likelihood of falling victim to ‘subscription fatigue’.

“It’s about using the customers you already have as your champions so they are advocating for you and sharing your product. One of the best tools we use is Regrams. Even though we spend hours creating visuals on Facebook, the ones that perform best are pictures of our customers’ boxes in their kitchens next to their cats.”

Scott also underscored the importance of keeping customers in the “Birchbox cycle”, such as providing the option to skip a box during cancellation.

“It’s about what happens after the box and making sure we keep [customers] part of our beauty journey,” she said.

Guillemain said Hellofresh prioritises customer education and agreed that product flexibility was key to customer retention.

“It’s about building that flexibility into it – and that includes cancellations. There’s nothing worse than a subscription where you can’t press the eject button.”

Written by Thu 26 Sep 2019

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