Some of the world’s top consumer goods giants are sizing up the power of subscription services with Reuters reporting the launch of new offerings of late.
Unilever, Procter & Gamble and Nestlé are getting on board with new online subscription services, which offer stable revenues and lower delivery costs as well as valuable consumer data.
Nestlé, which already has a sizeable subscription business for Nespresso coffee, has recently launched a subscription program for nutritional drinks in Japan and has expanded its online bottled water service, ReadyRefresh, in the United States.
It also plans to expand pet food subscription Tails.com from Britain to continental Europe, an executive told Reuters. The service is being tested in France for a possible launch this year.
Unilever is offering “personalized” skincare by subscription through its Skinsei brand in the United States. The company expanded on its Dollar Shave Club razor subscription service to include cologne and beard oil and toothpaste in the last two years.
Gillette made big headlines last week with it’s new ad campaign, and now Procter & Gamble (P&G) is expanding its Gillette on Demand subscription service to Canada. Customers can simply text when they are ready for their next shipment.
Subscription services allow manufacturers to bypass the retailer, meaning more profit and better control over pricing, promotions and merchandising. However analysts told Reuters that cancellation rates are high as consumers get bored and marketing and delivery costs are high.