Unilever FMCG acquisition uses ‘Club’ subscription model to bypass supermarket channel
A customer club with an ongoing subscription for club members may offer your food brand or manufacturing plant a new way to beat supermarkets to the punch.
Establishing a club for your customers means that your products are part of the club service. Belonging to the club makes each customer feel appreciated, and gives that feeling of being wanted and being a part of something special with likeminded people.
It also locks your customers into making regular automatic payments but with great value for money, they hardly notice the money coming out, so they keep paying the fee, all adding up to a good steady revenue flow for your business.
Dollar Shaver Club acquisition by Unilever latest example in good steady cash flow
A good example of a shift to this Business-model is the Unilever acquisition of the US’ Dollar Shave Club. This is a subscription-based business where customers agree to pay a set fee monthly in exchange for monthly razor blades sent to their door. The service is available in Australia.
Although the Dollar Shave Club concept is not food-based and might be easier to run because the logistics of shipment are easier than for food, the club-based subscription model can be adopted by any business.
In the case of the Dollar Shave Club, customers can cancel at any time so they are not locked in, but it only takes between AUD $4 – AUD $10 a month directly from the customers account, making it easy for them to continue having this basic necessity delivered directly to their door.
The Dollar Shave Club is not the only club/subscription service currently trying to offer customers an alternative to using supermarkets and other retailers for basic necessities either. Services like Hello Fresh deliver weekly groceries straight to your door along with meal plans and recipes, essentially eliminating the need to duck to the supermarket after work for dinner ingredients.
Other subscription models such as Virgin Wines Discovery Club also sends regular deliveries of wine providing consumers with yet another reason not to go to the supermarket or liquor store.
With supermarkets still taking a large chunk of the money consumers spend on everyday items, it will be interesting to see how many FMCG companies (including amongst them food and beverage companies) might look to create subscription models in the near future.