Consumer giants spurn risks to chase online subscribers

The companies are pitching new online subscription services, which promise stable revenues, lower delivery costs and valuable data about customers.Unilever on Monday will launch its Skinsei brand in the United States after testing, offering “personalised” skincare by subscription. Unilever expanded its Dollar Shave Club subscription razor service to include cologne and beard oil in 2018 and toothpaste in 2017.

Meanwhile, Procter & Gamble, the world’s largest home and personal care company, expanded its Gillette on Demand razor subscription service to Canada. Subscribers can text when they are ready for their next shipment.Selling directly lets manufacturers skirt retailers, giving them more profit and control over pricing, promotions and merchandising. This helps when retailers such as Amazon and Sainsbury’s are pressing consumer product companies for discounts and pouring resources into own-label products.Subscription selling gives them guaranteed revenues, a better picture of customers and can make goods cheaper to deliver.”They’re getting it to you on a specific date, but they don’t have to get it to you in one or two days,” said retail analyst Scott Mushkin at Wolfe Research. “It’s a way for them to manage down their logistics and distribution costs.”Amazon has offered discounts since 2006 with its Subscribe and Save programme, which gives people up to 15 percent off when they sign up for repeat deliveries of household items.It is now “a multi-billion dollar business inside Amazon”, said Tom Furphy, CEO of venture capital firm Consumer Equity Partners and former vice president of Amazon’s consumables unit, which launched the service.GROWING, BUT HOW MUCH?Subscriptions represent about 10 percent of all U.S. online sales, and more than 1 percent of all retail sales, said Burt Flickinger, managing director of consumer consulting firm Strategic Resources Group.He said subscriptions are the hottest part of the industry, growing more than 17 percent a year and outpacing overall online sales, which are growing more than 12 percent. He said subscriptions may exceed 10 percent of the US retail market in five years and 15 percent in 10 years.Euromonitor International says subscription shaving clubs, including Dollar Shave and Harry’s, took about 12 percent of the $2.1 billion U.Sคำพูดจาก สล็อตเว็บตรง. market for men’s razors and blades in 2017, up from 6.4 percent two years earlier.But Dollar Shave’s sales have slowed dramatically, with Unilever in October citing growth of around 10 percent year-to-date, compared to more than 50 percent in 2016, the year it bought the brand.Unilever said a slowdown was not unusual but it was “pleased with performance” at Dollar Shave, whose North American business would be close to breakeven this year.Unilever’s global brand vice president of skincare, Valentina Ciobanu, told Reuters the company wants to make its subscriptions more flexible, because consumers demand options when they buy.”We don’t force you to subscribe at the beginning,” Ciobanu said about the Skinsei brand, which she created inside the company. Skinsei aimed to keep shoppers loyal in part by making changes to the products it recommends based on the season of the year and other factors, she said.Ciobanu said Skinsei’s products could be combined into more than one million skincare regimensคำพูดจาก สล็อตเว็บตรง. She declined to give sales projections.However, she and other executives said it was unclear whether subscription brands would take off or remain niche.”For now it’s still early adopters. The question mark is how long will it take to become more mass, and I think nobody has the answer to that question,” said Bernard Meunier, who runs Nestle’s Purina Petcare business in Europe, Middle East and North Africa.

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