Brands and retailers have been getting creative with new revenue streams in 2020, whether launching new e-commerce channels or entering the DTC market. With a new addition to its point-of-sale solution, retail technology company Lightspeed is aiming to make a new source of revenue available to its customers: subscriptions.
Subscriptions have grown in popularity in recent years, across a number of industries. A subscription service can either provide reliable delivery and value, such as when purchasing essential products, or offer a consistent source of entertainment and novelty. During the pandemic, with consumers focused on both value and entertainment while stuck at home, subscriptions have been one way for brands to lock-in recurring sales.
Rolling out a strong subscription solution can be challenging, due to the high rates of churn and the logistics of mass distribution. But with the right technical infrastructure, the potential rewards are great: not only do they generate consistent revenue, but subscriptions can gather significant consumer data; make shipping more efficient due to the consistency of fulfillment; and lead to add-on sales.
“It’s key for retailers to understand the needs and demands of their customers, catering their subscription service to enhance the customer experience and product offerings in order to drive recurring sales,” said Dax Dasilva, founder and CEO of Lightspeed. “With Lightspeed Subscriptions, merchants can customize their offerings so they fit in with their core products and existing business model.”
By combining with the platform’s POS system, Lightspeed Subscriptions can build off existing consumer data and be used to create more personalized products. Integration is simple for Lightspeed users, in the form of an add-on for Lightspeed Retail, and the function utilizes the same secure payments technology as the company’s broader solution.
Many apparel brands might not previously have considered a subscription offering, but there are several ways to deploy one. Dasilva recommends creating a monthly membership for VIP customers, which might allow for early access to new product or special discounts. Alternatively, shoppers might want to sign up for a recurring shipment of hand-picked product, tied to their style preferences.
This kind of customer purchase is particularly useful at a time when shoppers are more open to trying new brands and less loyal than ever. By appealing to new customers with an exciting novel service, whether for personal use or as a holiday gift, brands can potentially grow their repeat customer base for 2021. Happy recipients of a subscription may also choose to buy additional items from the brand, outside of their recurring delivery.
“Lightspeed Subscriptions provides brands with a new revenue stream to support them throughout the holiday season and into the New Year, using a new sales strategy that focuses on customer loyalty and recurring payments to unlock long-term profitability,” said Dasilva. “They can also offer a new gift option that can be personalized for loved ones.”