Boxed joins the subscription model trend
Jim Fosina shared commentary with Jacqueline Renfrow, reporter at FierceRetail. Find her article here Boxed joins the subscription model trend.
- Jim Fosina, CEO of Fosina Marketing Group, says that the move could benefit Boxed, as consumers are always looking for a good price-value relationship. And if the company can maintain subscriber retention, the long-term benefit will outweigh the initial expense on shoppers, similar to Amazon Prime.
- “Boxed Up provides the consumer who understands the need for the service on a regular basis to be rewarded by paying the annual fee and receiving free shipping and incremental discounts as a result of greater contracted loyalty,” he told FierceRetail.
- Of course, Fosina notes that there will be naysayers.
- “There will always be consumers who react negatively to being charged when they have been getting discounts and benefits free—i.e., ‘why do I have to pay for this?'” Fosina said. The challenge will be for Boxed to constantly reinforce in the message that there is great value in a small, incremental fee, which is still almost half the price of an Amazon Prime membership.
- So why now? Fosina says that Boxed is no doubt riding on the success it sees with Amazon, Costco, BJ’s and other similar programs that are charging a membership fee to build brand affinity and loyalty
- “The millennial consumer has demonstrated that they are more than willing to pay for premium services and discounts, so the time is right for businesses like Boxed to address these consumer purchasing patterns and preferences,” Fosina said. “There is no need to ‘leave money on the table’ and/or not take advantage of building greater loyalty and predictability around their customer retention. The model is working well.”
- Fosina expects to see many more online retailers and some brick-and-mortar players step up to the opportunity of subscription programs in the near future. He notes that the secret to the success of this entire model is the ability to retain and grow the relationship over time.
- “Marketers must keep the value of the relationship front and center throughout the length of the subscription in order to retain customers and build a strong and valuable foundation,” he added.