Amazon, Netflix and subscription payments: 5 key insights
The subscription services industry is a booming market that has drawn-in hundreds of startups, millions of dollars in venture capital and changed many aspects of how people shop. The competition for consumer spending is so fierce it’s even convinced old-line consumer packaged goods companies and retailers to re-invent themselves by shipping their products directly to consumers instead of making them shop in physical stores.
The market for subscriptions covers a wide range of physical goods such as clothes (e.g., Stitch Fix), beauty (Birchbox), meals (Blue Apron) to digital services such as music (Spotify), movies (Netflix) and shopping memberships (Amazon Prime).
Take for example the competitive pressure from subscription services on traditional razor blade and shaving cream brands such as Gillette (owned by P&G), Edge (owned by Energizer Holdings) and Barbasol (owned by Perio Inc.), both of which primarily sell through supermarkets and drugstores. There are now more than half a dozen different subscription services selling blades and shaving cream covering the spectrum from cheap to luxury: Harry’s, Dollar Shave Club, Bevel, Birchbox Man, Billie, Morgan’s, Wet Shave Club and Happy Legs Club. So fierce is the competition that Gillette decided to get in the subscription game and now offers Gillette on Demand (formerly Gillette Shave Club).