Just when you think the Amazon freight train might slow down, it gains speed and keeps on rolling. The latest news announced in December 2018 is that Amazon will be looking to bring what they are calling ‘Subscribe & Save’ to the Australian market. I note that this service is already available to American consumers.
Subscribe & Save is a discounted subscription service for items that people tend to buy on a regular basis such as toilet paper, toothpaste, dish soap, coffee pods and much more.
Amazon doesn’t charge a monthly fee for Subscribe & Save and two-day delivery is free. Instead, it offers a discount on eligible items to incentivise customers to automatically re-order them on a regular basis, starting from monthly through to bi-annually.
The discount is between 5% – 15%, depending on how many items the customer subscribes to. The gamified-type messaging (which I’m a big fan of) states that customers can: “Unlock up to 15% off your entire order”. It certainly makes me want to explore further.
Amazon Prime members receive up to 20% off. I applaud Amazon on this point too, because everything they do is viewed through a loyalty lens to ensure the value proposition remains highest to their members, who pay an annual fee.
This system naturally benefits Amazon, since it is guaranteed a steady stream of orders. And thanks to the “lock-in” effect of subscription services, customers that start using Subscribe & Save may be more likely to buy other items from Amazon since they are already shopping there.
As with all things Amazon, the user experience is very simple:
- Step 1: Select the item(s) to subscribe to
- Step 2: Set your quantity and delivery frequency
- Step 3: Add to cart
Customers can also cancel orders anytime or skip a delivery if they wish to, ensuring flexibility and freedom.
This is likely to pose a problem for local supermarket players because once supermarket customers start buying items such as toilet paper, toothpaste, dish soap, coffee pods elsewhere, they may very well decide it’s just as easy to buy fresh produce and meat elsewhere too, if there’s a compelling enough reason to do so.
Consider the thousands of mums Australia-wide who sometimes struggle to buy formula for their children because of stock issues on Australian supermarket shelves; the Subscribe & Save model immediately solves this problem.
Am I going to be trialing this once it’s launched? You bet.
Max Savransky is Loyalty Director of Loyalty & Reward Co, a leading loyalty consulting firm based in Sydney. He has 10 years’ experience within the loyalty industry including roles at Mastercard Loyalty (Pinpoint), Silverneedle (Next & Sage Hotels) and Pureprofile. As Loyalty & CRM Manager at HOYTS, he launched the highly successful partnership with Qantas Frequent Flyer, including a world-first Qantas Points in-store redemption proposition. He is an active cryptocurrency trader.
Max regularly contributes to www.blockchainloyalty.io, a global resource centre for everything blockchain loyalty.