A shortlist of the trends that will define payments and commerce in the 2020s would almost certainly have to include sustainable notions of retail, along with the growth and evolution of subscription commerce.
Not only that, but thriving in a digital world dominated by Amazon is among the main task for pretty much every other company over the next decade.
All those strings come together in the story of Thrive Market, an online- and mobile-focused members-platform targeted toward consumers interested in healthy eating, fit lifestyles and what’s commonly called “sustainable commerce” these days. PYMNTS recently caught up with Sasha Siddhartha, the company’s co-founder and chief technology officer, to get a better hold on those often-intertwined trends.
One thing to consider at this point in retail history: Subscription and membership commerce might be indistinguishable most times — the differences hardly meaningful — but that’s not the case with all companies, and that includes Thrive Market.
State of Mind
“Membership is really a state of mind,” Siddhartha told PYMNTS. “It’s a group of consumers based around an idea.”
That may sound like public relations speak — vague and hopeful — but you can see how it matters for a company that will continue to make it, or someday fail, based on how well it serves consumers who are increasingly basing buying decisions around the concept of health and sustainability.
Indeed, those Thrive Market members pay $60 per year for access to their favorite healthy snacks, supplements, home, beauty and baby products at 30 percent to 50 percent off retail value. Products are shipped to consumers’ homes, with orders over $49 shipping free. The idea behind having a minimum level for free shipping (one that is relatively high, at least according to the standards set by Amazon) is so that packaging isn’t wasted on small shipments.
“It’s really important from a sustainability standpoint to ship a full box,” Siddhartha said.
Delivery is a big area for innovation centered around sustainability, and it promises to get bigger and more important as the sustainability trend evolves. That concept applies heavily in the grocery space but is also making gains in other parts of retail. Those efforts might include consumer deposits or other methods to make sure sustainability does not get lost in the shuffle when it comes to fulfillment.
But Thrive Market has to face other potential obstacles that go beyond keeping true to sustainably. As PYMNTS’ November 2019 Subscription Commerce Conversion Index survey has shown, 20 percent of otherwise satisfied consumers are planning to terminate their subscription services within the next 12 months — cancellations are a constant threat in this area of commerce, and every subscription or membership operator has to take pains to cut down and otherwise manage those customer defections.
According to Siddhartha, Thrive Market’s path to increased customer stickiness involves going deep instead of going wide. The membership-focused retailer carries some 6,000 “curated” stock-keeping units (SKUs) in its product catalog, he said. That compares to millions of health-, fitness- and sustainable-related products from the like of Amazon.
“We are doing the heavy lifting for the consumer,” he said. “We are making sure they are getting the very best products. We focus a lot of our energy on differentiation and focus on our niche. We create an avenue for customers who are passionate about wellness and conscious consumption.”
It’s those general traits that, he said, help the company succeed in a world where Amazon’s influence is felt pretty much anywhere. Amazon has been in subscription and membership services the longest; they are the “800-pound gorilla” in the space. And PYMNTS’ Subscription Commerce Conversion Index found that 45.5 percent of respondents are enrolled in some type of consumer retail product subscription through the company.
Other tactics — some of which are being followed, at least in general, by retailers in other spaces — include the ongoing promotion of Thrive Market’s private label products. Launched in 2015, they now number about 800, Siddhartha said. And companies competing with Amazon must also focus constantly on providing better consumer experiences — a battle that never ends, especially given Amazon’s massive collection of consumer data and mastery at getting the most from it.
“Amazon forces us or any retailer to sharpen their pencils and upgrade their experiences,” he said.
Sustainable commerce is still in its infancy, but change is coming fast — as is the case with subscription and membership commerce. The experiences that companies such as Thrive Market will undergo in 2020 will do much to foreshadow moves through the rest of this new decade.