With the number of subscription-based goods and services skyrocketing in recent years, consumers are now flush with choice. Everything from video streaming platforms to product rentals are available via a subscription model, and consumers are signing up for these goods and services in large numbers. For subscription providers, this popularity is welcome news, yet it has also led to a cluttered subscription space, making competition fiercer than ever.
“Customer acquisition has just continued to get more and more competitive over time,” Allison Vigil, president of Rocksbox, a monthly subscription service that rents jewelry to customers with an option to buy, told PYMNTS in a recent interview. “As that acquisition has gotten more challenging, it’s become even more important to retain the customers that we’re working so hard to find.”
The Challenges to Customer Acquisition and Retention
Increased competition is not the only challenge. Subscription providers must also contend with a range of macroeconomic forces, in addition to pandemic-related disruptions, Vigil explained.
“In today’s economy, there are macro pressures that are placing strain on subscription providers,” Vigil said. “Between rising inflation, supply chain pressure and global instability, there is more pressure than ever on discretionary spending.”
This pressure discourages consumers from signing up for new subscriptions. It also makes current subscribers more inclined to cancel existing subscriptions, especially ones deemed unnecessary.
As a rental subscription service, Rocksbox also faces unique challenges that other types of subscription services do not. Unlike video streaming services, for example, Rocksbox must consider where and how to store its physical inventory, considerations made more difficult when the number of subscriptions is waxing and waning. These concerns can also differ from those of other subscription providers that deal with physical inventory.
“The way we think about inventory to support rental has its own kind of nuances and challenges that are different from the inventory needs of supporting a monthly box or a subscription where you can access and purchase from a collection,” Vigil said.
With an increasing share of customers of all subscription types complaining about unexpected costs, Rocksbox also faces unique challenges when it comes to customer expectations. Vigil explained that Rocksbox crafts its sign-up and onboarding process to clearly communicate monthly costs while stressing that the subscription is a rental service, not a subscription that allows customers to keep the items each month. If a customer does choose to buy an item, Rocksbox is transparent about costs, she said.
Leveraging Data to Keep Subscriptions Fresh
There are a variety of ways subscription providers can navigate all the challenges they face. In Rocksbox’s case, the company focuses on ensuring that its offerings present high quality and high value.
“We want to ensure we’re delivering really amazing value,” Vigil said. “So we are really working hard to provide access to beautiful products through a curated assortment that meets customer needs for fashion jewelry. This must be as engaging and as seamless an experience as possible.”
Rocksbox strives to create the desired customer experience and product selection, in part, by intelligent leveraging of its internal data. Vigil explained that Rocksbox uses its data to understand the styles that drive traffic, including which items customers are renting and for how long, which ones they are wish-listing and which products they are purchasing. She added that Rocksbox also solicits feedback from customers.
“We collect a range of feedback scores from members, [on features] from quality to style to price to just general feedback on the piece. And that becomes a really rich set of data as you look for individual style, performance by designer, performance across metal tone or silhouette or trend,” Vigil explained. “[The data is] shaping the entire process, from concept and product development all the way through investment.”
As a result of this data analysis, Rocksbox recently released a new subscription tier focused on bridal offerings.
Payments Play a Role, Too
Vigil noted that although product offerings are essential for customer retention, payment functionality also plays a role.
“Our customers are really using the service on their mobile phones, so they want mobile-friendly payment experiences, and they want the points of engagement to be as easy as possible,” she observed. “They really want flexibility as it relates to payment options.”
As a result, Rocksbox supports a range of payment options, especially ones optimized to make mobile use easier, including Apple Pay and PayPal. The company also supports traditional debit and credit payment methods.
By offering the right products and payment experiences, Rocksbox has been able to navigate the ever-more competitive subscription space successfully. This success became apparent last year when Rocksbox was acquired by Signet Jewelers, the world’s largest retailer of diamond jewelry — ensuring that its subscriptions will continue to sparkle for years to come.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More