How Subscription Services Use Data To Engage Customers

Subscription services offering everything from clothes to food to alcohol to software to media are becoming a popular option for many Americans, with Pymnts.com recently placing the number of U.S. vendors alone at 11 million. As part of a typical subscription program, customers sign up for a company to send them curated products — often products specifically selected based on the customer’s profile. Returns are often free, and the customers are charged only for items they decide to keep.

Consumer response to the concept is definitely on the upswing: Forbes points to 37 million visitors to subscription company websites in April 2017 alone, representing 800 percent growth since 2014.

What’s contributing to the success of such subscriptions? One factor is that the vendors involved are optimizing multiple forms of data to better understand their customers and predict their needs and preferences.

The savviest ones track and closely study online behavioral and shopping patterns to figure out which products and services are most likely to appeal to key audiences — then earn their loyalty as repeat customers. The subscriptions offer the vendor a regular stream of revenue, and the more the vendors continue to study their customers, the better their opportunities for upselling and cross-selling.

While small niche retailers have been engaging in this methodology for several years, major retailers such as Ann Taylor, Fruit of the Loom, Gap, JCPenney, Old Navy and Under Armour are now testing subscription strategies as well. Analysts say many of the big players are using subscriptions to gauge how consumers will respond to certain products before they’re stocked in stores, while others are primarily strategizing to turn occasional shoppers into regulars.

In order to curate subscription products, brands must recognize patterns among vast amounts of customer data. The problem? Most brands have tons of data but no clue how to use it to accurately determine customer behavior, or predict which products customers may want to receive. One tool brands can use to assist in this process is Lineate's DataSwitch platform. DataSwitch efficiently aggregates audience data across platforms, campaigns, and channels, then uses audience ID tracking to identify your individual customers across touchpoints.

By tracking customer behavior across different devices and marketing channels, you'll be able to see which products keep your customers on the hook and which are receiving the least interest, ensuring that your buying strategy and promotional campaigns are based on what your customers really want.

“To find out what will work for customers you have to know what they want, and technology helps do that,” advises Richard Kestenbaum in Forbes. “Successful subscription boxes are adapting and personalizing their boxes to each individual consumer. If a company can make a subscription box with pleasant surprises, they will continue to sell through as long as the customer maintains an interest in discovering new products.”