Do you always forget to buy new razor blades or toilet paper? Then you can subscribe to it. Or do you want to drive a new car but not willing to make the full payment, pay a monthly lease? The Dutch market is leading on the penetration of digital subscription services (Netflix, Spotify) but among the laggards when it comes to subscription services on physical products, according to research released by ING.
Flowers, bags, socks, chocolate, toilet paper, toys ... anything you can think of you can subscribe to. Most companies offer items for 8 to 16 euros per month. Often these items are products that people use a lot and regularly need new ones, such as razor blades. On average Europeans spend about 5 percent of their income on subscriptions which amounts to 130 euros per month.
Car lease and digital services like Spotify and Netflix take up the largest chunk. The latter in particular is popular among Dutch people; 30 percent have a subscription to Netflix or another video-on-demand service.
But the Dutch seem less interested in physical goods. Partly because of their higher income, less time at work and familiarity with shopping online Dutch people tend not to opt for a subscription model on physical goods but make the purchase at once.
This is important for startups looking to disrupt the market. Delivering goods or services for a fixed amount per month is not enough. The cash-rich consumer wants to be surprised or at least get access to things they did not have before.
The "stock" subscription form in which an item is supplemented on a regular basis seems to add the least value. Whether it is washing fluid, underpants, flowers, razor blades or soap, the Dutch are not subscribing to it. It is only when curation is added and an access is given to new products that the Dutch consumer is enticed.
An example in the Netherlands is Parfumado. A perfume startup. A nice smell is inextricably linked to feeling good. But shopping for perfumes has become frustrating, confusing and inefficient. Not only is the product range expanded every year, perfume is sprayed so much in perfume stores that everything smells the same. But then Parfumado, they have selected more than 350 of the finest perfumes and offer users the opportunity to experience all new and classic fragrances for 14.95 per month. Because Parfumado lets the user set his own perfume calendar and occasionally sends a gift surprising the consumer with new scents each month for a fraction of the price the consumer would have to pay in a perfume store.
The research of ING concludes: "All in all, we do see consumers as being more prone to subscribe to tangible goods now that they are used to subscribing to music and video. Not all tangibles will have the same appeal; subscriptions to cars, electronics and food will probably feel more pull than subscriptions to tools and toilet paper. For subscriptions to any tangible goods, winning consumers over will require cleverly designed business models. It still all comes down to value for money for consumers in the subscription age."