Are Australian Brands Missing A Subscription Opportunity?

US retailer Walmart surprised many when it launched Walmart Plus last month, a premium subscription service that gives members access to unlimited delivery and special deals.

The move puts Walmart directly against Amazon, which has enjoyed enormous success through its Amazon Prime initiative in recent years.

And while the US retail subscription market might be starting to look a little overcrowded, in Australia, it is anything but.

Amazon, eBay and Catch all currently offer subscription services in Austalia, however, these marketplaces are yet to enjoy the same uptake as they have had in the US.

According to Criteo’s commercial director Colin Barnard, it is some of Australia’s more established brands that are best placed to embrace this opportunity.

“In theory, a retailer who has a large range of products that are bought reasonably frequently and cater to mainstream Aussies could have a subscription model at scale and this may reduce or eliminate the largest barrier to online purchases: delivery costs,” he told B&T.

“This applies to marketplaces who already offer these services such as Amazon, eBay and Catch.com.au as well as multi-brand retailers like Woolworths, Big W, Target, Kmart and Bunnings.

“The genius of Amazon Prime is that as a consumer, each time you have the choice of Amazon or another retailer you will want to extract as much value as possible out of the subscription to justify the cost, therefore most of the time you will opt to purchase via Amazon.”

While discounts are a major selling point for these services, it is the perceived ‘perks’ that are most inviting to customers.

Barnard pointed to recent Criteo data, which shows 57 per cent of Australians would sign up to a loyalty program and subscription-based pricing model because of the free perks, such as free shipping.

And while a like-for-like service to Walmart Plus might not be feasible in the Australian market, Barnard still urged local brands to be brave when it comes to engaging with customers across multiple touchpoints.

“Aussie brands must be bold and strive to offer the most valuable customer experience possible, even when they think the competition may be insurmountable,” he said.

“A full-funnel marketing solution that supports every stage of the customer journey is a crucial piece of ensuring they understand their consumer and can cater to their needs.”

He highlighted the work of Kogan.com and the collaboration between Catch.com and Target as great examples of Australian brands engaging with customers in new ways.

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