Could subscription services boost CBD sales during times of restricted offline retail and social distancing?

Subscription services do offer potential benefits to CBD companies. Those benefits come with risks, which may be managed. But the key question for anyone interested in creating such a service is whether they prefer to market to early adopters that have done their research and know what products they want or to consumers with limited CBD knowledge in order to give them the chance to try products they may otherwise have overlooked.

It’s possible to create a subscription service that works for either scenario, according to experts. But it would be difficult to create one that would appeal to both. In either case, the creation of a subscription service provides a series of benefits to the company. Businesses get guaranteed predictable monthly income and easier access to financial services based, and can build a loyal customer base that may purchase other products.

However becoming overly reliant on subscription income can leave a business vulnerable to a sudden disruption – including ones both up and down the supply chain. Tactics exist to minimise this – for example opening up a wider range of products and allowing some consumer selection. But this would increase costs and relies on the consumers being knowledgeable about the product offerings.

And what about consumers? Why should they take up something that benefits a company? For many the consistency of delivery is appreciated. While most would find the savings generated by guaranteed sales appealing if the company chose to pass them on. Many enjoy the whole anticipation of getting something in the mail and the ‘unboxing experience’, according to experts from subscriptions services in other channels.

But there are disadvantages for them too. For one a service rarely exactly matches needs – with monthly consumption of a product inevitably varying to some degree. And ‘subscription fatigue’ is a real concern both in terms of the number of companies in different sectors with different items that can be ordered through such a service being off putting and in terms of the monthly offering of products from the service becoming too predictable.

Again there are potential solutions to minimise issues. For example offering a ‘Prime’ type service with reductions in shipping or price in return for a monthly flat fee payment. But these are also not a perfect solution to the issues at hand.

For more details on the issues, consult a new collaborative feature article from CBD-Intel incorporating information and advice from both the USA and Europe.

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