As we roll full swing into summer, the entire world focuses on the World Cup and we here in Los Angeles celebrate Lebron James becoming a Los Angeles Laker- we look back on the major subscription retail stories of June 2018. Another big month with new insights, partnerships, opinions, announcements and more. Please enjoy.
JUNE 2018 SUBSCRIPTION RETAIL ECONOMY NEWS
#1 SUPREME COURT DECIDES ON SALES TAX FOR E-COMMERCE
On Thursday June 21st, the U.S. Supreme Court issued a landmark ruling in South Dakota v. Wayfair Inc. that will transform the e-commerce industry by allowing states and local governments to force online retailers to collect sales taxes even if they don’t have a physical presence, or nexus, in the state. The main takeaway for many of the direct to consumer subscription retailers is that they are now going to have to spend the time, money and effort to make sure they are collecting and remitting properly. Calculating and collecting is the easy part and concerns about pricing are being over hyped. The main issue is how to handle the different rules and then actually filing in each state until there is a system set up for a one stop shop way of paying each state.
#2 AMAZON MAKES PRIME WARDROBE AVAILABLE TO ALL PRIME MEMBERS
Amazon releases Prime Wardrobe now available for all Prime members. We find it interesting that after a year of testing Amazon has honed in on convenience and massive product assortment as the key reasons for people to try it. Stitch Fix is all about curation and personalization. Amazon is doing what they do best- speed and wide product assortment but very little guidance and we are not convinced people will use this service more than once. They have moved away from discounting perhaps because it was not a good enough incentive or maybe was too good for the financials to work. This could also be yet another Amazon Trojan Horse to push people to their growing private label brands.
#3 FABFITFUN collaborates WITH PINTEREST FOR NEW THEMED BOX
Our friends at FabFitFun continue to do a great job at evolving and choosing unique partners and programs to continue to grow. Excited to see what shows up in the Pinterest 100 Box that they announced at the Cannes Lions Festival of Creativity. Pinterest could be a huge marketing channel for other subscription retailers looking for new ways to acquire customers
#4 LOLA RAISES $24m
LOLA, a subscription service delivering tampons and pads, and now other products, including condoms, has closed on $24 million in Series B funding to scale and also battle competitors such as Cora, The Honest Company and more. While the startup touts its products’ “100% organic” nature, it’s also well-received because of the customization offered and its direct-to-consumer nature.
#5 STITCH FIX LAUNCHES KIDS PROGRAM
The kids apparel subscription space has another big player with Stitch Fix joining the mix. Interesting to note that they also announced in their quarterly earnings that they have 2.7 million active clients, up 30% from last year. They are also not afraid to spend on customer acquisition with $25.2 million in ad spend in Q3.
#6 RENT THE RUNWAY JOINS THE SUBSCRIPTION APPAREL PLATFORM BUSINESSES
Apparel is one the best performing and fastest growing segments of subscription retail. Digital native startups are going head to head with established players for a share of the closet. Hot on the heels of the announcement that Gwynnie Bee is opening up its subscription platform, “CaaStyle” to other retailers, Rent the Runway followed suit and is opening up its logistics tools for other fashion brands.
#7 JEEP, CADILLAC AND VOLVO GO BIG INTO auto SUBSCRIPTIONS
People has always been able to rent cars and leases are in some ways similar to having a subscription for access to an automobile. However, carmakers are now diving head first into the subscription economy and spinning up their own creative ways to get people to roll in their cars. Each brand has a slightly different angle but most are based on paying monthly for a single car or choice of many in the line, insurance, maintenance and related expenses. In June alone there were announcement from Jeep, Cadillac and Volvo who are following BMW, Mercedes-Benz, Ford and Porsche. Volvo launched a new model only available via subscription that sold out in under one hour. Yet another sign on the times of the power of subscriptions.