Target expands subscription service
Some may think Target is late, but the company says it is ahead of schedule when it comes to developing a successful subscription plan. The retailer, which first began testing a subscription program featuring 150 baby care items last September, announced it has expanded its offers to 1,600 products, including items from grocery, HBC, household, home & office and pet categories.
In its initial test, Target found that up to 15 percent of its total online sales came from customers signing up for subscriptions. Target spokesperson Eddie Baeb told RetailWire that the retailer found this number particularly significant because it happened "in a program that we really didn’t put any marketing behind at all."
While it can be argued that Target is late to the game when it comes to subscriptions, the company denies it is chasing Amazon.com’s Subscribe and Save or any other retailer’s program with its offer.
Mr. Baeb said the company is taking a deliberate approach to expanding the program. "It’s still early. Will this go beyond 1,600? That’s our intention. But, we still have a lot of learning to do. We’re going to listen to guest feedback and see where we take it," he said.
Besides the obvious convenience appeal, subscribers have the added benefit of receiving a five percent discount on items included in their plans. If they use Target’s REDcard, they will get an additional five percent discount. Free shipping is included with all subscriptions.
Mr. Baeb said Target customers have a degree of price protection with their subscriptions, as well. "When the product ships, you get charged what the product is on that day. So, if the product is on sale the day it ships, you get the sale price."
One category that could figure more prominently in Target’s subscription plan is grocery. Right now, it is offering various Keurig Green Mountain K-Cup coffee and Soda Stream refills.
While not providing details on future plans, Mr. Baeb said consumables would be an area to watch. He said Target had added these products when it expanded its order online/in-store pickup program from 35,000 items to the more than 60,000 it offers now. He said, "How guests respond to that option will inform what we do going forward."
Target has taken some hits in recent years for its IT and e-commerce performance, including a bumpy transition managing Target.com after parting ways with Amazon, problems processing coupons in stores and a data breach that exposed the records of tens of millions of customers. The retailer will no doubt face increased scrutiny over any new or expanded initiatives such as the new subscription plan. In a review of the site, RetailWire discovered that of five paper towel items offered for subscription by Target, two were available only in stores.
- Subscriptions – Target.com
- Target expands subscription service as it fends off Amazon.com in fight for online shoppers – The Associated Press/Star Tribune
Do you think Target is being too cautious in rolling out its subscription plan? Where do you see the biggest opportunities for growth? What are the relative pros and cons associated with a subscription plan?