Subscriptions provide valuable customer data

Subscription models offer businesses a direct and continuous channel to their customers, providing an invaluable stream of data about their behavior, preferences, and needs. This data has become a significant asset in its own right.

Unlike traditional retail models where customer information is often fragmented or owned by intermediaries (distributors, retailers), a subscription business interacts with its users directly and regularly. This allows them to collect "delicious data" on:

• Usage Patterns: How often customers use the service, which features they engage with most, and what content they consume. Netflix, for example, uses viewing data to predict which shows a user will like and to inform its original content production.
• Purchase Behavior: What products customers buy, how frequently they re-order, and what items they purchase together. This helps in personalizing offers and managing inventory.
• Direct Feedback: Subscription services can build in mechanisms for direct feedback, such as ratings, reviews, and surveys. This provides qualitative insights that complement the quantitative usage data.

Walmart's "Goodies Co." subscription box was a prime example of a data-gathering initiative disguised as a product. The primary goal was not the $7/month subscription fee, but to learn which new snack products resonated with consumers, thereby informing the purchasing decisions for their much larger retail stores. This direct line to consumer preferences is a powerful competitive advantage.