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Why Target’s plan to dominate subscription-based retail falls flat without mobile

Target is expanding its online subscription service to include more than 1,000 new products, but is likely to struggle scaling in an already crowded market without a solid mobile component.

Target Subscriptions is an online shopping service that lets consumers set up deliveries for consumer-packaged goods products that consumers buy regularly from brands such as Procter & Gamble, Johnson & Johnson and Kimberly-Clark. Target Subscriptions has been live for six months, and the retailer reports that the program accounts for 15 percent of all online sales for the eligible items, but lacks mobile-optimized content.

“For general merchants like Target, subscription offerings are about convenience and savings, and of course mobile users are interested in both,” said Jason Goldberg, Chicago-based vice president of the commerce practice at Razorfish.

“The challenge has been that users are often hesitant to work their way through the relatively complex process of setting up a subscription account on their mobile devices,” he said. “So while retailers might put the bulk of their efforts into recruiting subscription users on laptop and tablet browsers, retailers should make it fast and easy to add items to an existing subscription via mobile devices.”

Mr. Goldberg is not affiliated with Target. He spoke based on his expertise on the subject.

Driving repeat traffic?
Target Subscriptions includes a microsite where consumers can view all of the qualifying products and set up orders to be delivered every four, six, eight, ten or 12 weeks.

The site is broken up into eight categories: Baby, personal care, health, beauty, household products, grocery, pets and home and office.

Once shoppers click on a subcategory, they can view a list of the curated products, select the date that they would like to begin receiving orders and checkout straight from the site.

Although Target has a slick and easy-to-use mobile site, the microsite for Target Subscriptions is not optimized for mobile, forcing consumers to pinch and zoom to read content on the screen.

Mobile users who click through on a category on the microsite are taken to an optimized page that lists all of the Target Subscription products. However, consumers cannot sign up for the subscription services through the mobile-friendly pages.

“We are working to make it easier for guests to add or manage their subscriptions via mobile, and plan to introduce an enhanced mobile experience for subscriptions later this year,” said Eddie Baeb, spokesman for Target, Minneapolis.

Target is missing out on a big opportunity to not only increase sales, but also build loyalty without a mobile component to Target Subscriptions.

Target Subscriptions is geared towards consumer-packaged goods, which can be a lucrative market with moms and families who are repeatedly stocking up with cheap products.

At the same time, the number of online and in-store programs between big box retailer and CPG brands has grown significantly in the past year as retailers look to create compelling shopping experiences that downplay showrooming.

“Target’s product mix, which includes everyday staples and unique desirable items, is well-suited to a subscription program,” Mr. Goldberg said.

“Clearly a subset of Target’s loyal shoppers want the convenience and savings of subscriptions,” he said. “Target probably initially underestimated demand and now they are scrambling to rapidly expand the program.”

Fighting Amazon
Target’s expansion of the program takes a direct hit on Amazon’s Subscribe and Save program, which also lets consumers set up CPG orders to be delivered at set times.

Similar to Target’s efforts, the microsite for Subscribe and Save is not optimized for mobile. However, consumers can still shop the featured products by pinching and zooming on content.

Both companies are hoping to carve out a space for themselves that leverage their brand names to differentiate themselves.

While Amazon rules the retail world in terms of convenience, Sucharita Mulpuru, New York-based principal analyst at Forrester Research, believes that Target’s program has the opportunity to win back some market share in categories such as diapers, which is a top-selling category for Amazon.

However, the lack of strong mobile and cross-channel initiatives in both Target and Amazon’s initiatives leaves room for other competitors, such as Walmart, to differentiate itself.

Walmart’s history in subscription-based retail thus far has not been successful though.

The retailer launched a service called in 2012 that let consumers buy a $7 monthly package of snack products. However, was shut down in October, indicating that subscription-based services will continue to be an area of experimentation for retailers in the near future.

In addition to retailers, there are also a number of start-ups and applications that are clamoring for a piece of the subscription-based model.

For example, Boxed is a mobile app that lets consumers bulk shop for CPG brands and delivers to anywhere in the United States.

“Much of the success depends on multichannel integration including in-store pickup as well as mobile ordering and the ability to cancel or adjust shipments at will,” Ms. Mulpuru said.

“Simply expanding the number of items that have a ‘subscription’ link won’t be enough,” she said. “It needs to be a flexible program with copious email/text communication about what you’ve ordered and when things are coming as well as recommendations on other items to add to your order.”

Final Take
Lauren Johnson is associate reporter on Mobile Commerce Daily, New York