YAMM! (Yet Another Membership Model)

There are businesses targeted to reduce the number of recurring monthly services for consumers with subscription-bloat.

With yet another choice, which will consumers keep or cut, Target or Amazon Prime? Membership models are familiar but need to differentiate for consumers considering the churn (switching from one service to another).

This is an attempt to ignite a new revenue stream for Target stores, and digital channels open for at least a year are off 5.4% from a year earlier, according to Target’s Q2 earnings report released Wednesday, while digital sales slipped 10.5%.

Retail subscriptions are different than streaming ones. Streaming services generally have exclusive content that differentiates them, and consumer households with varied tastes are incentivized to have multiple subscriptions.

What will make Target stand out from Amazon?

For a shopping service such as Target, let’s unpack some benefits.

Consumers

• Convenience: Subscription services remove friction in the shipping experience
  by delivering products or services directly to consumers regularly.
• Cost Savings: Many subscription services offer discounted prices compared to one-time purchases.
• Personalization: Subscription models often tailor offerings to individual preferences, enhancing the customer experience by providing curated products or content.
• Exclusive Access: Everyone loves exclusivity. There are items often not available to a broader audience. What is Target’s exclusive and differentiated merchandise?

Merchants

• Predictable Revenue: Subscription models provide retailers with a steady, predictable revenue stream, allowing for better financial planning and inventory management. The Finance Team and investors love this most.
• Customer Loyalty: The opportunity to earn long-term loyalty and increased spending.
• Data Collection: Subscriptions allow retailers to collect detailed customer data, enabling personalized marketing efforts and product development insights.

Prime Memberships include

• Free or heavily discounted shipping
• Discounts on subscription buying through Amazon
• Prime reading, music, and videos
• Photo storage and five GB of video
• Prime Premiere – Free theatre movie tickets. Did you know? https://lnkd.in/gDKEUPUK Leave a comment and a like if I unlocked a new benefit for you. 😉

The goal isn't to validate the quality of one service over the other but to see where Target can dial into benefits for Consumers and themselves.

1. What will make you pick Target?
2. With almost 2,000 Target physical locations versus 3500 or so physical Amazon pickup locations (including Whole Foods and Lockers), which is most compelling to you?

Written in response to Target aims to rival Prime