Coca-Cola Revisits Subscription Model; Latest CPG Company To Embrace The Digital D2C Future

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The Coca-Cola Insiders Club has returned — sort of. Though currently marked sold out on the website for the current three-month run that will see insiders receive monthly subscription boxes of goodies, consumers are encouraged to sign on for the waitlist now that the return is underway.

Initially launched in early 2020, Coke’s subscription box program was paused in response to the COVID-19 pandemic. Now that the offer has returned, consumers who made it in for the first round paid $45 for a subscription that will run through March of this year for boxes that offer a peek at new products and other Coke-related swag. The specific contents of each box, thus far, are a secret but early 2020 offering included Dasani water flavors not yet on the market and some Coca-Cola stickers, according to reports in EatThis. According to Coke, each shipment will also include a special virtual experience, such as a workout with an NFL legend or a cooking class with a celebrity chef.

The newish move by Coke puts it in line with a host of other big-name players that have pushed into the direct-to-consumer (D2C) line as a result of the COVID-19 pandemic, though Coke perhaps has the distinction of being a brand pushed out of and then back into the market by the same event. Other big names pushing into the market in 2020 include brands like Nike and Coke’s main rival Pepsi. Those were pushed not only by necessity amid the digital shift, but also because it turns out that selling directly to consumers is actually a pretty good business.

“The test for D2C is always: ‘Can you provide a value proposition that really resonates with the consumer?’ Because that’s when you get the repeats. That’s when you get the sustainable proposition,” said Gibu Thomas, Pepsi’s head of eCommerce. “We’ll continue to invest in it and will continue to iterate and pivot until we find the propositions that consumers find delightful and sticky.”

And making those experience delightfully sticky is also, according to How We Shop: Measuring the Rapid Digital Shift study, potentially quite lucrative. Among consumers surveyed, 37 percent are interested in direct-to-consumer sales — particularly with well-known brands to which they are loyal. Forty percent of those interested in D2C said they’ve bought from and trusted the brands where they want to purchase directly, while 33 percent believe D2C retailers have better deals on their websites and that it is easier to see all of a brand’s offerings on one site.

Even better, from the brands’ point of view, is that the consumers most interested in D2C are typically younger, better educated and wealthier than those with less interest in the concept.

For example, 43.9 percent of those making more than $100,000 told PYMNTS they’re interested in D2C purchases versus only 31.1 percent who earn less than $50,000.

But, as Recurly CEO Dan Burkhart told Karen Webster in a recent conversation, building the D2C experience correctly through a subscription model, for all its potential, is harder than most merchants fully credit when they go in for building the experience.

“It’s one thing to move to a subscription model,” Burkhart said. “It’s an entirely different kind of challenge for organizations to change the value system and the culture of a company to be truly customer-focused, and to focus on that long-term experience of delivering value.”

Doing just anything, he said, won’t work, particularly at this phase of the evolution where consumers are nearly inundated with offers from brands for ways to sign on for a subscription. Consumers will only sign on for so many, he noted, and rising to the top of that heap means subscription D2C brands aren’t a “set if and forget it” proposition but instead an area of constant monitoring and perfecting. The firms that are winning — and will continue to win — in the subscriptions world are those that constantly check in on customers to evaluate how the company is doing and how it can deliver more value, Burkhart said.

Will Coke prove to be one of those brands? The jury is out, as the first round of its subscription boxes are just now shipping out. Whether they’ll end up being sticky enough to stick around this time remains to be seen.

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