Naver announced that it has added a ‘subscription solution’ to Naver Shopping’s smart store merchant solution. Through this, smart store sellers can utilize the functions of advance customer notification, automatic payment, and delivery cycle setting.
For product groups that can be subscribed to, the ‘Subscribe’ button is activated at the consumer purchase stage. It is currently in the testing period and is expected to be applied to actual products from mid-August. The solution will be provided first to domestic corporations that operate daily necessities, food, kids, beauty, digital, health, and flower delivery categories.
Different from ‘existing subscription’
In fact, regular subscriptions through Naver Shopping have been possible before. However, this function is not supported by the system. The seller specified the regular delivery period and product quantity, sold them, and delivered them individually as individual orders.
For example, the product name [2주 샐러드 정기배송 / 1일 1식]If it is marked as , the seller pays for a total of 14 quantities at once, and the seller distributes them one by one every day. or any of the shopping options [제품 선택]provides multiple quantity options for [수량 선택]There is also a method of setting the number of regular delivery times and explaining this to consumers separately. If you select 5 packs of basic salads from product selection and 5 packs from quantity selection, 5 packs of basic salads will be delivered on the specified day for a total of 5 weeks.
Fresh Code subscription sales products
Using the selection tab, the seller has built and provided a subscription service on its own. (Photo: Salad School capture)
As mentioned above, sellers have been responding to consumers’ demand for regular delivery on their own. Naver Shopping has added a function that allows you to specify the period and number of subscriptions and the expected delivery date in the system under the purpose of “helping you to run a regular delivery business more conveniently and efficiently.”
Naver said, “In the general subscription commerce model, a distributor or platform purchases products from the seller and provides regular delivery directly. On the other hand, in Naver, sellers can directly set up a customized regular delivery system according to the product consumption cycle, customer characteristics, and store operation situation.”
Yoon-sook Lee, CEO of Naver Forest CIC, said, “As there is a database of over 1 billion various products, the purchasing methods that users want vary widely. Naver wants to gain competitiveness with a ‘merchant solution’ that directly provides technology so that sellers can actively respond to these user needs and grow their business. We will expand the scope of the subscription economy, thereby providing users with a new shopping value.”
Changes that the ‘new subscription’ will bring
① Seller
Sellers who need subscription sales such as food and daily necessities expect this subscription service to be very useful. In addition to the task of checking orders by hand and entrusting regular delivery for each item, the existing product, which had to be more labor intensive than general sales, such as change of delivery date, product change, exchange and refund, and countless requests for order correction from customers who misunderstood the regular order method. This is because subscriptions are largely digitalized.
Naver Shopping’s Subscription Service
A parent company that sells companion animal products through Naver Smart Store said, “In the case of daily necessities for companion animals such as feed, we received inquiries about the possibility of regular subscriptions, but we could not afford to build it separately. Through the introduction of this system, we expect that orders receipt, sorting, payment, and delivery request can all be done with just a click.”
Subscriptions bring significant benefits to sellers in terms of supply chain management beyond stable revenue generation. In demand forecasting and inventory management, it is possible to operate with a small inventory, which minimizes the loss of disposal of fresh foods, especially salads. It is possible to secure sufficient time for product manufacturing and picking/packing, and efficient regional setting and distribution based on the scheduled quantity for delivery is also possible. In other words, it is possible to provide customers with new last-mile delivery options such as early morning delivery and designated time delivery, and if it is already available, it can be upgraded more efficiently.
② consumer
Consumers can eliminate the inconvenience of having to pay for all existing products at once. With automatic monthly or weekly payments, you only need to request to cancel your subscription when you need to. In addition, the convenience of ordering and order change is expected to increase. This is because it is easier to click the required menu and date on the system than to communicate with the seller separately.
On the other hand, in the case of regular subscriptions, the necessity of sellers and the burden of purchasing on consumers are met, so they are often offered at a discounted price compared to regular sales. This may cause difficulties in refunding or exchanging payment products. You need to carefully read the seller’s rules and trade.
③ Logistics company
Logistics companies can work with subscriptions the same way they process orders through the existing system. This is because the system does not distinguish between regular subscriptions and regular orders, and shares order information according to the specified date. However, the industry explained that as new delivery options are available, sellers will immediately respond to requests for service differentiation.
NFA Fulfillment Startup ‘Dooson Company”s Pumgo Fulfillment Service
‘Dooson Company’, which is participating as a fulfillment startup of the Naver Fulfillment Alliance (NFA), is providing a fulfillment service to Naver Shopping sellers through its own service Poomgo. Koh Eun-jin, head of the sales team at Dooson Company, explained, “We plan to actively reflect requests such as securing separate subsidiary materials such as wrapping paper and adding leaflets to support sellers’ regular subscriptions.” He added, “If regular subscriptions are activated in the future, it will be possible to achieve advancement in logistics, such as managing separate lines as needed.”
Will the era of ‘subscription commerce’ come again?
Domestic subscription commerce, which achieved explosive growth starting in 2012, has slowed down, and many services have recently disappeared into history. As one of the reasons for the steady growth of subscription commerce in North America, etc., attention was paid to the fact that online and offline consumption activities take a lot of time and effort due to the long physical distance. It is the opposite of
In this situation, can the prolonged pandemic revive the fire of subscription commerce that has been extinguished? Coupang has been operating regular delivery services since 2015, starting with its private label products, diapers, and wet wipes, and as of May last year, it had 400,000 regular delivery customers. A 5-10% discount was offered to regular delivery customers, but this was abolished in June.
Naver said, “We plan to strengthen the competitiveness of the subscription market by combining various product databases (DB) and technical solutions and strengthening the linkage with membership.” Based on the product pool, we will provide users with an expanded subscription experience, and enhance the accessibility and convenience of users by strengthening the display of search filters and vertical services. Furthermore, based on Naver’s unique artificial intelligence (AI) technology and data, we plan to strive to upgrade our solutions so that we can recommend subscription products tailored to customers’ subscription patterns and tastes.”
writing. Byline Network
yoon@byline.network
