A new ecommerce business delivers curated gifts to its customers on a subscription basis and exemplifies some of the most exciting new trends in ecommerce.
Quarterly.co — which Zach Frechette, co-founder of Good Magazine, created — does at least three things very well. So well, in fact, that inventive entrepreneurs might find the service inspirational.
1. The Business Model
At first look, the Quarterly.co business model may seem a little confusing. There are, of course, the customers. Then there are contributors. Finally, there is the company.
Customers subscribe to a particular contributor. One every three months or so, each contributor sends a surprise gift to his followers. Quarterly.co bills the customers on a regular, recurring basis until the customer cancels the subscription.
The business model has several distinct advantages that are worthy of business envy.
First, the company’s customers are subscribers who have given Quarterly.co permission to bill them repeatedly with no specified end to the subscription cycle. Thus, Quarterly.co should be able to easily forecast sales and monitor operations based on a known number of customers.
Second, the product being sold is not specifically described. Quarterly.co does offer some guidance about the sort of gift a subscriber will get, but in truth, the company’s contributors could send just about anything. These non-specific products also mean that Quarterly.co generally doesn’t have to deal with returns, customer complaints, unmet expectations, or, for the most part, customer service at all.
Third, many of the gifts that Quarterly.co contributors send are made specifically for Quarterly.co, presumably in quantities that match the company’s known subscriber base. This fact gives Quarterly.co the potential for very tight cost controls and no apparent need to inventory products.
Subscription-based ecommerce businesses are likely to become more popular in 2012, and Quarterly.co is a very good example.
2. The Marketing Proposition
Quarterly.co is not a traditional retailer. In fact, the company’s website declares that “we’re really nothing like a store (well, except for the whole ‘money exchanged for goods and services’ thing).”
Instead, Quarterly.co sells exclusivity and experiences, which are significantly easier to market.
The experience offered is a special connection to a contributor that the customer admires. That connection is made to feel more exclusive, since each contributor seemingly has only a finite number of followers that he can shower with gifts and attention.
This means that Quarterly.co’s marketers can tap into basic human needs for acceptance and relationship. So rather than pointing out product specifications or prompting discounts and coupons, Quarterly.co gets to talk about how engaging with a contributor makes you feel good or seem special.
3. The Contributors
Quarterly.co’s contributors are not really superstars, but they are respected designers, business folk, and organizations. They each have their own followings.
These contributors — effectively — are endorsing Quarterly.co. Whatever influence, reputation, and trust these contributors have in their respective industries is imputed to Quarterly.co. These associations are huge from the perspective of earning trust of new customers who might not otherwise be familiar with your brand.
There is a lot to love about the way Quarterly.co does business. Its model lends itself to known revenues, precise control over costs and operations, and the need for little or no customer support. The company’s marketing proposition is, probably, a lot easier to manage than the pay-per-click ads and stiff competition that many online retailers face, and the company’s contributors are effectively a cadre of spokespeople.
Hopefully, thinking about Quarterly.co will give you ideas for improving or starting your own ecommerce business.