When you think of subscriptions, your mind probably goes straight to media and streaming services like Netflix or Spotify. But the subscription model has been around long before on-demand entertainment – from catalogues and magazines to milk deliveries. It’s a business model that’s long helped companies generate predictable revenue, build customer loyalty, and gain valuable insights from customer data.
Today, the subscription trend is expanding into in-person service and retail industries, including hair and beauty salons, and increasingly, food service businesses. For smaller businesses like independent cafes, bakeries, and local chains, the model presents an exciting opportunity — but only if implemented with strategy and data-driven insights.
A standout example of subscription innovation in food retail is Pret A Manger’s Club Pret. Launched in September 2020, their subscription offered up to five free barista-made drinks a day for £20 a month (later rising to £30). The appeal was obvious, and the results were remarkable: within three months, over 16,500 people signed up, and by April 2023, it was used 1.25 million times a week by 180,000 customers.
But the too-good-to-be-true deal had its limits. In 2023, Pret adjusted its offering, reducing the fee to £5 per month (with a planned increase to £10 later shelved) and removing the unlimited free drinks, replacing it with 50% off up to five drinks a day. The shift reflected the need to balance customer satisfaction with profitability — a balancing act all businesses must master.
Unlike Pret, smaller businesses don’t have the luxury of deep pockets and massive customer reach to experiment freely with loss-leader offers. For independent stores or mid-sized local chains, data-driven strategy is essential to avoid costly missteps.
Instead of launching an all-encompassing subscription programme, smaller businesses can take a more cautious, insight-led approach:
Data is a powerful currency, especially for smaller businesses aiming to compete in a crowded market. By leveraging predictive analytics and listening to what the data reveals, businesses can:
One of the most transformative tools available to small and mid-sized businesses today is the power of AI and machine learning. These technologies help businesses automate demand forecasting with remarkable accuracy, reducing the risk of loss-leading experiences and optimising profitability. By analysing historical sales, customer behavior, and external factors like seasonality, AI-driven models can predict demand more precisely than traditional methods.
For businesses considering a subscription model, this kind of automation ensures:
By embracing machine learning and AI, even smaller businesses can gain the sophisticated insights needed to make subscription models profitable without relying on guesswork or costly trial-and-error.
Testing a subscription model doesn’t have to mean high upfront costs or long-term commitments. Instead, start small, listen to what the data tells you, and refine your approach. With the right strategy, even local cafes and bakeries can build sustainable, customer-driven subscription programmes that drive growth and profitability.