Helmet Subscription Model Surges with Strong Demand

Situation

The company had marketed its high-tech bicycle helmet for several years.

As with all bicycle helmets, once it protect a biker's head at a fall or accident, the product needs to be replaced. The company is preparing to release a new generation of this product and wants to offer it under a subscription model, with regular software updates and replacement hardware in case of a fall or accident.

The challenge

The company wanted to find out several things. Was there consumer interest in a subscription model? What would consumers expect to be included in the subscription? What subscription price were they willing to pay? Did different demographics and those with different use cases have different willingness to pay?

In short, was this subscription model a good idea or not?

Findings

Approximately 20% of the entire market is interested in this innovative product. Those who frequently use their bicycle are particularly interested in a subscription to this new helmet.

Willingness to pay for the monthly subscription is equal to 10% per month of the list price for the product when it is purchased in the retail channel. As this subscription will be sold directly to consumers, circumventing the channel means an ROI of 10 months or less for the subscription option.

Results

The subscription option was just recently launched, and the company reports a higher-than-expected interest and has been forced to set up a waiting list as the supply of the new product is limited.