Chester-based digital retail specialist Sherwen Studios is urging retailers across the North West to review their retail subscription strategies following new government guidance.
The new guidance relating to the Digital Markets, Competition and Consumers (DMCC) Bill will give the Competition and Market Authority will new powers to deal with issues such as ‘subscription traps,’ fake reviews and pressure selling. Not only will the CMA be able to decide if or when consumer law is broken, but they will also have the power to fine businesses up to 10 per cent of their global turnover.
So-called subscription traps, where customers find themselves locked into an online auto-renewing subscrition either without realising or without knowing how to cancel, have long been a serious issue for consumers. Citizens Advice indicated in December 2022 that “half a billion pounds has been spent on subscriptions that auto-renewed without people realising in the last year.”
In its new white paper, The Future of Subscription Commerce is Up for Renewal, Sherwen Studios, which works with brands such as ScS, Booker and Londis, is urging businesses running subscription box services, whether for craft-related goods, coffee, clothing, tickets and other activities to focus on their cancellation policies as a priority.
Failure to do so, or investing in auto-renewal technologies, could not only put only put customers at risk of financial harm but could cause those retailers to fall foul of the government’s new plans.
Matt Sherwen, owner of Sherwen Studios says: “We know that our region is packed full of amazing local retailers. There have been some great success stories of retail brands and start-ups who have turned to subscription box forms of commerce because it’s a genuinely great way to attract new customers. We saw through the pandemic how quickly subscription commerce took off, and many customers still rely on their subscription boxes to try new products or align with a hobby or interest. But too many shoppers tell us that that they find it far too complicated to cancel their subscriptions, which is why the government is being forced to act.”
He added: “As a local business ourselves, we always advocate for best-practice, and while technology is there to automate and make our lives easier, it doesn’t always catch up with legislation and customer care. If you haven’t checked to see how easy it is for a shopper to cancel, you could be running the risk of a huge fine once the DMCC Bill comes into effect. Therefore, now is the time to be proactive and review your subscription packages to make sure that you are protecting yourself, and your customers from any financial harm.”
