Vape Subscription Service: Vape Pods Delivered to Your Door – How to Conquer the “Last Mile”?
Vape Subscription Service: Vape Pod Delivery to Your Doorstep – How to Conquer the “Last Mile”?
This model encourages consumers to purchase more nicotine products and prepay in advance, raising the question: does it contradict the original intention of introducing them as "harm-reduction products" to British society?
The days when milk and newspapers were delivered to the door each morning seem like they were just yesterday. However, the delivery person is now more likely to be an employee in a DPS uniform or a freelance courier driving a private car. And when it comes to "subscriptions," the younger generation probably thinks first of Netflix and Spotify.
But subscription services are not limited to these. Now, even vape pods can be delivered to your home.
Recently, the reporter discovered that British American Tobacco’s vape brand, VUSE, has launched a "subscription" service in the UK. Promoted under the slogan “Buy More, Save More,” the service is divided into three tiers: “Bronze” (5-9 pods per month), “Silver” (10-14 pods), and “Gold” (15-30 pods). The prices are £5.79 (about $7.36), £5.29 (about $6.72), and £4.79 (about $6.09), respectively.
VUSE has also rolled out a similar "subscription" service in Canada, offering 15-30 items per month with a potential savings of up to 35%.
VUSE’s subscription plans in Canada are divided into three tiers: “Standard,” “Extra,” and “Premium.”
The standard plan for vape pods is 5-9 pods per month, priced at CAD 13.11. If you opt for the highest tier (15-30 pods per month), the price drops to CAD 11.36.
Unlike in the UK, the Canadian market allows for disposable products in larger quantities. For example, the VUSE GO EDITION 5000 disposable vape subscription has a standard plan of 5-9 units per month, priced at CAD 19.49, with the price dropping to CAD 16.89 for the highest tier (15-30 units per month).
Similarly, the subscription for the VUSE GO XL disposable product has a standard plan of 5-9 units per month, priced at CAD 14.99, and the highest tier is priced at CAD 12.99 for 15-30 units per month.
Additionally, there is a more affordable option, the VUSE GO disposable product. The standard plan is 5-9 units per month, priced at CAD 7.49, with the price dropping to CAD 6.49 for the highest tier (15-30 units per month).
Both in Canada and the UK, the subscription process is said to be very simple. Consumers can select at least 5 vape pods or disposable products from the month’s available items and add them to their cart. The subscription can be paused or canceled at any time, and the product type can be changed before shipment.
The Purchasing Power of Suburban Areas
The UK and Canada, both of which offer VUSE’s subscription services, have urban layouts that differ slightly from China’s. In the suburbs, a large group of middle-class people with considerable purchasing power reside. According to 2015 statistics, 55% of the population in England and Wales lives in suburban areas.
This creates a “market for essential goods that require a certain level of logistical capability.” Take the UK as an example: suburban residents’ daily supplies, including fruits, vegetables, fresh produce, and daily necessities, are covered by Amazon and local convenience stores. Subscribers order items online, and these businesses ensure that the goods are prepared at the nearest distribution center, awaiting pickup by local couriers. Notably, compared to full-time employees, delivery services have increasingly been crowdsourced to freelance couriers with private cars, with payment calculated per delivery.
While no matter how large the brand, even a leading vape product can’t compare to Amazon in terms of delivery volume, the latest statistics show that 10% of the UK population regularly or occasionally uses vapes. The market value of the new tobacco sector was estimated at $2.05 billion in 2022. Given the suburban population and its purchasing power, the business opportunity in suburban areas could be at least £1 billion, with great potential. The entire delivery method and logistics chain could also provide valuable reference for brands considering introducing a subscription model.
For the vape industry, this sales model represents a potential cost-control channel. First, compared to retail stores, it avoids rent costs. Second, compared to online retail, it offers relatively stable control over inventory turnover: shipment schedules and demand quantities are known in advance, allowing companies to optimize their purchasing and staffing arrangements.
“Essential Goods” Without Expiration Dates
Although vapes, like fresh food, are consumables, vape juice doesn’t have the same urgency in terms of expiration. It’s perhaps more appropriate to compare it to everyday products like toilet paper, cleaning supplies, and consumables: there’s a regular demand, but freshness isn’t strictly required. These everyday products are often sold through subscription services that deliver the same product on a regular basis to meet predictable, low-flexibility needs.
Not only can content products like audio-visual media, knowledge, and apps be subscribed to, but now even industrial products like machinery and flooring, as well as daily goods like razors, diapers, and cosmetics, can be subscribed to. According to statistics, subscription-based businesses have seen revenue growth more than eight times that of S&P 500 companies in the past six years.
However, the subscription model is not just about changing the payment structure; it also requires a shift in business operations and mindset. Unlike the traditional focus on product manufacturing and sales in a linear point-to-point transaction model, subscriptions establish a cyclical, dynamic relationship between companies and subscribers. Subscription models, combined with data collection and analysis, allow companies to better understand consumer profiles, gain insights into customer needs, and provide corresponding services, leading to a better consumer experience.
“One-off purchases, whether in-store or online, are just that: a one-time deal,” said one industry insider. “But with a subscription, you’re already in the process of repurchasing, meaning the brand has already won part of the customer’s loyalty.”
In the past, factors influencing consumer purchasing decisions were primarily the product’s functionality. Today, consumers are more focused on the additional value a product can offer. Consumer purchasing behavior has shifted to be more self-centered, leading to the rise of subscription models in the market. The transformation from one-time purchases to long-term relationships with subscribers is the true picture of digital transformation.
Moreover, the predictable and waste-free closed-loop logistics model not only offers convenience to consumers but also provides an environmentally friendly solution. This aligns with the growing emphasis on corporate ESG practices, leading some industry professionals to view subscription models as a promising future trend.
How to Cover the “Last Mile”
Returning to practical concerns, the biggest challenge for the vape subscription model will be warehouse and logistics network management. In the UK, subscriptions require reliability. While British American Tobacco may have the capacity to manage multiple warehouse locations, smaller brands may struggle in the early stages to maintain more than one inventory point or an international shipping warehouse.
Another issue is customer data management. Some consumers may not want their nicotine consumption to be known by others. Managing subscriber information and ensuring privacy protection, a new challenge for the tobacco industry (whether traditional or new tobacco), needs to be addressed.
A further concern is the barrier to entry. Transitioning from single-product purchases at convenience stores, retail outlets, or e-commerce platforms to a fixed monthly payment and product delivery may seem like a high barrier. Vaping is not a product that requires extensive research to make a purchase. Under the subscription model, consumers expect a more personalized experience. VUSE’s “customizable combination” feature captures this need. Looking at popular snack subscription models in Taiwan, which offer “random new products,” might provide additional freshness for subscribers.
However, while offering personalization, this subscription model introduces a kind of barrier—a low wall that consumers must cross to make a purchase. The challenge for brands remains: how to encourage consumers to take the first step toward subscribing. No matter how easy it is made to sound, registering as a member and paying in advance are still considered “extra steps” by buyers, significantly lowering their willingness to purchase. Balancing these factors remains to be seen.
The reporter attempted to inquire about the performance of VUSE’s subscription plan since its launch, but had not received a response from British American Tobacco by the time of writing.
Returning to the core issue, the subscription model itself is a bulk purchase where subscribers commit to purchasing more than their immediate needs to get a lower price per unit. In exchange, businesses offer a portion of the gross profit in exchange for subscriber loyalty and relatively stable purchase frequency and volume.
However, this core concept of “loyalty” brings up another paradox: in the UK, as a “nicotine harm-reduction product,” the ultimate goal is to help smokers who previously consumed cigarettes quit nicotine dependence using new tobacco products. But with VUSE’s UK subscription plan, the minimum quantity is 15 pods per month. Based on a nicotine concentration of 10mg/mL and 2mL per pod, this results in a monthly nicotine intake of 300mg, which is hard to argue as being within a healthy range.
This marketing tactic of encouraging consumers to purchase more nicotine products and prepay raises the question: does it conflict with the UK government’s original goal? Will it spark a new round of debate in British society once the volume increases?
The reporter will continue to track the development of subscription-based sales models for new nicotine products.