‘Not Going Away’: Entering the Subscription Market During COVID-19
Founded in 2017 by Joseph Chaeban and Darryl Stewart, after the two entrepreneurs met at a group formed in response to the humanitarian crisis in Syria, Chaeban Ice Cream makes premium ice cream created with fresh and local ingredients and an eye toward sustainability.
Like many businesses, the Winnipeg, Canada-based company reexamined operations when COVID-19 forced its storefront to close. It instead implemented a monthly ice cream subscription club, and the response has been overwhelming, Stewart tells CGT. Its success has even enabled Chaeban to expand into selling artisanal cheese at retail.
We put some questions to Stewart to learn more about what it’s like to enter the membership market and the tech it’s using to grow.
CGT: An ice cream subscription service seems like quite a logistical challenge. How do you manage it?
Stewart: We have found a way to deliver our ice cream economically, pay our employees a fair wage — we employ four delivery drivers — and keep customers’ freezers stocked until next month’s delivery. We committed to a hefty delivery management software system and our first IT person, which makes it possible for us to map out routes more efficiently and effectively, along with being able to communicate with customers about delivery.
Being able to connect directly with our club members — through emails about delivery dates and time, and text message while the drivers are on route — has been an important part of the delivery systems’ success. In January, delivering ice cream is a little easier because in Winnipeg’s winter you can leave it on the doorstep, but for the most part we need customers to be home to receive delivery.
To allow time for production and to provide steady jobs for our delivery team, we often need to spread the work out over the whole month. We have discovered that our customers are remarkably flexible and willing to be part of this idea if we communicate with them and are responsive to their needs, whether it’s switching a delivery day or time.
CGT: What prompted you to partner with Bold Commerce? What were the goals?
Stewart: We knew we wanted to use Shopify for our base e-commerce system, but it didn’t offer the services we needed to manage monthly subscriptions. Luckily, we connected with Bold Commerce, who was a well-rated companion option to Shopify in the app store, and also happened to be a Winnipeg-based company.
Bold Commerce’s Build-a-Box Subscriptions works perfectly with our needs, like auto-billing customers at the beginning of the month, allowing customers to select the flavors they want for that month’s subscription, and ensuring customers’ credit card information is secure. It helps us to not worry about the backend of the business as much and lets us focus on making and delivering ice cream.
CGT: How have operations changed as a result?
Stewart: We have gone from producing pails of ice cream to scoop out to people in person, to making pints to deliver to their door. This has meant not only utilizing different equipment — such as a pint filler machine — but working out the logistics of filling jars and getting them out the door.
The area in the shop where people once sat, eating ice cream flights and sipping coffee, is now our production area. And since we’re creating a lot more volume of product — we’re producing all 16 flavors more often than we did before — we’ve had to figure out way to store the ice cream. We’ve had to rent off-site frozen storage in this regard.
CGT: Which business functions have most benefited from the implementation?
Stewart: We now have more consistent revenue with the ice cream club subscriptions. Ice cream to some extent is a seasonal product — of course there’s going to be a spike in sales in the warmer months, and a slowdown in colder ones when you run an ice cream store.
It has also created stable employment for our team. During a time when many businesses are laying off staff, we have been blessed with the ability to bring on people both part time and full time to provide meaningful employment.
And we’ve developed a much deeper relationship with our customers. Through their orders, the feedback at drop-off, and through communication with club members, we’re truly getting a sense of what they like, don’t like and what we can improve on to make their Chaeban experience better.
For example, we’re now making a new non-dairy flavor every month, in addition to our usual dairy flavors, because more people are looking for those options. It’s given us an opportunity to listen to our customers and do something about it.
CGT: What have been the benefits? How are you measuring success?
Stewart: We have been overwhelmed by the response to our subscription business. When we first launched the ice cream club, we hoped 150 people would join, but many times more than that signed up for two pints of ice cream to be delivered to their door, for free, each month.
In fact, thanks to the club and wholesale, this will be the first year in our three years of life that we will break even, with owners all paid a proper salary.
The club has also blessed us with something to do when many other local businesses are idle. We have a purpose beyond trying save our business; we are bringing something fun and joyful right to people’s homes during a challenging time.
CGT: Has it helped you manage or navigate the unprecedented consumer demand shifts during the health crisis?
Stewart: The ice cream club has helped us to continue to provide our customers with the products they love but in a safe manner — they can stay at home and still get ice cream. We’ve heard so many times how the ice cream drop off is the highlight of someone’s day; we see a lot of happy faces and get a lot of waves from windows.
We’ve also put a bigger focus on wholesale. So if customers are going out to get their essential items, our products are in store for them.
CGT: What best practices can you offer to consumer goods companies looking to reach consumers in new ways during this new consumer landscape?
Stewart: Try a subscription product; this format is not going to go away. Even if things get “back to normal,” we plan to continue to offer our ice cream club subscription. Most of our consumption is predictable so I think a lot of people have realized the benefit of having a product they buy on a regular basis delivered right to their home, every month, without thought.
We even plan on customizing our subscription offerings further. We have smaller sizes of ice cream — called Booza Bites — and recently launched an artisanal cheese line, so we’re looking at offering different levels of subscriptions or ways customers can modify each month’s subscriptions with ease.