Case Study: Paceheads - The Journey to Offering Sports Equipment in a Subscription Model.

In the dynamic landscape of fitness and sports, the traditional approach to acquiring sports equipment is undergoing a revolutionary transformation. The rise of sports equipment rentals on a monthly subscription basis is reshaping how enthusiasts access and experience high-quality gear.

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Enter Paceheads - a customer-centric business model that prioritises flexibility to explore, test, and enjoy a variety of sports equipment before buying them.

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About Paceheads

• Industry: B2C
• Founded: Mid-2018
• Business Model: Sports equipment rental on a subscription basis.
• Founders: Franz Bayer & Fabian Helbing
• Location: Hamburg (Marketing) and Göttingen (Warehouse and Support).

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Business Model

Paceheads challenges the status quo of how individuals interact with and acquire sports gear. The Paceheads subscription service allows subscribers to not only to test but to truly experience high-quality sports equipment at home before making a commitment. This isn't merely a business model; it's an invitation to a new era of exploration and discovery.

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Paceheads’ subscription service allows customers to rent premium sports equipment for up to 12 months, creating an environment where trying new things is not just encouraged but made effortless. Customers can leisurely test devices, ensuring they align with their fitness goals and preferences before deciding to make a purchase. The beauty lies in the flexibility—after the trial phase, devices can either be adopted permanently or gracefully returned.

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See the illustration below to understand the subscription-based business model of Paceheads.

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Commitment to Sustainability

Acknowledging the environmental impact of high return rates in retail, Paceheads has crafted a solution where unused products find a second life. Returned devices are meticulously processed and offered in their shop at reduced prices, reducing carbon footprints associated with returns.

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Challenges Faced by Paceheads

While the practice of selling products online aka e-commerce has been perfected due to its decade long inception, renting products such as sports equipment on a monthly subscription basis was a relatively new concept in 2018.

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The typical path that every aspirant company then took was to rely on ecommerce solutions to do the trick. Due to the absence of dedicated solutions, Paceheads faced multiple operational challenges.

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Soon it became clear that the logic of managing subscription operations is simply not supported by existing ecommerce solutions.

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Challenges & Solution

circuly provided tailored solutions to Paceheads' challenges:

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Challenge #1: Manual workload

Paceheads struggled with the manual workload associated with subscription operations. Since there was no tool to automate basic operations, Paceheads had to undertake everything manually. This involved operations such as tracking orders, manually initiating product delivery, manually creating, maintaining and ending subscriptions, tracking products return dates in spreadsheet etc.

Solution: Automated processes

circuly significantly reduced manual labor by offering dedicated processes for typical subscription operations, minimising the need for manual intervention by up to 90%.

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Challenge #2: Easy onboarding on new team

Paceheads needed a transparent system for operations that was easy to maintain and was easy for new employees to manage. Existing solutions had a steep learning curve that made getting the team up to speed challenging.

Solution: Knowledge base and onboarding flows

circuly provides a dedicated knowledge base that makes it easy for new employees to get on board with specific operations of a subscription business and subscription management with circuly.

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Challenge #3: ‍Complex subscription model

The company's unique subscription model required special adjustments that other software solutions couldn't handle.

Solution: Unique features to match complexity

circuly offered unique features that aligned with Paceheads' complex subscription model, addressing specific needs that other solutions couldn't.

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Challenge #4: Rental Order Management

Handling rental orders, especially tracking processes through Google Sheets, posed scaling and growth challenges.

Solution: Seamless Integration with Shop System

circuly seamlessly connected with the shop system, eliminating the need for manual order management. Operations related to order management and product delivery are fully automated by circuly and run like clockwork. Additionally when there is any disruption due to delay in delivery, circuly provides features that make it possible to adjust various subscription elements such as subscription start date, recurring payment schedule etc. and thus enhance customer satisfaction.

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Challenge #5: Customer Journey and Asset Management

ecommerce solutions like shop systems operate on a sales-flow, that is the operations are designed to take care of activities leading to a purchase. But subscription-based ecommerce goes beyond that. Paceheads desired a smooth end-to-end customer journey, that started with order but continued beyond product delivery.

Solution: End-to-End Customer Journey

circuly closed the loop of the customer journey, automating common operations such as payment processing, invoicing, email communication, and reminders. This ensured a streamlined process from order placement to product return.

The Benefit

By leaving the operational side of running a subscription business to circuly, Paceheads can fully concentrate on growing and scaling their subscription business and bringing new value proposition to their customers.

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