There was a time when subscriptions services were related to gym memberships and monthly newspaper distributions. But today, subscriptions are available for everything! 

From SaaS companies to subscription boxes, the subscription business is growing at a significant rate and there are no signs of falling. 

Due to the pandemic situation, a majority of people found themselves spending their whole time at home. Due to this, the shop owners in the eCommerce subscriptions services niche saw a dramatic uplift in their sales and revenue.

Because of their effectiveness, subscriptions services became one of the eCommerce Trends shifting retail services.

For some businesses, the uplift was higher than expected while for others it was a bit harder.

A recent study found out that a huge number of subscription stores joined the market with over 90% Y-O-Y growth.

Source, 2020

During this time, there was repetition in sales because passive buyers turn into active ones. In simpler terms, online transactions changed into long-term relationships- major thanks to Covid-19.

Subscriptions offer your business to know the faithful customers over time. Because of this, assisting them in a better and honest way becomes super easy. Through delivery skips, upsells, cross-sells, etc. the flexibility and customization power of subscriptions provide benefits for store owners and clients. 

Want to dive into the eCommerce world of subscriptions and explore the way to uplift your brand? So, here’s all the vital information that you need to know about subscriptions services.

Subscriptions Definition

eCommerce brands continuously explore various options to offer recurring services to their customers in exchange for higher growth and lifetime value- LTV along with reducing customers and revenue churn. Where it was previously difficult to build long-term continuous relationships with customers, today with the use of subscriptions more customers engage for a longer duration. 

So, what exactly are eCommerce subscriptions? 

Well, the subscriptions’ meaning is simple! 

When businesses make continuous sales from the customers against the products or services, they are presenting subscriptions services. 

This service or a set of products is offered on a regular daily, weekly, monthly, or yearly basis. This gives customers access to a specific product or service and in exchange, provides a loyal customer to a brand. 

Demo

The most popular subscription websites are:

  1. Arbor Teas.
  2. NBA Thunder Shop.
  3. Atkins.
  4. New Chapter.
  5. Fresh Fronks.
  6. Spinning.com.
  7. Sincerely Nuts.
  8. NuSocks.
  9. Fine Taste Club.
  10. Beer Cartel.
  11. Hawaii Coffee Company.
  12. Marquis Wine Club.
  13. Babeths Feast.
  14. Invader Coffee.
  15. Give Black Box.
  16. Flucker Farms.
  17. Lexli.
  18. Savor Beauty.
  19. Nutragen.
  20. Enertion Boards.

Subscriptions services include various verticals like Food & Beverage, Beauty & Personal Care, Home Goods, Fashion & Apparel, Health & Wellness, Hobbies, etc.

Types of eCommerce Subscriptions Services

Ecommerce subscriptions services can be categorized into three different categories: Auto-Ship subscriptions, Curated Subscriptions, and Access subscriptions. Let’s have a broader look into them to understand their differences and benefits for both eCommerce merchants and online customers.

Auto-Ship Subscriptions  

Making 32% of overall market subscriptions, Auto-ship subscriptions are the most common and are generally enforced to offer ease to customers. These subscriptions services are also known as replenishment or “subscribe-and-save” as they provide discounts and offers to customers who wish to receive the product regularly.

Auto-ship subscriptions services include regularly used products such as deodorants, vitamins, skincare items – Chewy & Dollar Shave Club are perfect examples.

Chic Pipsqueak is a great example of subscription boxes for women.

In this kind of subscriptions services, customers choose the desired item(s) they wish to receive, and then set its delivery frequency in days, weeks, or months. The site automatically generates orders; hence saving time and energy of visiting the store again and again.

Curated Subscriptions  

Curated subscriptions services were the first to market in the recurring subscriptions market and counts for 55% in popularity. This method was popularized by giants like BirchBox, Blue Apron, and now many more brands are in the league of joining them. 

Source

These are the kind of subscriptions to gift. Simply add their mailing address and the store will deliver at their doorsteps. 

With curated subscriptions, customers directly receive new and curated subscription boxes each month, with a new item every month. These subscriptions or “boxes” work very well for the people interested in the product types –

Beauty products, food, snacks, meal kits, stickers, books, etc.  

Access Subscriptions  

Access subscriptions services are less prevalent than Auto-ship and Curated Box subscriptions, but they are no less important. They offer repeated billing cycles to give the service access to the clients. 

The perfect example will be Amazon Prime, where a client is charged yearly to avail free shipping and entertainment features. 

they are also available on Educational sites, Professional Associations, and even Retail Distributors willing to offer clients best encounters. 

Some prominent brands offering such subscriptions services include Netflix, LinkedIn Learning-Lynda, Spotify, HubSpot, Masterclass, and many more!

Numerous brands/retailers are discovering inventive approaches to offer all three kinds of subscriptions to their clients, expanding reliability & income. As the pattern proceeds and merchants continue to use the subscriptions services to draw in and hold clients, it will be intriguing to perceive how they change to meet both merchant and client needs.

Now, let’s understand how these subscriptions are beneficial for an eCommerce store.

Benefits of Subscriptions Services

Now that we know what type of eCommerce subscriptions are available in the market, it’s time to dig into their benefits. We must also know how these subscription services can be important for us and our business.

So, here are some of the prominent benefits of using subscriptions services: 

Increase Acquisition 

Recent studies show that new clients are joining the subscription plans at exceptional rates. 

Source

By their nature, eCommerce subscriptions services have many worthy features to draw in new clients, including incentives, convenience, entertainment, etc. Because of their extraordinary capacity to build client relationships with the repetitive idea of availing service, subscriptions have special freedoms to expand their acquisitions.

Those with solid networks can leverage positive feedback, boost engagement on online platforms & even powerhouse content to attract new clients. 

Also, because such organizations can examine their subscribers’ behavior over the long run through analytics and other mechanisms, they have the chance to more successfully target their acquisition endeavors for potential clients.

Increase Retention

As the subscribers’ rate increased dramatically in 2020, so did the lifetime value (LTV). The ReCharge report saw an average LTV development of 11% in 2020. All in all, subscribers are spending more on the utilization of the service/product before they terminate it. 

A significant opportunity for online stores to expand loyalty and lift retention lies in their customization. 

28% of curated & access subscribers said the main reason to remain with membership was having a customized insight- McKinsey study

This can incorporate everything from customization of product decisions, (for example, exchanging product with another or adding a one-time add-on purchase) to contact options, (for example, having the option to enable SMS alerts), etc. Engaging subscribers to customize subscriptions services expands trust in the business and keeps them for longer.

Make Predictions Easier 

The regular nature of subscription deliveries and payments provides ample benefits to both merchants and customers. Based on the scheduled orders and payments, it’s pretty possible for the merchants to easily forecast the revenue stream. 

Subscriptions services make the predictions accurate and in turn, benefit the merchants in keeping their inventory and supply chain up-to-date.

Their continuous nature also means that they’re a valuable tool for analyzing product performance and consumer behavior over time.

If subscriptions services offer reliable data and analytics, brands can refine their KPIs over time and reach customers more effectively.

Create a Stronger Brand Presence

Because of their potential to analyze client behavior and product functioning, subscription businesses are interestingly capable of making solid brand networks. This kind of involvement offers numerous advantages for subscriptions that can eventually assist with scaling the brand.

Brands can draw in new clients through current community members who leave positive feedback and connect with the brand via social platforms. These not just encourage brand loyalty and expanding lifetime value, yet in addition make significant feedback loops to enhance subscription offerings.

Also, when brands communicate with local area individuals who draw in via social platforms, they convey a message that they are available and ready to deliver a solid client service experience.

Challenges of eCommerce Subscription Services

While setting any new feature in your eCommerce platform, it’s pretty obvious that certain challenges will be making the task difficult to conduct. Here are some of the challenges faced by merchants while using eCommerce subscription services:

Finding Uniqueness in Subscription services

The main challenge while using eCommerce subscriptions services is to differentiate yourself from others. Subscriptions are generally similar in every brand but making it unique so that new customers join is a difficult task. You have to find unique ideas so that more people subscribe to your products and services.

Thinking of plans and features that your competitors lack is a big task; but not impossible. You have to bring innovations and follow agile principles to differentiate yourself from others. 

Offering Customized Experience to all

Another difficulty faced by the merchants while using subscriptions services is to offer customization solutions to all. It’s quite challenging to meet the demand of everyone; especially when your product categories are lower. 

But that’s what a customer demands- offering him personalized experiences will embrace your brand. Therefore, you’ve to find such solutions that will meet the needs of every customer.

Best Tips to run eCommerce Subscriptions Services

No matter what company or niche you’re holding or what’s your target audience, it’s important to follow certain crucial tips for using eCommerce subscriptions service. So, here are some of the best tips and tricks to follow eCommerce subscriptions service: 

Keep Track of everything

Before and while you run an eCommerce subscription service, make sure to analyze your KPIs and other important data. You must know your audiences’ behavior, product demand, and engagement habits. If you’re not tracking your customers’ behavior on a regular basis, then you are intentionally lowering your score.

Crucial metrics to analyze data and other vital information are:

  • Customer Lifetime Value (LTV)
  • Average Order Value (AOV)
  • Customer Acquisition Costs (CAC)
  • Rate of Attrition or Customer Churn Rate
  • Website Traffic patterns, etc.

Due to their recurring nature, merchants can continuously evaluate the user data and can further create more in-depth personalization options.

Right eCommerce platform for subscriptions

There are a plethora of eCommerce platforms available in the market such as BigCommerce, WooCommerce, Shopify, etc. and each of them is suited for different needs. Perhaps having so many options it can be hard to know and choose the right one that correctly suits your subscription requirements. 

Are you planning to run a simple monthly subscription box offering? Is it accurate to say that you are searching for a specialty custom headless form? Or are you hoping to carry out an omnichannel plan of action, where clients are getting something very similar, a great brand experience whether they are buying from your site, from a social platform, or in a physical store? 

What will your estimating model be? What payment gateway methods will you be using? 

These are significant questions to know when planning to go ahead with a subscription-based model. You need to discover the eCommerce strategies that’ll turn out to be best for you. Along with this, you need to know which eCommerce platform will allow such features. 

For instance, for merchants who need to offer an omnichannel business model, BigCommerce is an optimal eCommerce platform. Their four pillars of omnichannel achievement (sales channels, marketing and advertising, operations and fulfillment ) permit you to meet your clients where they are. 

Do your platform exploration prior to focusing on a subscription business and track down the one that best suits your requirements.

Automatic Payments and Auto Renewals

Subscriptions work very well if you have a feature of automatic payments and auto-renewals. This not only saves the time of a customer but allows him a smooth and better subscription experience. 

Along with this, make sure you allow multiple payment gateways to offer convenience to customers and stop them from leaving. 

Incentivizing autopayments offers the clients ease and enables your business to more precisely predict the upcoming revenue streams. You can incentivize subscription products and auto payments over one-time purchases with discounts or bundle deals. 

Alongside, auto-renewals help to save your business and boost customer engagement. Perhaps, it’s quite devastating if you lose a loyal customer just because they forget to place an order or their card has expired. Auto-renewals give a pleasant and smoother experience to customers and hence boost your sales. 

Plan before you head

No doubt, subscriptions in the eCommerce business are soaring high and there’s no sign of dropping down. However, such a rate doesn’t guarantee your success.

To be successful you must have a business plan and make sure your plan balances with the subscription model. Not every product can be used as a subscription model and not every niche can generate recurring subscribers.

So, make sure your subscriptions are providing the right services to your business’s long-term goals. 

Bottom Line

It’s clear that eCommerce subscription business models can take endless forms and can offer enormous advantages to merchants and customers. When considering subscriptions for your business model, get to know your customers as deeply as you possibly can. Also, don’t forget to track your earnings over time and alter your services to meet client’s requirements. The smoother you can make your client experience, the happier — and more loyal — your buyers will be.