E-Commerce With Subscription Model

E-Commerce With Subscription Model

Brands are developing new strategies and e-commerce changes day by day. The subscription model is one of the rising trend of e-commerce as well. Brands’ goals are turning consumers into customers, but now they are aiming to turn customers into subscribers. The e-commerce subscription model pays attention as a business model which gives opportunity to customers about constant subscription for the products and services they need. It is predicted that until 2023, 75% of the brands, selling directly to the consumer, will offer subscriptions. (Shopify)

What are the types of e-commerce with the subscription modal? 

McKinsey divides subscription systems into three groups:

  • Subscription for replenishment
  • Subscription for curation
  • Subscription for access

Subscription for replenishment

If your products are required by customers regularly, subscription for replenishment e-commerce system can be a profitable method for you. For example, if you are selling coffee, water, cleaning or personal care products, you can increase the number of your loyal customers with the subscription system by offering advantages, such as discounted prices, free shipping, etc. 

Amazon’s Subscribe&Save program, one of the most successful examples of subscription for replenishment in the world, offers %15 discount and free shipping for everything that will be needed regularly at home or at work. For instance Dollar Shave Club, makes millions of dollars turnover through delivering personal care products, especially razor blades, to users with affordable prices. 

Subscription for curation

Another subscription model is subscription for curation; users know the category of products they will receive, but they have no clear information about the products. The customers’ main motivation is let themselves happy and surprised. Apparel, accessories, cosmetics, snacks, books and hobby supplies are very suitable for this subscription model. Sending / Packing personalized experiences and making room for expert product selection can help you win the hearts of your customers. For example, monthly box subscriptions which consist of combinations, prepared by the style consultant in accordance with user preferences and seasonal trends, may raise the interest. 

One of the most enjoying example of discovery subscriptions, KiwiCo fits children’s age-appropriate science and art projects in a box. Over 25 million orders, KiwiCo encourages children to build and explore with their families.

As an another example, Horti, one of the plant-friendly subscription models, sends a plant that is easy to grow in the first month to your home. It is there for you with simple suggestions and supports building up permanent habits about plant care. Every month, it knocks on your door with a new plant and introduces you to exotic species step by step for 6 months.

Subscription for access

You can offer various privileges to users through subscription. For example, Amazon, offers access to free shipping, series, movies, and games via Amazon Prime subscription.

Ecommerce ideas for subscription system

  • Healthy snacks
  • Daily diet meals
  • Food preparation kit
  • Seasonal fruits and vegetables
  • Authentic tea or coffee
  • Cat/dog food
  • Cleaning products such as detergent, shampoo, soap
  • Cosmetic products specific to skin types and needs
  • Fresh flowers
  • Toys and books suitable for children’s development
  • Niche products such as records and figures for collectors

What are the advantages of ecommerce with the subscription method?

Shopping with a subscription model in ecommerce offers to users the opportunity of experiencing personalized products at affordable prices. But if you have an ecommerce enterprise or are thinking about getting started, what does the subscription model gain you? 

  • You can predict your income more clearly to make your plan for growing your business up. 
  • In many subscription methods, the fee is paid at once, making it much easier to manage cash flow. 
  • Since you have loyal consumers, you will spend less to gain new customers. According to Shopify, loyal customers spend 67% more than new customers.

Tips for making the most of the subscription model in e-commerce

The subscription model is an attractive ecommerce option due to its advantages. However, you should also keep in mind that there may be subscription cancellations. Let’s review the tips to reduce customer loss and achieve success with the subscription model:

  • If you use the subscription system, you have a long-term relationship with your customers. Evaluate this well, analyze user data, and offer personalized recommendations, offers, discounts. 
  • When choosing the ecommerce platform’s infrastructure, review all options such as Shopify, Magento, WooCommerce and make sure you about right decision, consider your needs for the subscription model. 
  • Encourage auto-recurring subscriptions, so you don’t have to say goodbye to your customers because they forgot to renew their subscriptions. In order to communicate in a transparent and trust-based manner, do not neglect to inform users about the renewal date of their subscription and the amount they will pay by email, notification or SMS.

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