Tabel of contents
- Subscription commerce - what is selling in a subscription model all about?
- Will the subscription model work in every industry? Types of subscription models
- Subscription model in an online store - where to start?
- How to implement the subscription model in an online store?
- Subscription in an online store - tips&tricks
- Why should you go for a subscription model in your eCommerce?
- Are subscriptions the future of the eCommerce industry?
- Subscription services - platforms where customers receive access to various content or services (most often monthly) under a subscription plan, such as entertainment or educational content (e.g., courses on the Udemy platform). This subscription form is also widely used in the B2B industry, where companies regularly pay for various business services such as software licences or SaaS platform maintenance fees.
- Loyalty programs - within these programs (e.g., Amazon Prime), subscribers gain access to exclusive benefits such as free delivery, discounts, early access to products, or rewards, which builds their loyalty to the brand.
- Product subscriptions - regular deliveries of specific products that customers would most likely order manually by repeating orders. These can be products with a short life cycle, such as food or hygiene products, which are regularly needed. Product subscriptions provide customers with convenience and constant access to necessary items.
- Mystery boxes - customers opt for receiving periodically curated sets of products by the company, not knowing in advance what's inside. This way, they can regularly test new products that they might not notice during their daily shopping but might enjoy (e.g., Goodiebox cosmetics).
- subscription plan management,
- automatic payment processing,
- integration with external systems (e.g., CRM or ERP),
- configuration flexibility and plan personalization.
- Greater revenue predictability - steady inflows of subscription fees allow better financial planning and company investments and ensure a "certain" income,
- Cross- and up selling opportunities - within subscriptions, you can offer additional products and services, increasing the value of the shopping cart,
- Building a strong customer relationship - regular contact with customers through subscription services allows for building a strong bond with customers through constant contact where additional valuable content can be offered.
- Reducing the risk of product backlog in the warehouse - steady demand for products or services within subscriptions helps reduce the risk of excess inventory, which can lead to waste reduction and operational efficiency improvement.
Not so long ago, magazine and journal subscriptions were enjoying popularity. By paying a recurring fixed amount, customers would typically receive a new issue of their favorite magazine every month or quarter. With the digitalization of everyday life, subscriptions have become even more common - now you can subscribe to access various online content such as ebooks, music, movies, and series, thanks to the growing number of streaming platforms. Recently, online stores have also been increasingly adopting this sales model. See how subscription sales online work and what benefits you can derive for your e-business. Tips, advice, and inspiration - it's all waiting for you in this article!
Subscription commerce - what is selling in a subscription model all about?
Although subscription commerce has recently gained the status of an industry phenomenon, the principles of this sales model are very simple. So what is its essence?
The subscription model is a way of distributing products or services that involves ensuring transaction repeatability (both on the customer and seller side). In such an arrangement, the customer receives the selected product or service at specified intervals in exchange for a fixed subscription fee. This not only ensures regular access to needed products or services but also provides the customer with certainty about regular access. For the seller, this form of transaction means greater stability in predicting future income and gathering a steady customer base.
Will the subscription model work in every industry? Types of subscription models
Looking at how the consumer market is currently shaping up, subscriptions are usually associated primarily with streaming platforms, offering movies, series, and music. This is evidenced by the number of Spotify users, the most popular music service, which has already exceeded over 600 million. Meanwhile, about 250 million subscribers watch content on the Netflix platform monthly. However, the subscription model encompasses much more than just this type of offer - subscriptions can cover a wide range of products (from cosmetics to food) and services (from software to entertainment). This makes such a sales format easily adaptable to various industries and customer needs. Familiarise yourself with the four most popular types of subscription models:
Source: Coffee subscription purchase process at incapto.com store
Subscription model in an online store - where to start?
According to the Santander study "Polaków Portfel Własny", as many as 65% of Poles opted for at least one service subscription in 2023. Subscription models also tempt with access to exclusive extras such as discounts and often more attractive prices than for individual purchases (for example, purchasing movies separately rather than within a platform). All these factors indicate that subscription commerce is a sustainable trend worth trying out in your online store. How to start selling in this model?
To begin with, it's worth preparing a strategy tailored to your business. Choose products that will work best in a subscription model and determine the target group of customers. Then set prices and costs. All of this will help not only assess whether a subscription will be a profitable model for your business but also help choose the technological solution best suited to your individual needs.
How to implement the subscription model in an online store?
Moving on, that is, to the technical aspects of the subscription model, it's worth getting to know all available tools that will enable its implementation on your platform. If you use popular solutions like Magento or Shopify, there is a high probability that ready-made plugins or extensions are available to add subscription features to your store. When opting for such a solution, pay attention to features such as:
If your platform does not offer ready-made solutions (or if the complexity of your needs exceeds the capabilities of available plugins), it may be necessary to customise the store by developing your subscription module. In such a case, it's worth using the services of an experienced development team that will be able to create a personalised solution tailored to the specifics of your store.
Subscription in an online store - tips&tricks
Launching subscription sales does not mean immediate success. Moreover, this is just the beginning - to effectively sell in this model, continuous improvement of the strategy and tracking customer behaviour are important. Check out the tips we've prepared for you in this area!
#1 Monitor results
After launching the subscription model, it's worth regularly monitoring its results and collecting data on subscribers and their behaviour. This will allow you to constantly improve the subscription offer and optimise the sales process.
#2 Personalise
Customise the subscription offer to individual customer needs and preferences, providing them with a personalised shopping experience. You can offer, for example, different prices and subscription plan scopes or send personalised promotional offers (e.g., emails).
#3 Clearly define terms
Clearly define subscription terms, including price, delivery frequency, and cancellation rules to avoid ambiguity and frustration. Customers should know what to expect to feel comfortable with the subscription decision.
#4 Don't be monotonous
Introduce minor modifications to the subscription offer to avoid monotony (which can lead to customer resignation). For example, you can change products in subscription sets, offer new bonuses or promotions to maintain subscriber interest.
#5 Make the customer feel special
Provide additional value for subscribers by offering exclusive gifts, discounts, or access to special promotions. This will make customers feel appreciated and more likely to continue their subscription.
Why should you go for a subscription model in your eCommerce?
If you operate in the retail industry (whether online or offline), you know that maintaining customer loyalty can be a challenging task. Introducing a subscription model can significantly facilitate the process of building a steady customer base. By regularly delivering valuable products or services, subscriptions encourage customers to return to your store. Increasing the customer lifetime value (the value indicator illustrating the customer lifecycle) is one of the main benefits of the subscription model, but not the only one. Why else should you choose the subscription model in your online store?
One should also not forget that a subscription offer also brings benefits to the customer such as convenience, attractive prices, or a sense of exclusivity. Such a multitude of benefits makes the subscription model an increasingly attractive option for both entrepreneurs and customers.
Are subscriptions the future of the eCommerce industry?
The increasing pace of life and the widespread tendency to automate many aspects of everyday life mean that more and more customers expect simplification and acceleration of the purchasing process. In this context, the subscription model seems to perfectly meet consumer expectations. It allows for regularly receiving products and services at specified time intervals, eliminating the need to repeat the purchasing process each time. It seems that sales in this model can have a significant impact on the future of eCommerce. However, will it dominate the industry? This will be seen in a few years, but already now it's worth taking advantage of the growing popularity of this trend and using its potential in your online store! Will you decide to take such a step?
