There have been many changes to the eCommerce landscape over the last 20 months. Purchasing habits that were once rare and occasional just a short time ago are now considered routine. Prosper Insights and Analytics released a survey that showed that nearly half of all adult respondents reported that new shopping behaviors were becoming “recurring habits”. The portion of the market that has benefited the most from this shift are eCommerce merchant Subscription offers. The Subscriptions market for physical goods has grown 90% since the start of 2020. It’s not like Subscription services are a ‘new’ thing, they have always been a growth tool. But new market pressures, an emphasis on customer retention and technological advancements have made the Subscription model and service not only more functional but desirable for both merchants and customers. In this blog we’ll dive a little deeper into the Subscription model, why now is the time to implement this shopping tool, what customers expect and how to deliver on those expectations on a regular and consistent basis.
There’s no time like the present
Simply put, millions of Americans go online to purchase their everyday needs and your site’s user experience needs to be as frictionless and personalized as possible so you can provide your share of needed products. For years now, customers have shown a willingness to purchase digital subscription products. Think Netflix, Spotify and even Patreon.. This boom in subscription digital products has now begun to bleed into physical goods. Whether due to the pandemic, the shifting needs of consumers, technological advances or some combination of the three, customers now want the products they rely on, delivered on a repeat basis without the need to ‘checkout’ each time. If you don’t already offer any sort of subscription service it’s only a matter of time before it becomes crucial, and odds are your competitors are already experimenting, if not already completely committed to Subscription services sales.
Subscriptions unlock long term growth
Targeting and acquiring customers has and always will be a struggle. It’s hard enough as it is but Apple’s recent changes to their Privacy agreement has made it even more difficult to identify and capture prospective customers. Brands everywhere are taking a second look at their customer engagement strategy. Brands of all sizes face the same challenge: they are spending tons and tons of advertising dollars attempting to get customers to discover and love their product but not being able to convert that first purchase into a second or third. It’s a bit of a leaky bucket and a lost opportunity, as there is a chance there to retain that customer and encourage additional sales. Offering a Subscription service can patch that hole in the bucket and launch a long-term relationship with your customers. For any eCommerce brand that wants to get serious about driving incremental LTV and growth, subscriptions (whether it be subscribe & save, membership, pure-play subscriptions) are probably the most effective way to maximize their investment into customers to date.
What trends are we seeing from shoppers?
The modern customer expects brands to know them on a personal level, while not being ‘too close’. You need to be able to personalize their customer journey while not encroaching on their privacy. It’s a very fine line to walk and starts with understanding how customers want to shop. A Subscription service allows your customers to dictate the terms of agreement (price, timing of delivery, quantity) which is extremely empowering from their perspective and infinitely valuable to your brand. By purchasing a subscription service your customers are telling you exactly what they want from you, how many they want and when they want it. This arrangement not only pays financial dividends to you immediately but it also provides you with vital information you can use to better plan for future products, product launches, offers, demand planning and inventory management.
Even if your brand does not identify as a ‘Subscription’ business and it’s not something you have ever offered before, subscriptions are an engagement lever that is now more widely available due to improved technology, as you are now seeing physical-goods subscriptions being offered in every industry and vertical. From clothing to beauty products, to pet care and food, subscription services are now becoming the standard.
Subscription services offer long term revenue streams, establish long term customer relationships, establish and open channel of communication and give you the ability to better understand customer needs and order patterns.
How should your brand think about subscriptions?
We want to debunk the myth that Subscriptions for physical goods aren’t just for “box” businesses. With the advent of new extensions and tools, Subscription services can now be added to any brand’s business model. Whether you are new to Subscriptions, rapidly expanding or Subscription-based only there are a world of options open to you. It’s important to remember that Subscriptions shouldn’t be a gargantuan task, requiring new customer support or dev team members. It’s another tool in your tool kit that, if set up and maintained properly, can provide you with a steady stream of income and amazing insights.
Bringing it all together
While technology has made it easier to build and fulfill a Subscription service that will appeal to a wide range of users, it’s still no walk-in-the-park to long term financial success and stability. It is of utmost importance to build a Subscription model that fits your products and margins. And, perhaps most importantly, have the structures in place to fulfill these recurring orders. Good news is, we’re experts in this field. Contact a member of our team today and let’s figure out a plan that works for you.