Subscription eCommerce – why it’s the next big thing for retailers

The age of ecommerce subscription is here. As of 2019 more than a quarter of Brits were signed up for a subscription model.

From Netflix and Spotify to coffee delivery and food preparations kits, the subscription business model has become the norm. With the subscription box market alone set to be worth £1 Billion by 2022.

So, let’s dive into subscription eCommerce and take a look at what the future of online retail may look like. 

The subscription ecommerce industry

The subscription model has been around for a little while. For instance, you may remember the likes of Dollar Shave Club, with their unique and attending-grabbing marketing campaigns.

The model offers consumers, regularly cited as young and urban, a personalised, convenient, and low-case option to buy the goods that they need, or that they simply want to treat themselves to on a regular basis.

And the beauty of this model is, as they sign up to a subscription, they barely have to even think about it.

The model is proving a great success. With the subscription e-commerce market growing by more than 100% over the past five years. 

And as subscription eCommerce continues to grow, so do the options that consumers can sign up to. No longer just the domain of food boxes, businesses are now selling books, pet food, cleaning supplies, and even toilet roll. All on a subscription basis.

The benefits of subscription eCommerce

For businesses, there are lots of benefits to offering subscription services and products. For instance:

Increased return on customer acquisition costs

The repeat business generated from subscription eCommerce means that businesses will have a regular, consistent source of recurring revenue from repeat customers.

And the longer a customer is loyal to the brand, the higher the retention rates, and the greater their customer lifetime value. Meaning you are getting more for your initial acquisition costs.

Lower retention costs

Customers who sign up to a subscription model will be automatically buying from a brand on a regular basis. This means that less resource and budget needs to be spent on retaining customers and reducing churn rates.

Better forecasting

The predictable nature of subscription eCommerce means that businesses can more accurately and reliably predict their revenue stream. Giving them a better indication of the profit they can expect. 

Improved customer relationships

Subscription eCommerce offers more opportunities to regularly engage with your customer base across multiple channels. This helps to improve customer relationships, which results in higher retention, ratings,  and word of mouth recommendations.

For instance, monthly subscription boxes have an excuse every month to communicate with their customers. Telling them what’s in their latest box, and asking for feedback.

More feedback

Which leads us neatly onto our next point. As customers of subscription eCommerce are regularly receiving goods, this offers constant opportunity to gather feedback.

And as the customers will be more engaged with the brand, they will be more open to offering feedback quickly.

This feedback can then be utilised to make improvements to all areas of the business. 

Brand awareness

Subscription eCommerce gives customers something to look forward to on a regular basis. Like a gift to themselves.

It’s common for brands in subscription eCommerce to have their products shared on social media. And of course, the regular communication and improved customer relationships will encourage this.

This of course helps brand awareness and word of mouth recommendations. Leading to new customers and ongoing business.

Are you thinking about starting up a subscription e-commerce business?

Then we can help. We specialise in supporting subscription businesses to ensure their orders are planned, scheduled, and delivered smoothly and effortlessly.

Get in touch to find out how