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Speedwell Ecommerce Subscription Box
WRITTEN BY
JOHN KING POSTED ON 9 Dec 2020

How to incorporate ecommerce subscriptions into your strategy


Before packing your eCommerce products into a subscription box, it's important to understand the reasons why brands incorporate subscriptions into their existing products.

Subscription eCommerce is the digital offering of products or services being delivered on a regular basis, usually monthly, with payment automatically taken from the customer.

According to Shopify, the subscription economy is worth $2.5 Billion annually to ecommerce retailers. Ecommerce subscriptions have become a lifestyle habit for many customers due to their convenience and ease.


45% of 18-34-year-old customers are already enrolled in a subscription service - Pitney Bowes 2019 Online Shopping Study

The opportunity and the weakness of the subscription market lie entirely in the company’s ability to deliver a convenient experience for the consumer. According to the latest UX research after a bad customer service experience, 39% of customers will avoid a company for two years and 91% of customers who are unhappy with a brand will just cancel their subscription without complaining.

Beyond the basic of delivering a best-practice eCommerce solution, the key considerations for a seamless and convenient subscription user experience are:

  1. Easy to change the products ordered
  2. Easy to change the frequency of the delivery
  3. Easy to pause or cancel a subscription

This sounds straightforward, obvious even, yet many subscription services struggle with the user experience, communication and changes needed in order to ensure a smooth, frictionless subscription experience.

Subscription services generally fall into three broad categories – replenishment, curation, and access – providing either software or a physical product.
  • Replenishment subscriptions allow consumers to automate the purchase of commodity items such as shaving, hygiene or contact lenses. Examples include razor subscription service Dollar Shaver Club and toilet paper subscription service Who Gives A Crap.
  • Curation subscriptions seek to surprise and delight by providing new items or highly personalised experiences. Examples include personalised fashion styling services, beauty boxes to kit meals like Hello Fresh.
  • Access subscriptions allow consumers to have access to services like Netflix, Amazon Prime and Stan.

McKinsey (2018) on why consumers subscribe to ecommerce subscription services.

Most important triggers when initiating subscriptions, data from McKinsey (2018)


6 Success Factors of Subscription Services

There are plenty of reasons to start a subscription service, assuming your business is a fit in the first place. Not least of these reasons is the reliability of the revenue stream. Beyond that, your business can operate with some sense of predictability while maintaining customers over a long term period. Successful eCommerce subscription retailers, all have the below common factors when operating their business.

Differentiation: In a highly commoditised or saturated industry, like coffee, beauty, meal kits or fashion, a subscription offering can set your brand apart and establishes you as a curator or influencer in your space.

Segmentation: With more information on subscription customers than a typical checkout, there is greater opportunity for upsells or cross-sells as well as to “surprise and delight”. It is recommended to segment and communicate regularly to each specific audience.

Stability: As subscriptions take root, you can more accurately predict inventory levels, reduce waste, and cultivate recurring revenue. Customers don’t subscribe to products because they enjoy money exiting their bank accounts every month. So this is why it is important to show value, communicate frequently and be transparent on how buyers can easily tailor or unsubscribe from your service on their terms.  

Exploration: With so much choice online, many buyers see subscriptions as a simple way to “try something new” that’s highly personalised. You won't get your subscription right the first time, this is why we recommend a continuous improvement approach where you test, measure and evalaute what you have delivered to the market is still relevant and of value to your audience.

Personalisation: One of the main factors in the longevity of a subscription is increased personalisation over time—this is something to keep in mind to minimize churn.

Value: Overall price is not the key factor here, but rather value for money; as one of the key reasons why someone subscribes and churns, it’s important to manage expectations with your buyers. It is also common for eCommerce retailers to give subscribers access to prelaunch specials, cheaper shipping, and discount member-only offers and deals. 

 

Turn any product or service into a subscription

These days, you can turn any product or service into a subscription. The top subscription platforms that our clients use are:

  1. Shopify
  2. Big Commerce
  3. Woo Commerce
  4. Sitecore Experience Commerce
  5. Episerver Commerce Cloud
  6. Magento Commerce Cloud 

While there have traditionally been subscription categories like makeup, beauty products, razors or vitamins, today there are no rules. From a subscription perspective retail categories like socks, business apparel, coffee, prepacked meals, fitness protein powders and fruit and vegetable boxes are booming. If you sell a product online, you can 100% guarantee that you could successfully make it into a subscription product.

Since COVID-19, consumers are increasingly subscribing to products that have historically not been offered as subscriptions. The trend is being driven by consumers who have multiple subscriptions: Of the 15% of consumers who receive subscription products, 35% subscribe to three or more services. Diving deeper within this group, 18% of men and 7% of women have six or more subscriptions.


Looking to create subscriptions on your website?

Speedwell is well versed in subscription commerce with over 10 years of experience. Our first client whom we built an eCommerce subscription service was for organic fruit and vegetable company Home Fresh Organics.

Built on Umbraco this subscription eCommerce business is highly customisable and provides users complete flexibility when choosing organic items to add to their subscription box.

Speedwell works closely with all our clients to develop the most effective strategy for providing digital solutions to their customers. Where appropriate, we encourage our clients to invest in enterprise platforms like Sitecore Experience CommerceEpiserver Commerce CloudMageto Commerce Cloud or Shopify Plus to achieve their business objectives. If you are looking to implement an open-source eCommerce solution we also have ideas and experience doing this to suit your budget.

Our developers are focused on developing integrated, best in class eCommerce solutions. We continue to invest in the future of eCommerce platforms. Schedule a call back with our team of Digital Engineers, the safe pair of hands you need for creating your successful eCommerce solution.

SPEAK WITH OUR TEAM

 


John King, Digital Marketing Technologist, Speedwell



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