The subscription based business model is becoming extremely popular in ecommerce due to several reasons.
This is not a full list of reasons why subscription-based delivery is becoming a convenient shopping method for consumers and a cost-effective solution for businesses.
The ecommerce subscription model differs from the traditional ecommerce with the ability for customers to make recurring orders with automatic payments.
There are three types of ecommerce subscription websites:
For illustrative purposes let’s look at the Birchbox company which is one of the most successful subscription businesses of this type. They offer their customers to receive a box with beauty samples each month for $10/month. Then they offer customers to purchase the full-size versions of any products they liked the most with a $1 back for each $10 spend.
Another subscription box trend for consumers who love surprises is to receive new-designer shoes or clothing of a particular fashion brand as soon as they are available for order. For instance, this category of consumers can subscribe to receive every ‘fresh’ pair of Balenciaga sneakers or even a T-shirt by NBA Thunder if they wish.
If in the previous category we had an example with a delivery of new fashion products when they became available to order, this type provides clients with the opportunity to buy products immediately after release, in other words, before appearing on the market. This can be exclusive garments, recently shown on the exclusive catwalks, or test products such as electronics or sports equipment presented at trade shows.
Let’s review the JustFab programme as an example. The store offers clients exclusive access to a personalised boutique for £35 per month. VIP customers need to take a style quiz, after which they will be able to view the selected products with a unique design tailored to their interests and order them at VIP rates (with a discount of up to 75%). Delivery, returns and exchanges are free.
Our professionals can develop a strategy that will help you achieve your business goals faster and avoid costly mistakes
Amazon Subscribe & Save is one of the excellent ecommerce subscription model examples. This feature allows customers to choose these types of products from 6 different categories and receive them periodically with door-to-door delivery.
As a rule, this type is efficient for retailers who sell household and personal care products, cosmetics, goods for babies and pets, as well as grocery and health care items. However, all rules have exceptions. This is why some customers will be happy to receive ‘fresh’ socks every week just because they don’t have the time or desire to wash them.
Box delivery services in the United Kingdom are still not as popular as in the US; however, this pace of development is pretty high. The British subscription box market is predicted to be worth €1.12 B by 2022 which is 72% more than last year’s estimation. Today, almost 60% of companies want to invest in subscription ecommerce.
However, this doesn’t mean every ecommerce needs to implement a boxing service into their online store. Thus, the analysis of the biggest subscription businesses revealed that this idea would deliver better results if:
We recommend not to expect the box business model to make quick profits for your traditional online store. However, this solution can help you increase customer retention, improve margins, and make the revenue predictions more accurately. Let’s look at each advantage of box services for ecommerce:
If you have decided to implement box delivery into your e-store, make sure that:
Subscription delivery services may be promoted within almost all digital marketing channels. The following separate campaigns are the most efficient for the subscription box industry:
To correctly analyse if your decision on implementing the subscription service business model was successful you need to monitor the following metrics in the statistics data.
The subscription model is the new trend in ecommerce business which is predicted to develop rapidly in the next few years. This may be a profitable idea for stores who have a wide range of daily used products such as grocery, household and personal care products, cosmetics, goods for babies and pets or health items. However, before implementing this model into the traditional ecommerce model, be sure that your existing audience lives in cities and earns more than £30,000 per year. Examine the examples of successful subscription businesses to understand the perfect mechanics which lead to success.
Do not forget to check if your website is PCS and GDPR friendly and elaborate a complex marketing strategy for promoting your box delivery service. If you need any help with this, be sure to contact our experts.
You may also like
Choose quality and trusted services to improve the presence of your company on the Internet, and feel free to contact our UK team if you have any questions.
Email preprocessors are tools that allow you to automatically integrate pre-prepared data into email content.
Promodo SEO experts prepared a bunch of the finest tips for you to know how to get leads as a travel agent.
We at Promodo are ready to help you improve your performance across all digital marketing channels.Get started