The Growth of Subscription eCommerce Websites

The Growth of Subscription eCommerce Websites

The ecommerce subscription model is growing at a rapid pace; the subscription box industry grew by 890% over a four year period. Now more ecommerce brands are left wondering how they can capture some of this value. Consumers are now also faced with an increasing list of possibilities that offer convenience; it’s safe to say subscriptions are no longer limited to only magazines and newspapers. 

At Blue Whale Media, our web designers from Liverpool have analysed the growth of the ecommerce subscription model. Read on to see how our marketing team feels about the growth of the ecommerce subscription model and how it affects your business?

What is an ecommerce subscription? 

Subscription ecommerce is a business model in which customers subscribe and make regular or monthly payments to receive products or services. They come in two varieties, either they allow shoppers to set up repeat purchases, or they come in the form of subscription boxes, sending new boxes of goodies to customers regularly. Generally, subscription-based ecommerce models also make life easier for you as a business owner. 

Benefits of subscription ecommerce: 

  • Convenience for customers – the appeal for subscribers is that it saves them time and effort if they know the item they need or want are arriving regularly, there’s no need to re-order. 
  • Convenience for retailers – subscription models, offer better financial forecasting so retailers can predict volume and demand much more quickly. 
  • Build customer relationships – regular deliveries of subscription products means that retailers contact more often with customers, allowing them to build a relationship. 
  • Subscription customers can be a higher-margin – acquisition costs can fall into the profit margins of ‘normal’ retailers, but when acquired customers are longer-term subscribers, the profit per customer acquired should be higher. 
  • Higher retention rates – customers are committed to regular payments, so they are less likely to churn. 

Why consumers like subscription 

Studies have shown us that receiving a package is seen from the brain’s reward centre, like getting a gift. The reality is that when we start to subscribe to things, we rarely cancel them. Therefore, one of the greatest benefits of subscriptions is that they don’t require customers to make a decision every single time – this leads to predictability and steady revenue for ecommerce brands in the long run. 

What retailers can learn from subscription-based ecommerce 

You can try to incorporate repeat purchases within your business without including a full subscription package. This can be offered as an alternative and could potentially be a more convenient option for your customers at checkout. Ecommerce subscription models mean a more excellent customer retention average because customers have to actively opt-out once they’ve signed up. 

Subscription-based ecommerce business models have seen incredible growth, which is only expected to rise. It’s undoubtedly an attractive business model with considerable benefits in customer retention and predictable and regular income. Regardless of whether you opt-in for any subscription model, all retailers can benefit from focusing on retention, service and customer experience that keeps them happy.