eCommerce subscription is the future of online retail

The Importance Of Ecommerce Subscriptions In Your Online Business

Ecommerce subscription is becoming a trend for many online businesses in today’s society. It acts as the main business model for business platforms such as Spotify and Netflix that provides SaaS model or Software-as-a-Service. Also, it is starting to spread on to platforms of beauty and fashion. The subscription business models tend to charge a recurring fee to the customers monthly or yearly for gaining access to a service or product.

It is all about building strong and reliable customer relationships. It is evident from the many customers turning into loyal followers of your company. We are positive that’s what you want, especially because their loyal followers bring in huge recurring fees at all times. Customers will become more valuable to your company as long as they utilise your service and product. And we are all aware that higher rates of customer retention equal to lesser costs of acquisition in the long run.

Revenue Opportunity

Habits of consumer purchase are trending towards shopping experiences that are hassle-free, immediate gratification, and free deliveries. We are excited to let you know that these subscription models are serving all these needs. They offer customer value via low efforts. With businesses that are subscription-based, you can expect outstanding growth opportunities.

Traditional online retail tends to be based on total revenues and ad hoc purchasing. However, the subscription models tend to rely on recurring revenue and pre-planned purchasing. It acts as the ultimate lifeline for multiple businesses during the retail and market cycle highs and lows. This predictable and consistent revenue permits subscription-based businesses to efficiently order and manage their inventories.

Growing Potential

We believe that understanding the lifetime value of a customer in a subscription-based business will assist brands in spending wisely on acquisitions during slow-selling seasons. Based on the targeted and close bond you have with your subscribers than the common customers, the successful subscription companies can view the lowered churn rates inside their customer base.

The average churning rate as a benchmark for B2C businesses stands at 7.05%. Customer dissatisfaction causes voluntary churn, and payment issues lead to involuntary churns. With these subscription-based businesses, the pricing is also straightforward. It is so because the stores mainly focus and stress macro pricing with the tiers instead of individual prices on tons of products. Ecommerce subscriptions also assist brands in increasing repeat purchases.

They do so because you don’t need to win the business or company ad hoc every time you possess a subscribed and loyal customer base. We are positive that you possess a chance between 60-70% for selling it to a present customer compared to a 5-20% selling chance towards a newer prospect. Plus, recurring revenue tends to make your business extra valuable and impressive to potential investors and buyers. It is a great idea if you ever decide to sell off your business.

Business models that are subscription-based also allow companies to be increasingly data-driven, along with acquisition and customer targeting. They also pass the cost savings for distribution, personalisation, and marketing on to their customers. These businesses have insights relating to their customer base, which creates improved marketing and cross-selling opportunities. We want you to know that these opportunities aren’t simply possible for common retailers.


We are excited to let you know that it is good news for all the retailers looking forward to providing a subscription-based model. Why? Well, because business is increasingly booming in this field. We are aware from the newest projections that the market of worldwide subscription market will hit $246.6 Billion by 2025.

Through the SEI or Subscription Economy Index, we know that there is a revenue expansion of 5x in subscription businesses compared to the company revenues of S&P 500. Subscription e-commerce businesses are responsible for raising $2.5 Billion in venture capital funding over the past few years.

Why Brands Incorporate It In Their Strategy

Here are some of the important reasons why they incorporate e-commerce subscriptions in their strategy:

Differentiation: In an industry such as beauty with saturation and commoditization, offering a subscription tends to set your brand/company apart from the rest. It makes you an influencer or curator in your space.

Segmentation: Since there is sufficient information on the subscription customers compared to a common checkout, we notice a bigger chance for cross-sells or upsells. It also includes surprise and delight.

Stability: As the subscriptions start to take root, it is possible for you to accurately predict waste reduction, inventory levels, and cultivating recurring revenue.