Once limited only to magazines and streaming services, subscription commerce is expected to grow to $904 billion in 2026. Subscription commerce now encompasses automated billing and fulfillment for clothing, food, and pretty much anything you can imagine. The industry has expanded a lot in the past few years, as retailers look for ways to keep customers coming back, without the extra effort from their marketing teams. Subscription commerce isn’t just beneficial for large companies looking to take advantage of the growing market; growing businesses can offer subscription services to their customers as well to provide a better, more convenient experience.
Subscription commerce is a business model that involves recurring automatic payments in exchange for goods and services over time. An example of subscription commerce you’re likely familiar with is Chewy, a popular subscription service for pet products, or fashion rental services like Rent the Runway or Nuuly that allow you to refresh your wardrobe on a monthly cadence. Subscription programs are only growing in popularity, and retailers are looking to cash in on the hype.
If you’re wondering how to make subscription commerce work for your business, continue reading to discover the benefits and whether a subscription program is right for your business, as well as some practical tips to help you get started.
Benefits
Loyalty
Subscription services allow customers to do business with you on a regular cadence. This makes the customer journey more streamlined, convenient, and it can save your customers money if you offer a discount in exchange for their commitment. Keeping customers close to your business creates opportunities to foster loyalty through personalization and marketing.
Increased Revenue
Improving the customer experience can help you to acquire more customers and retain existing ones. This will ultimately result in more revenue as sales increase, and more predictable and available cash flow, which can benefit retailers who lack the initial investment needed to start their business.
Upselling/Cross-Selling
Subscription programs allow retailers to get closer to their customers and build relationships that can create opportunities to recommend products. This will allow you to use historical data your customers provide when they sign up to better personalize your marketing strategy.
Considerations
Product Type
Before you get started, you have to consider whether your products are suited for a subscription based product/service. There are many types of products that customers will have to purchase more than once, like electronic toothbrush heads or air filters, but products that are made to last and shouldn’t need to be replaced often may not be ideal for a subscription program.
Personalization
If possible, consider whether your product could be personalized for each individual customer. It’s not necessary, but personalization can improve the customer experience and encourage loyalty and trust.
Demand
Before you start you must also consider if there is a market for your product or service, as subscription services become more popular, the market becomes more saturated and competitive as well. These considerations will help you determine if your business is suited for a subscription program.
How to Get Started
Choose a Model
There are multiple different models for subscription based commerce. Curation models include highly personalized collections of products, some of which might only be available through the subscription program. Replenishment models allow customers to stock up on consumable products they already purchase regularly. Access models provide customers with the ability to use a service or software, such as Amazon Prime or streaming services. Once you choose which model works best for the products or services you offer, then you can decide which products to include in your offering.
Choose Products
You may have a variety of different offerings, some of which may be consumable products while others might not need to be replenished frequently. Choose which products to incorporate into your subscription offering to continue building out the program.
Price Your Products
Offer a discount to incentivize customers to take advantage of the subscription plan. Once you decide how to price your subscription offering, you’re ready to integrate the subscription into your marketing campaigns.
Develop a Marketing Strategy
Now that you’ve created your subscription program, you will have to incorporate this new offering into your marketing strategy. After you’ve finished adjusting your marketing campaigns, you’re ready to start.
Once you’re ready to launch your subscription service, you will have to make sure that your eCommerce platform has the functionality available to run your program. Not all eCommerce platforms have this capability built in, which might result in extra labor and resources from your team. Custom integrations can be expensive and time consuming, and your team may not have the experience to execute them successfully. You shouldn’t have to focus on complex eCommerce tech challenges when your priority is building a better experience for your customers. Like a composable commerce solution, Virid’s eCommerce platform marketAgility 7.0 offers maximum flexibility and control over your tech stack, with none of the extra effort. You can swap out components based on your unique business needs, the best part is you only have to pay one set monthly fee.
If you’re ready to make the switch, contact us today to get started.
