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Launching Subscription Commerce for Your Brand

PostedMarch 15, 2021

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Remember that time you drunkenly purchased HBO Max over the weekend to rewatch The Lord of the Rings trilogy and forgot to cancel it like you promised yourself you would? We’ve all been there. 


Subscription services can be tricky to manage, but if a customer really loves a brand and uses their product or service a lot, it can be mutually beneficial for both the brand and the consumer. Let’s dig into why this is.

The Benefits of the Subscription Model

According to the Global Banking and Finance Review, “70% of business leaders say business subscription models will be key to their prospects in the years ahead.”

Customer Retention & Relationship

By employing a subscription service, a brand is essentially guaranteeing future business from the same customer. This not only increases the consistency of revenue for a brand, but it allows the brand to invest further in a particular customer to see how it can serve them best.


From the consumer perspective, it means getting access to perks and benefits that non-subscribers don’t. This could include cheaper prices, the opportunity to buy products before they drop to the public, and better overall customer service from a brand.

Subscription commerce shipping boxesPhoto by Mildlee on Unsplash.com 


Let’s create a little hypothetical scenario to see how this could play out in real life. 


Okay, we’ve just established a fake cookware brand called Griddle. Griddle has started offering a $35/month subscription service for their line of high-end, niche cookware items and kitchen utensils. One of Griddle’s loyal customers, Carey Cooks, decides to sign up for the service. 


Now that Griddle knows Carey is in it for the long haul, they can start engaging deeper with her to identify what kinds of cooking and baking she does the most. Deeper engagement can come through sending detailed questionnaires, tailored recipes, and other personalized value propositions that keep Carey engaged and looking forward to her monthly shipment of niche kitchen items. 


By giving Carey and other subscribers a discount from the full, one-time purchase price of their cookware, Griddle retains these customer’s loyalty and gives them better value as a tradeoff.


That’s a win-win.

Easier Forecasting 

Many smaller and newer retail ecommerce shops struggle to manage inventory and supply. Too much inventory can create added costs and too little can mean losing out on revenue and customers.


A subscription model sets a baseline for how much product a brand will need for a month. This alleviates much of the headaches and pain that goes into fluctuating inventory.


By having a scheduled subscription model in place, brands can have product readily available and able to be shipped to subscribers faster than single orders. 


Forecasting also allows the brand to be inventive with how they personalize orders for subscribers.


For example, a brand could place unique thank you cards into orders, add instructions for how to use this month’s product with others a subscriber has received in the past, or offer limited discounts available only to subscribers.


Long story short, when you can forecast something happening, you can better prepare for it.

The Types of Subscription Models

Here are the three most common forms of subscription services you will find on the market today. If you are the owner of an online shop, think about which model would work the best for you.


Replenishment 

As the name suggests, this relates to products that are used daily or weekly by consumers and simply need to be re-upped or replenished. It’s appeal is in its practicality. 


For example, a line of women’s hair care products might send their subscribers one curated product each month like a dry conditioner, leave-in spray, or shampoo. 

Curated or Customized 

While this type of subscription can still be practical, it feels a bit more fun and tailored for the consumer. This is also a great chance for a brand to flex their customer service and their expertise within a product category.


All of the clothing or lifestyle boxes on the market are curated subscriptions like Birchbox, Bespoke Post, Trunk Club, and Stitch Fix.

StitchFix subscription commerce optionsPhoto by Venturebeat.com

 

What makes this type of subscription so popular is the emotional appeal it can have. A consumer starts by filling out a profile providing information on their style, tendencies, tastes, wants, and desires. Then, it’s up to the brand to deliver high-quality individual picks for each customer. In the case of a curated clothing subscription, a customer is putting faith in the brand to pick out clothes that will make the customer feel more stylish and in tune with fashion trends.

Access-driven 

This type of subscription creates exclusivity and acts as a membership. Customers will purchase this subscription in exchange for getting access to a brand’s products or services. Because a brand is asking a customer to pay a fee to even get through the doors, many times the products will be discounted.


Costco is a large-scale example of this type of subscription, but even smaller online stores could implement this if they have a loyal customer base and a highly desirable product line. 


A food or grooming ecommerce shop could implement this type of subscription to secure recurring revenue but also allow customers to shop their catalogue for cheaper. 

Subscribe and Thrive!

Take a moment to figure out if a subscription model makes sense for your online shop. Is there space in your market for this? Is someone else already doing it who offers the same thing you do? Do you have enough testimonials, reviews, and happy customers to justify putting a subscription in place? Would the exclusive nature of a subscription service help or hurt your marketing and revenue?


Read this detailed CoreDNA.com article to learn about all the nuanced factors and steps necessary to launch a successful ecommerce subscription service.

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