Subscription Commerce is expanding at an alarming rate. According to McKinsey & Company research, 15% of online shoppers have signed up for at least one subscription service. This is a huge number considering the projected number 2.14 trillion online shoppers by 2021.
Subscription ecommerce is a great model. It gives consumers the freedom they need and provides merchants with the sustainability they want. It can be a great way to grow your business exponentially if done correctly.
This blog will help you to understand the basics of subscription commerce, how they work, different models and the reasons for its rise. We also explain how you can create your own subscription business using the incredible power of Magento. Let’s get started, if that sounds exciting.
What is Subscription-based eCommerce?
Subscription-based eCommerce, in simple terms, allows customers to subscribe on a regular basis to the products and services they require. This can significantly increase the lifetime value of your customers.
Here are some examples of how top brands harness the unlimited potential of subscription commerce
Dollar Shave Club
Dollar Shave Club, a California-based business that delivers personal grooming products to customers, is undoubtedly one of the most successful examples of subscription commerce. They are the leaders in men’s grooming with their flexible subscription plans and high quality products.
Blue Apron
Blue Apron, an American meal service that delivers high-quality ingredients every day, is Blue Apron. Blue Apron allows customers to choose their preferred food and the team at Blue Apron will make sure everything is taken care of. This unique idea demonstrates how far subscription business models can go.
Farmhouse Delivery
Farmhouse Delivery, a Texas-based business, delivers fresh, local, organic meat and groceries directly to its customers. You can order freshly prepared meal kits or produce boxes and everything else in between. You can subscribe to the products or meals that you need.
Types of subscription commerce business models
There are many subscription commerce business models you can choose from. It all depends on the products and services you offer. We have listed some of the most successful subscription business models below to help you get started.
Subscribe to our Service:
The most popular business model used by giants like Mailchimp and Statista is service-based subscription. This model allows users to subscribe to the service they use on a regular basis.
This business model uses value-based pricing, which allows users to only pay for what they use. Customers will also benefit from flexible pricing and additional benefits.
Subscribe to the Box
Subscription boxes are the evolution of product-based subscriptions. These subscription boxes are how today’s customers treat themselves. Customers can subscribe here to receive relevant products tailored to their interests.
You can subscribe to whatever products you like, from self-help books to meal boxes. Stitch Fix and Birchbox are just a few of the most popular subscription box services, along with Loot Crate and Birchbox.
Subscribe to Digital Content
Many giants now offer digital content subscription services due to the ease of accessing the internet and increasing use. This subscription lets customers access exclusive online content and privileges that are only available to them.
Netflix, Spotify, Amazon Prime, and Amazon Prime are just a few of the companies that offer digital content subscriptions. Subscribers to these services receive exclusive benefits that make them feel special and increase their loyalty towards the brand.
Other Miscellaneous Subscriptions:
A subscription-based business can be established with virtually any product. Uber recently launched the Uber Ride Pass, a subscription plan that helps riders save money on their rides.
Zomato Gold is another example of a clever implementation of subscription eCommerce. Customers who are Gold members receive special privileges like free meals, expedited deliveries, and exclusive discounts
Nissan Switch — Untethered Potential in Subscription Commerce:
A car subscription service by Nissan, a Japanese auto manufacturer, allows drivers to choose a new car each day. This program is called Nissan Switch. This service can be subscribed to for as low as $699 per month.
Nissan isn’t the only company that offers automobile subscription services. Vehicle subscription services are offered by several giants, such as Porsche, Volvo, Hyundai and Mercedes Benz. It would be fascinating to see how other brands enter this market, as subscription commerce is growing at an incredible rate. (PS. You too can be one.
Here are the Top Subscription Business Trends
Subscription commerce is at its height. There are many reasons subscription commerce is so popular. These are the top three reasons subscription commerce is a hot trend among major brands.
Higher Customer Retention Ratio
It is easier to acquire a new customer than it is to retain an existing one, as the old saying goes. Subscription commerce eliminates the need to acquire a new customer.
A subscription commerce model allows you to retain customers and increase revenue through upselling and cross-selling of relevant products. A higher customer retention rate means a better business stability and more loyal customers.
Greater Business Predictability
Its rapid adoption is due to the predictability of the subscription business model. A subscription business model eliminates uncertainty around replenishing inventory, unlike the pay-once model. You can see exactly what items must be replenished, how often, and in what quantities.
Consistent revenue flow is another advantage. It is easy to predict your total turnover if you have the subscribers. It will allow you to focus on new customers and not worry about managing inventory or payments.
Subscribers are the future of eCommerce
Subscriptions are fast becoming the norm in eCommerce. Customers are now embracing subscriptions as a way to get entertainment, health, and beauty products into their everyday lives. It offers convenience and flexibility.
No matter what your offerings are, the subscription model will help you increase your revenue and customer satisfaction . You are ready to elevate your commerce game.
Let’s get started with Magento if you are excited.
How to Start a Subscription Business With Magento
To establish your online presence, it might be worth investing in Magento Store Development if you are just starting out. To get started, however, a reliable subscription is all you need if you have an existing Magento store.
You can install and configure the extension to suit your needs. The extension will allow you to sell your products on an ongoing basis. This extension is for you:
- Subscribe to your diverse product catalog
- Automate collecting payments
- Create advanced product subscription reports
A subscribe now extension may offer additional features in addition to the ones mentioned above. Many agencies offer high-end Magento 2 subscription extensions. No matter which extension provider you choose, ensure that they offer regular updates and free support for at least 60 days. They also provide a money back guarantee if the extension doesn’t work in your store.
Tips to Start a Subscription-Based Business
1: Find A Niche:
A niche is the cornerstone of any subscription commerce business. You will not succeed if you choose a broad niche. You can deliver personalized customer experiences by being specific about your business niche. People value specific products more than generic stuff. It is therefore important to pick the right products for your business.
2: What makes your subscription business different?
Once you have a clear idea of your niche, it is time to decide what you will sell. Let’s suppose you decide to sell clothing and accessories for children under 10. Great. How are you going to differentiate yourself from other similar businesses? Subscription commerce is about curating products and surprising customers to add value to their lives. Think twice before you invest once.
3: Get Products in Order Before You Start:
Once you’ve got a clear idea of what your subscription business will stand out, it’s time for you to start looking for products. It’s a smart idea to have the inventory in place before you start the promotional campaigns. You don’t want your customers to be disappointed by an “Out of Stock” banner just as they are about to swipe their credit cards. It is therefore crucial to get products before you start.
Here are 6 top profitable subscription business ideas (with examples)
You can create a subscription company with any product or service, but here are some creative ideas to spark your imagination.
Media Subscription
You might consider starting a media subscription company if you are able to offer your users exclusive content in the form of an online class or virtual class. You can also charge your customers on a monthly, yearly or annual basis. Udemy is a great example of a media subscription service. Udemy offers online training courses that cover everything, from music to Magento.
Pet Treats
Everyone loves their pets. If you love your pets as much as you do, you might consider starting a subscription company that delivers pet treats to customers. Grateful Dog is an excellent example of a subscription service for dog food. You don’t need to restrict yourself to dogs. All pets are welcome, from cats and rabbits to birds.
Fresh Flowers
You should start a subscription service for flowers if you are passionate about them and it’s what you do every day. BloomsyBox is a leading brand that delivers hand-picked flowers directly to its subscribers. Customers can choose the plan that best suits their needs.
Travel Club
Everyone loves traveling. A subscription service that allows you to travel can turn into a lucrative business. Inspirato offers travel passes to its customers. Subscribers can easily travel with Inspirato by simply subscribing for any of the travel tiers offered by the company.
Content-rich Newsletter
You can start a newsletter or membership if you enjoy creating content. This will allow you to show your subscribers your best work. Mark Manson gives his subscribers the option to subscribe to a paid newsletter. His greatest work is reserved only for his subscribers. His premium subscribers get training courses, blogs, and videos.
Accountability calls
Everyone wants to meet their personal development needs. Accountability calls are a great option if you enjoy helping others achieve their goals. Trina Sette is a good example of an accountability calling service. Trina Sette is a professional accountability partner who offers result-oriented accountability services.
These are just a few examples that will give you an idea of the possibilities of implementing a subscription-based model in your company. Be creative and think outside the box. It’s fine to offer a subscription service that has never been offered before. Your customers’ needs should always be the focus of your business, no matter what product or service it is. Your business will thrive if you are able to identify a need that is unmet and satisfy it in a way that no one else can,
Last words
It is true that it can be intimidating to create a subscription. With the right strategies, you can build a successful business with minimal effort and time. We have highlighted the why, how, and what of subscription businesses throughout this blog.
The first step in establishing a subscription business is to identify your business type, curate products and fill out your inventory. Once you have that, you can get a strong subscription extension.
A subscription commerce business can be created with any product or service. To sustainably grow your business, however, it is important to price your subscription plan correctly. If you don’t know where to start, pricing guides can help.
Now is the time to start your subscription business. You will be able to create a profitable subscription business that generates revenue 24x7x365 if you keep in mind the tips and tricks we shared throughout this blog.
