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How Subscription Commerce is Changing the Ecommerce Game
Explore what subscription commerce is, uncover its benefits for your business, and learn from leading brands riding this $1.5 trillion industry wave.
- Subscription commerce is a business model in which customers sign up to receive their favorite products or services on a recurring basis.
- It offers businesses predictable revenue, improved customer retention, and greater convenience for customers.
- Three successful subscription commerce businesses are BarkBox, Magic Spoon, and HelloFresh.
- Each business utilizes personalization, convenience, and variety to appeal to its customers.
- Rebuy offers integrations with subscription platforms like Recharge to make the subscription experience more convenient for both customers and businesses.
Remember the good old days when you’d pick up the phone and call up your favorite pizza spot...
...and wait with bated breath for the doorbell to ring? And then, that exhilarating feeling of finding a hot, delicious pizza right at your doorstep?
That was the height of convenience back then.
Fast forward to today, and we’re living in a world where the dial-a-pizza thrill has been blown out of the water. Now, our doorbells ring with so much more than just takeout.
We’re talking personalized beauty boxes, gourmet meals designed with our taste buds in mind, and the healthiest food for our fur babies. And it’s all thanks to something called subscription commerce. This model is not just reshaping ecommerce — it’s completely turning it on its head.
Subscription commerce also means never running out of our favorite products; we can set our preferences to get the items we need before we even know we need them. Talk about convenience and personalization!
The potential rewards are enormous for ecommerce retailers who recognize this shift and ride the wave. Get this: the subscription commerce model is projected to hit $1.5 trillion by 2025.
We’re gonna break down the juggernaut that is subscription commerce and why it’s a game-changer for your ecommerce platform. We’ll also pull back the curtain and show you some top-tier brands that are crushing it in the subscription commerce space.
Ready, set, go! 🏁
What Is Subscription Commerce?
Subscription commerce is a business model where customers sign up to receive their favorite products or services on a recurring basis. This can be monthly, weekly, or quarterly, and customers often receive a discount for their loyalty. It’s also known as subscription-based, or subscription box, business.
It may sound like a simple concept, but boy, has it caught fire 🔥 across many industries. There are three types of subscription models out there:
Replenishment Subscriptions: Think about things you need on the regular. Coffee, diapers, pet food, your favorite skincare products. Subscriptions in this category deliver these essentials right to your door, usually at a sweet discount. Around 32% of subscriptions are replenishment-based.
Access Subscriptions: Ever heard of Netflix? How about Skillshare or Adobe Creative Suite? These giants give you exclusive access to their subscription products or services in exchange for a membership fee.
Curation Subscriptions: These are the folks who know you’re special and want to cater to your unique tastes. It can take two forms: you choose your own products, or you receive a surprise goodie bag based on your preferences. About 55% of ecommerce subscriptions follow this model. Think beauty subscription boxes, book clubs, or meal kits like Blue Apron.
What Are the Benefits of Subscription Commerce?
So, you’re probably wondering, “Why should I jump into this whole subscription commerce gig? What’s the payoff?” In a nutshell, subscription commerce is your golden ticket to predictable income, higher customer lifetime value (CLV), better retention, and an epic customer experience. Let’s dive in deeper with three major benefits.
The beauty of subscription commerce is that it gives you a steady, predictable income you can count on. You’re not chasing one-off sales; you’re locking in long-term commitments from your customers thanks to recurring payments.
Why’s that a big deal? Well, when you know the money’s coming in consistently (and how much), you can plan better. You can budget like a boss, manage your inventory efficiently, and strengthen the financial stability of your business. You’re not just surviving; you’re setting the stage for sustainable growth.
Improved Customer Retention
Another sweet advantage of subscription commerce: customer retention. With a subscription, your focus shifts from constantly chasing new sales to keeping the customers you already have. And keeping a customer is way more affordable than getting a new one.
Whenever a customer makes a recurring transaction with you, it’s like they’re saying, “Hey, I trust you.” It’s another chance for you to build the relationship and earn customer loyalty. Think of it like an ongoing conversation with your customer. Every month, it’s your chance to knock their socks off, whether it’s with a slick, well-crafted package or an exclusive gift or discount.
And every time a customer sticks around, the associated subscription revenue does, too. This also means less time and money spent on acquisition, higher customer lifetime value (CLV), and lower churn rates.
Greater Convenience for Your Customers
But subscription isn’t just about what’s in it for your business. At the end of the day, it’s all about your customers. Convenience plays a major role in why people use subscription services, with 81% of subscribers stating that it’s important to them.
Subscription services help make life easier for your customers, as they don’t have to worry about running out of something they need. They know that they will get their product on time, every time. Not only does this provide convenience and peace of mind, but it also helps to build loyalty. Customers are more likely to stay with you if they know they’ll have consistent access to the products they need.
Three Subscription Brands That Are Killing It – And What You Can Learn From Them
And now, it’s time for the show-and-tell section of this blog post. Here are some subscription commerce businesses that are doing it right and making big moves in this space.
OLLY Energizes Their Subscription Business
Not only is thriving vitamin brand OLLY on a mission to champion better wellbeing for all. They’re also laser-focused on using their subscription model to bring their delightful supplements and vitamins to more customers at the right time.
In a case study with Rebuy, OLLY’s Senior DTC Manager Jennifer Peters explains why subscription growth is so important to their overall business strategy. “If you grow subs, you grow everything you need to grow, all the KPIs.”
OLLY drives subscriptions using attractive subscription upsells strategically displayed directly in the shopping cart. A large Subscribe & Save button appears next to each product added to the cart. And a 15% discount sweetens the deal.
Also, OLLY makes subscription management super easy. Customers can select delivery every one, two, or even three months, directly from the cart flyout. The brand even includes a Subscribe & Save link in the footer of their online store that links to a dedicated landing page.
Now there’s a brand that's killin' it with subscription commerce.
Key takeaway: Want to energize your subscription business? Make it super easy to subscribe. OLLY makes it easy with in-cart subscription upsells featuring options to choose the perfect subscription. Consider a dedicated landing page to clearly explain the benefits of your subscription program, and how it works.
"Adding Rebuy was like pouring fire on our subscription program.”
This dedication has paid massive dividends for OLLY. Read the OLLY case study to see exactly how they achieved their stellar results.
Personalization Is the Bite in BarkBox’s Subscription Commerce Model
When it comes to the subscription business, the phrase “all bark, no bite” definitely doesn’t apply to BarkBox. This is a brand that just gets it.
They understand the absolute value of truly grasping their customers’ needs and then delivering that without a hitch. How do they do this? It’s all about the data. The company collects first-party data (link) about each dog’s breed, size, age, and dietary restrictions.
Using this data, BarkBox whips up a personalized package of toys, treats, and chews that are tailored to each dog’s needs and preferences. For example, let’s say your dog is a teacup poodle with a penchant for plush toys and an allergy to wheat. BarkBox doesn’t just throw together a generic box for your little guy.
Instead, they dig into their stash of doggy delights to curate a unique package. They’ll swap out wheat-based treats for something more digestible for your pooch🐩 and fill the box with pint-sized playthings perfect for a dog of your pet’s stature.
This level of customization isn’t just fluffy stuff — it’s smart business. By giving their customers — both human and canine — exactly what they need and want, BarkBox has become a must-have subscription box service.
Key takeaway: Tap into your customer data and insights and put them to work. For instance, track customers’ browsing history, searches, and clicks to identify their interests. Based on this data, you can serve up product recommendations that are tailored to a customer’s individual preferences. Do this, and you won’t just be barking up the right tree — you’ll be climbing it to success.
Magic Spoon Casts a Spell With Delicious and Guilt-free Cereal Options
Americans eat an average of 100 bowls of cereal per year, but many of these options are packed with unhealthy sugars and grains. Enter Magic Spoon. 💫🥄
“We want people to try a lot of flavors, discover their favorite, and be able to make a habit out of eating Magic Spoon.”
They’ve worked their magic on subscribers by conjuring up a healthy cereal that tastes just like childhood favorites (think: Froot Loops and Cocoa Puffs). It’s packed with 12-14g of protein per serving, little to no carbs, and no artificial flavors, colors, or preservatives. Customers enjoy their favorite flavors without any guilt or compromise, knowing they are making a healthy choice.
And here’s the kicker — they aren’t just selling cereal; they’re selling convenience and cost savings. By subscribing, customers can save up to 25% on every case. That’s a chunk of change that adds up over time.
Key takeaway: Show your customers the full value of your subscription. Highlight the convenience, the savings, the health benefits — whatever makes your product stand out. The goal is to deliver an experience that fosters a lasting relationship with your brand and keeps them coming back for more. That’s how you create that sweet (but low-sugar!) recurring revenue.
Drive More Subscriptions With Rebuy
Rebuy strengthens your subscription business through integrations with the popular subscription ecommerce platform, Recharge, and other amazing subscription ecommerce platforms like Skio, and more. This means that merchants using Rebuy can empower their customers to automate subscriptions, customize subscription features, take advantage of discounts, and more, all while enjoying a personalized shopping experience.
The end result? An incredibly smooth user experience that builds customer loyalty, boosts subscription revenue and increases customer lifetime value.
Hot Tip 🔥: Things get really exciting when you consider how subscription commerce tools like reorder landing pages can boost your subscription program.
The Power of Subscription Commerce
Ultimately, subscription commerce is about convenience (on both sides of the transaction). For businesses, it’s a recurring revenue model that brings predictability. For customers, it alleviates the need to reorder favorites, guarantees a steady product supply, and offers regular deliveries of curated selections. It’s a win-win, streamlining commerce and turning routine into delight.
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