Hot in eCommerce: Subscription-Based Business

All specialists must be aware of the latest trends in their field: e-commerce shop owners are no exception. In recent years, one of the most common trends in e-commerce is offering subscription services. You should be able to answer questions such as "What are subscription services?", "What are the benefits?", "How can I implement it?" And so on.

The history of subscription-based services

First, it must already be established that subscription services have been in place for some time. In traditional commerce, subscription services dominate the media and press sector. The best example here is several subscriptions to newspapers and magazines. However, with the rise of the Internet, it did not take long for subscription services to find their place in the e-commerce sector. You may not realize it, but subscription services are relatively stable in your life. It's hard to imagine life without commonly used services like Amazon Prime or Netflix.

Today, subscription services are growing even more, ranging from fashion to entertainment to personal grooming and even home-cooked meals, subscription services are ubiquitous.

What are subscription-based services?

Subscription services are offered through a commercial subscription model, in which a customer must pay a subscription price to receive a product or service. Instead of selling products or services at the same time, subscription companies offer to receive them periodically (for example, weekly, monthly, semi-annual, annual, etc.).

Ecommerce Subscription Based Development

The grow in the recent years

The popularity of subscription-based services is undeniable: statistics prove it. At the beginning of 2016, only the EE. UU They counted up to 2,000 cash subscription services. Let's look at one of the most successful examples: the Dollar Shave Club. It was founded in 2011 and, at the end of 2016, its value has reached $ 615 million.

Other figures suggest that the e-commerce subscription market has grown more than 100 percent in the last five years. In fact, it is a very impressive number.

As for 2017, 90 percent of adults in the United Kingdom spent the average amount of £ 56 per month on subscription-based services.

The statistics lead us to another question: why are subscription-based services so popular and successful? The most obvious and direct answer is that the moment is right. The greatest purchasing power now belongs to the millennials, which are the generation of always rushed young people who do not always have time to go shopping for food and enjoy the products that are delivered to their doorstep.

How to implement subscription-based services?

Great news! The implementation of subscription-based services is quite simple because almost all products or services can be converted into a subscription-based service. You just need to look at your product with a new perspective and create an alternative marketing strategy.

However, the subscription-based model works best for the products or services that people use regularly, for example, clothing, food, beauty products, etc.

Whatever you decide to sell, there is one thing you should always keep in mind. Subscription-based services must serve the convenience of the customer. Everything you do should be perfectly planned and monitored regularly. Investigate the best delivery options that will not disappoint your customers or you. Also, be very careful when choosing the correct payment processor; Be sure to choose one that allows recurring payments.

The benefits of subscription-based services.

Convenience

As mentioned above, customers tend to choose subscription-based services primarily for their convenience. By choosing subscription-based services, you can avoid going to the supermarket, looking for new recipes every night or doing other repetitive and boring tasks. In addition, customers do not have to remember to pay for each product or subscription service separately. The recurring payment system is created in such a way that it charges a credit / debit card automatically on an agreed upon periodic basis. Therefore, customers will never be suspended from a product / service just because they forgot to pay. However, customers always have the option to pause / stop the subscription-based service whenever they wish.

In addition, it is so convenient for business owners. You can be sure that a certain amount of money will be paid for your products or services every week / month / etc. In other words, it is a source of stable income.

The loyalty of the client.

If you provide a high quality product / service to your customers on a regular basis, it is very likely that you will gain their trust and loyalty. The implementation of subscription-based services will certainly help you achieve it. However, be sure to maintain the same quality / size / quantity of the product or service to minimize the risk of having disappointed customers.

Control over personal expenses.

When customers use a subscription-based service, they know exactly how much money will be taken from their accounts every week / month / etc. Help control personal expenses and save money.

Possibility of pausing or canceling the subscription.

It does not take much time or effort to pause or cancel the subscription, usually, you just need to click on a button. If at any time during your subscription you feel a pause would be useful, you can pause or cancel the subscription completely. However, keep in mind that some subscription-based services may have different terms and conditions than those described in this article.

Types of subscription-based business models

Subscription sampling

Usually, it is a subscription box filled with sample size products. The company carefully selects the products and offers the best or most suitable ones.

Bargain Subscriptions

Customers register to receive products at a bargain price with the ability to pause or cancel the subscription whenever they wish.

Consumables subscription

This model of subscription services offers products that are used daily, such as food, flowers, diapers, etc.

conclusion

As the world around us changes constantly, individuals and businesses adapt as well. People tend to rush everywhere and get impatient very easily; Modern entrepreneurs need to take this into account and adapt to the ever-changing world. One of the solutions for e-commerce owners is to start offering subscription-based services that millennia need.