Should You Offer Subscriptions on Your E-Commerce Site?

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Did you know that you have a 60-70% higher chance of success when selling to an existing customer as opposed to a 5-20% chance of selling to a new prospect? Capitalize on that customer loyalty and create an exceptional service experience for your customers by offering product subscriptions on your e-commerce site. Whether you’re interested in setting up a subscription model for the first time or improving your existing offer, this guide is for you.

Types of E-commerce Subscriptions

Curation Subscriptions

Curation subscriptions focus on providing the customer with a unique, curated set of items tailored to their preferences. You can think of this type of online subscription as the “personal shopper” experience. These subscriptions are typically themed around a particular product type or interest—things like beauty products, clothing, coffee, wine, and more—and offer the convenience of professional expertise and limited decision-making on the customer’s part.

Examples include: FabFitFun, First Leaf, Stitch Fix

Access Subscriptions

Access subscriptions allow customers to pay a (typically monthly) fee for access to exclusive “members only” products, content, or discounts. These subscriptions include a wide variety of offers, from content streaming to products available exclusively to subscribers. As the fastest-growing subscription type, access subscriptions provide a high level of value at a low cost per customer. 

Examples include: Adore Me, Thrive Market, Netflix

Replenishment Subscriptions

As one of the most popular e-commerce subscription models, replenishment subscriptions focus on providing convenience and the peace of mind that customers won’t ever run out of their favorite products. Customers simply select the quantity and frequency with which they want to order their favorite products, and the items are delivered directly to their door with no hassle.

Examples include: Black Rifle Coffee, Rae Wellness, Pretty Litter

Benefits of the Product Subscription Model

Every business owner knows that having predictable income month-to-month is a necessity and with product subscriptions, you’ll have the opportunity to create just that. By adding a subscription model alongside your one-off purchases, you’ll build yourself an additional revenue stream that offers predictable, recurring revenue. 

Not only that, but by offering replenishment subscriptions through your online store, you can capitalize on the loyalty your customers have for your brand. Having customers that know and trust your brand enough to buy it repeatedly and keep your products on hand at all times are your best customers and your best advocates. And, by keeping those loyal customers satisfied with the convenience your subscription offers, you’re ensuring that you retain them for years to come. Keep in mind though, subscribers don’t necessarily love the pricing model—they love the experience that the subscription provides.

Replenishment Subscription Best Practices

The decision to offer product subscriptions can make a huge impact on your e-commerce business, but only if it’s executed well. If you don’t deliver an outstanding experience and tangible benefits, customers won’t keep their subscription. Putting in the time and effort to analyze your customers’ needs, as well as your internal logistics processes, is a preliminary step that should be taken before launching your subscription offer. Here are a few of the best practices we recommend when it comes to product subscriptions:

  • Understand your customer’s buying habits. Look into historical purchase analytics and identify the products that your customers buy most frequently and which ones are often purchased repeatedly by the same customers. These are your best candidates for a successful replenishment subscription.
  • Offer subscriptions that make sense. If you know that a product is unlikely to need replacement or replenishment, it’s unlikely to be successful in a subscription model. Products like perishables and consumables are better fits for a subscription.
  • Highlight the convenience of never running out. Customers love the convenience that product subscriptions offer. Instead of having to run to the store once they are out of a particular item, they can have it delivered straight to their door with no hassle and never have to worry about running out.
  • Consider offering a subscriber discount. Over time, a subscriber will spend significantly more at your store than a one-off purchaser. By encouraging customers to take advantage of a subscription with a discount, you’re sacrificing a little margin now for an infinitely more valuable increase in recurring revenue and customer lifetime value.
  • Be aware of new challenges for your business, including:
    • Increased cybersecurity and fraud prevention practices since you’ll be storing customers’ credit card information
    • Expired payment methods (and required follow-up with customers to update their information)
    • Customer forgets to unsubscribe before next billing cycle and needs intervention from customer service
    • Inventory planning to ensure you have plenty of stock to fulfill both one-off and subscription orders
    • Adjusting your logistics process to keep up with recurring shipments

Adding Product Subscriptions to Your E-commerce Site

If you’re already running an online store, adding subscription functionality is a relatively simple way to improve your customer’s experience, increase the lifetime value of your customers, and gain consistency in your revenue projections. Most e-commerce platforms offer apps or plugins that make selling products subscriptions easy. 

For Shopify sites, we recommend implementing Shopify’s new Subscription APIs for a custom subscription solution or using one of the following third-party apps:

No matter which method you choose to offer subscriptions to your e-commerce site, adding this option is a great step for both you and your customer. You’ll love the consistent stream of revenue and customers will love the ease and convenience of having regular shipments of their favorite products delivered right to their door.

Are you ready to get started with product subscriptions on your Shopify site? We’d love to help! Contact us today to get started offering subscriptions on your e-commerce site.

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