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8 Benefits of Growing Your Brand with E-commerce Subscriptions (+ Tips)

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One of the fastest-growing and most exciting business models is e-commerce subscriptions. When most people think of subscriptions, they imagine media companies focused on materials such as news, magazines, and entertainment. 

These companies offer content based on daily, weekly, monthly, or annual fees. Nevertheless, you might be surprised to find that an e-commerce subscription service can work for virtually any type of business. All you need to do is figure out how to spin it effectively.

In this article, we are going to look at how you can use an e-commerce subscription platform to build your business model. 

What is an E-commerce Subscription Model?

In essence, e-commerce subscriptions consists of a recurring payment system where customers pay daily, weekly, monthly, or annually for products and services. For instance, some entertainment streaming platforms take daily payments through their on-demand or pay-as-you-go streaming services.

Most e-commerce subscriptions offer weekly, monthly or annual plans. This approach works because the company ensures a regular revenue stream. It also works for customers since they only acquire the products and services that work for them. 

Here is a great e-commerce subscription example:

advantages of e-commerce subscription model
Source: butcherbox.com/get-started

This e-commerce subscription works because it takes the guesswork out of people’s shopping habits. Instead of going to the supermarket every week to get their favorite steaks, customers can expect them delivered regularly. They get this great service by merely paying for their subscription package.

What Types of E-commerce Subscriptions Can You Use?

The best thing about e-commerce subscriptions their ability to work for practically any kind of product or service. It’s just a question of taking the right approach. So, let’s take a look at three e-commerce subscription businesses that work.

#1: Continuous Subscription Model (Example - Hulu)

Hulu is a classic e-commerce subscription model. It is an entertainment streaming service based on a monthly fee system.

Here is a look at their current offers:

e-commerce subscription platform
Source: signup.hulu.com/plans

Hulu’s subscription-based model works because it offers customers various options to choose from. As such, customers can select the package that best fits their needs. For instance, they can choose the basic Hulu bundle for $13.99 a month if customers want the ultimate package with no ads, which costs $75.99 monthly. 

#2: Delivery Subscription Model (Example - Hello Fresh)

HelloFresh is an e-commerce subscription that brings fresh ingredients to your door. This subscription-based model provides customers with meal kits to prepare healthy and delicious recipes. Here is a look at the plans HelloFresh has to offer:

what is a subscription model
Source: subscriptionista.com/2016/01/hellofresh-subscription-box-review-january-9th-2016/

This e-commerce subscription service works because it gives customers the flexibility to choose the ingredients and the number of meals in each kit. The packages provide food for various types of diets and preferences. 

Also, this subscription-based service works because it offers a much greater convenience than going to the supermarket to get fresh ingredients. 

#3: Self-Service Subscription Model (Example - Yoga International)

Yoga International is an online yoga and wellness company. They promote health and fitness through their online courses and classes. Students can access yoga training sessions on a pay-as-you-go membership format. Students pay for the training sessions they want. 

Here is a look at this great e-commerce subscription model:

companies using e-commerce subscriptions
Source: yogainternational.com/start/default-en

This e-commerce subscription makes sense because it customizes virtually every aspect of its service. Students can pay for what they need when they want it. This approach helps eliminate potential commitment fears. 

In particular, customers may fear acquiring a subscription service they will never use. Such is the case with most gym memberships. That doesn’t happen with a service such as Yoga International. By offering pay-as-go plans, you can greatly reduce the stress that comes with signing up for a subscription service.

8 Advantages of an E-commerce Subscriptions You Can’t Ignore

There are lots of benefits that come with an e-commerce subscription model. Let’s take a look at some of them more closely:

#1: E-commerce subscriptions model is easy and convenient

A solid e-commerce subscription model takes the guesswork out of customers’ decisions. As a result, they don’t need to think too much about the products or services they are getting. Customers can expect to get their money’s worth. 

For example, customers don’t need to spend time shopping around for products they regularly use. They trust your brand to give them what they want and need.

Here is an e-commerce subscription example to consider:

e-commerce subscription examples
Source: firstleaf.club

Firstleaf is a subscription wine service. Customers sign up to get great wine recommendations delivered to their door. Best of all, customers fill out a quiz about their drinking preferences. Firstleaf takes care of the rest. 

This e-commerce subscription service works because customers get what they want without having to figure out which wine works for them. Customers get great, personalized recommendations based on their individual tastes. 

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#2: Enhanced Product Discovery

An e-commerce subscription service is a good way to introduce new products. In particular, e-commerce subscriptions allows customers to try new products they may not have thought about. 

Here is a great e-commerce subscription example focused on product discovery:

e-commerce subscription services
Source: snackcrate.com/how-it-works

Snack Crate is a snack subscription service that delivers wonderful snacks from around the world. Each month, customers get to sample curated snacks from around the world. 

This approach allows customers to discover products they might not have otherwise tried. As a result, this e-commerce subscription model perfectly introduces new products.

#3: Better revenue forecasts and projections

Utilizing an e-commerce subscription model allows companies to find predictability in their revenue streams. As such, a subscription-based approach gives businesses certainty in projecting income. As a result, this certainty facilitates cash flow management, inventory management, investment, and payroll flexibility.

Implementing an e-commerce subscription model makes sense as the Subscription Economy is a fast-growing segment. According to the Subscription Economy Index, the Subscription Economy saw a 16.2% jump. With that type of growth, businesses must consider adopting an e-commerce subscription model to boost their overall revenue streams reliably.

#4: E-commerce subscription models attract customers

Sometimes, customers are wary about trying a new product or service. A creative subscription can minimize these apprehensions by providing various options. For instance, companies offer packages starting at introductory prices while allowing customers to upgrade easily. 

As such, customers can try a no-strings-attached plan and work their way up to a more expensive one. Typically, introductory plans are free but with limited options. Nevertheless, customers can upgrade to a paid subscription plan to unlock specific features.

Here is a great e-commerce subscription example:

e-commerce subscription advantages
Source: spotify.com/us/premium/#plans

Spotify is renowned for offering various subscription options. Customers can choose the free subscription, which comes with limited options and ads. Spotify encourages new users to try it for free. When customers are ready to upgrade, they can choose one of the plans above. 

#5: An e-commerce subscription model reduces costs

Overall, an e-commerce subscription platform reduces costs. These costs are generally associated with customer acquisition and management. After all, once you have signed up a customer, you don’t need to worry about selling to them again. You can be certain your customers will be on board for the foreseeable future. 

When it comes to new customers, an e-commerce subscription model allows you to reduce marketing expenses and adjust your marketing strategies

How so? 

You can use the power of referrals to boost your new customer acquisition.

Here is a great e-commerce subscription model example:

examples of e-commerce subscription model
Source: referralcandy.com/blog/subscription-referral-program-examples

The Sportsman’s box is a subscription service by Buddy Outdoors that caters to hunters and anglers. Their subscription service provides monthly or quarterly gear kits to its subscribers. In the example above, we can see that referring a friend nets both parties a $5 bonus. 

This approach works well because it uses the power of referrals to attract new customers. In the end, using referrals significantly cuts down on marketing and customer acquisition costs. Indeed, it is worth giving it a try.

#6: Build brand loyalty

E-commerce subscription services help build brand loyalty. In particular, subscribing to a service drastically reduces the likelihood of switching to another brand. After all, switching to another brand means canceling the first subscription and then adding a new one. 

Please remember that it’s crucial to take care of your customers. An e-commerce subscription platform is not something you can set and forget. Neglecting to manage your subscription service can lead to subscription churn. 

upselling apps for shopify

Subscription churn refers to losing subscribers once you’ve got them. The overall churn rate for e-commerce subscription platforms is about 5.6%. This figure means that most subscription services can expect to lose 5.6% of their customers in less than three months. 

What does this mean? 

It means subscription-based services must stay on their game to ensure they don’t lose customers. Losing customers means doubling down on efforts to attract new customers.

#7: Any product can become a subscription service

The biggest advantage of subscription services is that virtually any product can become a subscription. All it takes is thinking outside of the box.

How far outside of the box?

Have you heard of the “Bagel of the Month Club?” This e-commerce subscription service ships subscribers specialty bagels every month. Customers can also purchase individual orders from the shop, too.

Here is a look at the basic monthly subscription:

types of e-commerce subscriptions
Source: bagelofthemonth.com/collections/new-home/products/13-new-york-bagels-subscription

This subscription model is effective because it is one of the various alternatives customers can choose. The Bagel of the Month Club does not rely solely on its subscription service for revenue. 

It is one of the weapons in its arsenal. So, trying a subscription service in addition to your usual business model is a good idea.

#8: Subscriptions increase personalization

An e-commerce subscription model allows you to personalize your customers’ experience. At the same time, you can offer curated packages to suit various tastes. Ultimately, you can provide the best of both worlds. This approach allows you to cast a wide net without overwhelming your customers.

Here is a great e-commerce subscription service example:

benefits of e-commerce subscription model
Source: harryanddavid.com/h/fruit-clubs/wine-cheese-club

Harry & David is a wine and cheese pairing subscription service. With this subscription, you get great wines paired with the best types of cheese. Subscribers get a curated package every month. 

Also, subscribers can choose how long they want to sign up for. We can see how this brand mixes its curated packages with the flexibility of choosing the best subscription package. 

What is the Best Subscription Platform for E-commerce Sites?

So, you’re sold on using a subscription model for your e-commerce site. However, you might be wondering what the best e-commerce platform is for your site. 

Shopify offers subscriptions, as it allows e-commerce sites to integrate third-party subscription service apps easily. These apps quickly plug into your site without the need for complex coding. Best of all, most Shopify subscription apps come with various payment plans and options to suit your business needs. This approach makes Shopify among the best alternatives for your e-commerce subscription model.

With e-commerce subscription models quickly gaining momentum, you cannot afford to overlook them. Take the time to think outside the box. There is surely a way that you can transform your brand’s unique value proposition into a killer e-commerce subscription service.

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