The ecommerce subscriptions industry is exploding, and businesses seeking to leverage this surge should be aware of its mechanics and value, as Jay Myers, co-founder of Bold Commerce, explained recently at the virtual Modern Commerce Day event, produced by commercetools.
In a talk hosted by Matthew Finch-Noyes, director of partnerships and growth at Myplanet, Myers first broke down the key statistics: 78% of adults subscribe to at least one service, while several years ago that figure hovered around 50%. The top five companies in the Fortune 500 list embrace subscription models, and more than three-quarters of customers surveyed noted how subscriptions are convenient.
“Subscription brands have better data on their customers and can give better service to them, so it’s really a win-win,” Myers said.
Delivering on customer expectation
He went on to explain the mechanics of a successful subscriptions brand. It used to be simple for brands to simply implement a “Subscribe & Save” offer or to focus on replenishment programs. “That was fine seven years ago but customers want their subscriptions to be more sophisticated and to give them, say, VIP access or the opportunity to get exclusive products,” Myers added.
A brand powered by high performance APIs can customize every element of their subscription business in order to diversify the type of framework that fits with their business, Myers said. So one brand may prefer the personalized model where delivered boxes match the customer’s needs, as seen with the rise of pet-food supplier Kong Box.
Another brand can opt for the “builder style” model often used by meal plans, and in the talk Myers cited Evive as a Bold-powered business taking advantage of this approach. “Subscribers to this smoothies brand can add different flavours each month and can edit their selection as they go,” Myers said, noting how flexibility and seamless interaction with the subscription helps create customer confidence in the business.
As for the value of adding a subscription layer to a brand’s ecommerce offering, Myers said it comes down to building a bond with customers. “It’s about relationship management. We’ve seen how 92% of subscribers log into their customer portal at least once since subscribing, so brands have an opportunity there to build that relationship with customers and get more value out of them.”
Building a sustainable subscription stack
What is also beneficial for subscription brands is how they have the potential to build a subscription stack, Myers explained. “A coffee-based subscription brand may want to have aspects of access, curation and replenishment in what they offer. And they can make each subscription flexible enough for their customers.”
Throughout the conversation, Myers broke down the value of each pillar of the subscription stack:
Finally, Myers recommended that strategic brands bring creative ideas to how they layer subscription offers on their store. “Why not look at where in the checkout flow you can introduce cross-sell or upsell opportunities?” he said. “See where you can add a referral program. And remember, try to think outside the box.”