Recurring payments and recurring billing are the cornerstones of the ecommerce subscription business model.
For customers, the ability to input their checkout details one time for a recurring shipment is highly convenient and beneficial. You have probably been prompted for a credit card at checkout and then had to track down where your wallet or purse is hiding.
From the merchant side, consider how many people abandoned checkouts are avoided because customers vault their payment information with your store. Merchants also gain the tremendous benefits of recurring payments, like predictable revenue and inventory planning, multiple touch points to build rapport and brand loyalty with consumers, and a higher average order value (33% on average)
Consumer readiness for recurring payments
Consumers have been familiar with recurring payments since long before the internet. For decades, Magazine subscriptions and weekly newspaper deliveries have habitually shown consumers that they can be charged at regular intervals and receive products and services regularly.
Then with the advent of the internet and the boom of ecommerce merchants, consumers, especially those in the Millennial and Gen Z demographics, have grown very comfortable with recurring payments. When the value of a product or service is demonstrated, for example, a $8-a-month Netflix subscription, the barrier to entry is relatively low, and adoption can spread quickly.
The convenience factor of a recurring payment
Automated recurring payments allow customers to “set it and forget it.” And then, with regular reminders of their upcoming shipments or credit card billing, customers stay informed and in control of their subscriptions without having to go through the checkout process every time.
With monthly subscription boxes, products are delivered directly to a customer's doorstep, creating the long-term relationship many companies strive for. Offering options like various regular intervals to receive a shipment or one-time purchases give customers the flexibility and autonomy to customize the payment schedule. An excellent example of this functionality is in Blume’s product checkout. They allow their customers to purchase a one-time product or save on a subscription and select their payment schedule.