The ecommerce subscription model has gained serious momentum in recent years, evolving from a basic system of recurring deliveries, to a sophisticated customer loyalty initiative. Sales from ecommerce subscriptions increased by 41% in 2020, and are only expected to continue growing. In fact, subscriptions are forecast to account for 3% of all US ecommerce sales in 2021.
If you haven’t already invested in a subscription model for your ecommerce business, now is the time to get on board. Keep reading to learn how ecommerce subscriptions work and which retailers are leading the way.
What is an ecommerce subscription model?
Put simply, a subscription-based ecommerce business model offers certain benefits to loyal customers in exchange for their repeat business. While this can take many forms, it usually involves shoppers signing up to receive regular deliveries of discounted products for a certain period of time.
Why should you consider this model? Well, subscriptions and other forms of brand membership are all about building loyalty, which is crucial in an increasingly competitive ecommerce landscape. Acquiring new customers is costly. By offering tangible perks to repeat shoppers, online retailers can increase their customer lifetime value while building a buzz and sense of community around their brand.
Which industries have the most successful ecommerce subscription models?
In short, almost every ecommerce retailer can find a subscription model that fits their customers’ needs. Beauty brands were among the first to offer customers recurring deliveries of their favorite, frequently-purchased products. Home essentials such as cleaning products also proved popular in early ecommerce subscription offers.
But what began as a convenient delivery option quickly transformed into a more membership-focused model, thanks to innovative brands across the ecommerce spectrum. Everything from fashion, home decor, food and wine, gardening, and crafts, loyal shoppers have been quick to sign up for a regular hit of their favorite products across a range of verticals. Product type aside, the most successful ecommerce subscription models all have one thing in common: they go beyond repeat deliveries to create a tribe that their members can belong to.
3 online retailers nailing the subscription-based ecommerce business model
Subscription models don’t have to follow a defined set of rules. Take inspiration from these three trailblazers and get creative with your approach.
Pura Vida is a lifestyle brand specializing in ethically produced, socially conscious jewelry. As pioneers of the subscription-based ecommerce business model on Shopify Plus, Pura Vida quickly became one of the platform’s most successful and recognizable brands. Subscribers to their Bracelet Club receive three new bracelets every month, as well as free deliveries, early access to sales, and loyalty “Shore Dollars”.
“We have always been committed to meeting the evolving needs of our Pura Vida community of online shoppers,” says Margaret Odisho, Ecommerce Manager at Pura Vida Bracelets. Innovative since day one, the brand has experienced exponential growth, and recently implemented a merchandising strategy that delivers an experiential buying journey.
Activewear brand Fabletics takes a membership-based approach to their subscription model, with VIP customers signing up for reduced prices, free delivery and returns, and access to the brand’s fitness app. Members redeem their monthly subscription fees against discounted products, with the option to skip a month whenever they choose.
“We pioneered the flexible membership model, giving customers the option to choose whether they want to shop or skip each month,” said Jamieson Yee, SVP, Global Product & QA at TechStyle Fashion Group. Targeted merchandising and intelligent site search complement this model by enhancing product discovery to reflect VIP members’ shopping patterns across Fabletics’ extensive catalog.
Dia&Co’s ecommerce subscription model pairs customers with dedicated stylists who curate individual “Dia Boxes” to meet their fashion needs. Shoppers can try on the products at home, provide feedback to the stylists to help shape their next box, and receive a discount if they decide to keep everything inside. Themed bundles are also on offer, allowing shoppers to purchase pre-selected collections of “sweater weather” or “staycation” styles.
Additionally, shoppers can return to Dia&Co’s ecommerce store to purchase more of the brands and styles they discover through the subscription boxes. Features like a denim sizing quiz, as well as advanced search and filtering have made this shopping experience seamless and extend beyond the subscription.
Build customer loyalty with an ecommerce subscription model
Subscription models for your ecommerce website can take many different forms. The key is to find a strategy that works for both your product and your customers. Whether it’s a monthly surprise package straight to their door, recurring deliveries of your brand essentials, or a personalized curation of products, an ecommerce subscription model is guaranteed to delight your most loyal fans while securing repeat business for your online store.