Even before a global pandemic brought the world to a screeching halt, subscription eCommerce has seen rapid growth.
On top of this, global eCommerce subscriptions will make up 18% of the total market share.
A replenishment subscription allows customers to buy essentials and consumables on repeat. Categories that benefit from this model include toiletries, groceries, pet food, vitamins, etc.
Dollar Shave Club is an excellent example of this model.
Since this model puts replenishables on autopilot, it has the advantage of higher retention rates.
However, making these subscriptions valuable to consumers means giving a lot of discounts, resulting in lower profit margins. But the higher volumes often offset lower margins.
The curation model is probably the most well-known application of subscriptions in the DTC and ecommerce world.
It includes providing a collection of products and services personalized to the customer’s preferences.
Birchbox is a great example. Customers receive a handpicked collection of products in categories selected by them.
Subscribers look for highly personalized product curation, and they’re prepared to pay a premium price.
However, retaining customers can be a challenge and a brand should be prepared for additional expenses with creative packaging and personalized touches.
Just as the name suggests, subscribers pay a membership fee for access to an exclusive community or early access to products.
NatureBox sells organic and healthy food options and follows this model. Notice the "member discount" on each item 👇
If subscriptions is a topic you’re interested in learning more about, email us and let us know!