Subscriptions 101

Subscriptions are all around us these days—and not just in the news we read and the TV shows we stream. From coffee to cleaning supplies to pet food to meal kits, there seems to be a subscription for everything these days, and the industry doesn’t show signs of slowing down. Industry analysts expect the global subscription market to reach $478 billion by 2025. In ReCharge’s annual  State of Subscription Commerce report, they found that subscriber growth increased 91% from 2019 to 2020, with average order value (AOV) up across the majority of verticals. Let’s take a look at what makes subscriptions so enticing.

Recharge categorises subscriptions into three business models: curation, replenishment, and access. Below we’ll define what each means and which verticals tend to work best within each type.

CURATION

The most popular subscription type historically and the one that sparked the subscriptions movement in ecommerce originally is the curated box. These boxes are filled with various products picked by the brand and sent to the customer at a regular interval. The value proposition with a curated box, or subscription box, is the surprise and delight feeling customers get when opening a box they know was chosen specifically for them and upsell/cross-sell opportunities. Curated boxes work great for Fashion & Apparel, Food & Beverage, or even a Pets & Animals vertical.

REPLENISHMENT

With replenishment subscriptions brands ship the same products on a consistent basis. This gives shoppers the ability to ‘subscribe & save’ by receiving a discount for having the same product sent to them. While certainly less exciting than a curated box, customers who subscribe to a replenishment model are looking for consistency in their products. The convenience of this model outweighs the desire to be surprised with each shipment.

Merchants who offer consumables, often within the Home Goods, Health & Wellness, or Beauty & Personal verticals, are the best fit for this type. A brand like Pure For Men, a wellness brand for sexual health, is a perfect match for this model. Recharge and Propeller partnered with Pure For Men to launch their subscription practice and continue to implement best practices to help them scale.

ACCESS

Access subscriptions are also known as the membership model. In this subscription type, merchants will offer subscribers access to a service, or membership with benefits like early-release products, free shipping, or discounted items. Many streaming subscriptions that give members access to gated music, video content, or audiobooks, as well as some publications that offer access to gated digital content, fall under the access subscriptions category.

BUILD & OPTIMISE A RECURRING REVENUE STREAM

By its very nature, the recurring payment model creates predictable revenue on a set cadence. This can make certain aspects of ecommerce businesses, such as inventory management and forecasting upcoming revenue, both easier and more accurate.

Key to maximising this benefit: having reliable analytics to optimize the subscription offering as it grows. In ReCharge’s 2021 State of Subscription Commerce Report, they found that the best subscription brands leverage integrations and analyse data to make informed business decisions and pivot when needed.

CREATING A COMMUNITY AROUND THE BRAND

Contrary to one-time purchases, subscriptions allow for merchants to turn transactions into long-term relationships with their customers. All three subscription types have their benefits, arguably none larger than the ability to get closer to your subscribers. Ultimately, subscriptions are a vehicle to deliver a better customer experience than one-time purchases ever can. With the ability to track performance over time and multiple touch points to connect with customers, the subscription business model is uniquely primed for fostering customer relationships.

Top-performing subscription businesses are able to find ways to continue to add value beyond simply selling their products. Social media interaction, displaying customer reviews, or hosting feedback sessions are all ways for a brand to maintain and grow a relationship with their top customers.

FullGreen worked with Propeller to create their subscription program in which they pull in reviews to support social validation for their products. Take their riced cauliflower which allows the customer to choose the size of the package as well as quantity and delivery frequency.

The Recharge subscriptions payment solution was designed to take the guesswork out of setting up and managing subscriptions for your store. By creating a reliable and simplified experience for the entire process, Recharge allows you to focus on building long-term relationships with your subscribers.

 SCALABLE PLATFORM

Whether you have 1 customer or 100,000 customers, Recharge is built to scale with you. Through the Recharge subscription payments solution you can:

• Drive sustainable revenue growth
• Improve subscriber loyalty
• Leverage integrations for an enhanced customer experience

 MEET CUSTOMERS WHERE THEY ARE

With Recharge’s intuitive design, you can meet customers where they are, leveraging the customer portal. On any device, your customers can:

• Customise their subscription journey with you
• Add one-time products, allowing you to increase average order value (AOV)
• Skip a subscription cycle, or reschedule delivery
• Swap products, allowing you to cross-sell
• Receive notifications of upcoming orders or shipping details

With subscriptions through Recharge, we understand that it’s more than just a transaction… it’s a long-term relationship. And that relationship starts right now.