E-commerce trends are evolving very quickly. Remember how you shopped 10 years ago and now? Innovative technologies have changed our perception and shopping experience.
For example, in 2013, e-commerce accounted for 6% of retail sales in the US, and in 2021, online sales account for more than 14% of total purchases. Statistics show that interest in subscriptions is growing faster among millennials and men.
eCommerce subscription business model – what is it?
A subscription model is a business model in which customers pay for recurring deliveries of products or services. Usually, these are systematic write-offs.
In e-commerce, companies enter into a permanent contract with customers, delivering the same product on a regular basis. Customers then receive a recurring invoice.
Types of subscription models in e-commerce.
There are several types of subscription models that you can easily adapt to different industries.
An autoshipping subscription is a business model in which a customer subscribes to regular deliveries of the same type of product.
2. Curated box
Subscription option for customers to boxes with goods. An example would be the ability to receive a regularly defined set of goods for a fixed amount. This may be a subscription from different brands that are engaged in the production of decorative cosmetics. Pay $14 and get a trial kit every month.
An access subscription is the ability to pay a monthly or yearly fee to access e-commerce subscription services. The customer has the opportunity to choose which e-commerce products they want. Companies that successfully use this type of subscription: Netflix, YouTube, Apple Music, Spotify, and others.
Basic eCommerce business classifications.
B2B is focused on providing the products of one business to another. Key examples include ExxonMobil Corporation, Chevron Corporation, Boeing, and Archer Daniel Midlands. They have their own B2B eCommerce platforms that successfully work directly with other reps.
E-commerce between business and consumer. This is the traditional retail model where a business sells goods to individuals online rather than offline.
E-commerce from consumer to consumer. These are the sites where you successfully sell products. Successful examples include eBay and Craigslist.
E-commerce from customer to business. In this model, a consumer sells goods or services to businesses, and is roughly equivalent to a sole proprietorship serving a larger business.
Why is the eCommerce subscription trend on the rise?
There are various factors that influence the development of this model. To better understand the specifics of the tool, delve deeper into the details of business models and learn.
1. High customer retention rate
Attracting new customers is always more expensive than retaining existing ones. The subscription commerce business model eliminates the need to acquire new customers. It helps you keep them and increase your revenue through upsells and cross-sells of related products.
2. Increasing business predictability
This tool helps the client understand what exactly he will receive, when, and at what time he needs to make a payment. It makes the purchase predictable and consistent.
3. Subscriptions are the future of e-commerce
As you can see, eCommerce business models are evolving rapidly. And it would seem, who wants to use a subscription? And it has already become the norm for most people.
It is they that stimulate a person to make regular purchases due to their convenience and predictability. Moreover, they seriously increase brand loyalty.
Attracting customers, predicting and increasing revenue, strengthening relationships with a client – all this will allow you to do a subscription. Subscriptions in e-commerce are changing the way consumers and companies interact. We summarized the most important thing that explains such hype regarding this business model in an accessible way:
- Subscription services are attracting more and more customers because of the value they get convenience, personalization, and variety.
- The loyalty you get as a result is a key factor. Modern business must certainly focus on innovation and provide the customer with consistent quality and value. And then they will be with you for a long time!