The eCommerce subscription industry has seen remarkable revenue growths of over 350% in the last 7 years. That’s over $15,000,000,000 in the last decade!
To put that in perspective the revenue generated from subscriptions has consistently outperformed the stock market.
$15,000,000,000 in revenue over the last decade
If you’re not selling subscriptions in your ecommerce shop now’s the time to reevaluate your business plan.
During 2020 many companies closed or saw a major loss in revenue throughout the world. The industries coming out of 2020 unscathed have proven to be those selling online subscriptions.
A 25% increase in growth was reported by the following 5 industries in 2020:
- OTT VIDEO STREAMING
- DIGITAL NEWS & MEDIA
- COMMUNICATIONS & SOFTWARE
- TELCO & UTILITIES
Video streaming services saw 7 times the amount of growth in March 2020 alone in comparison to the previous 12 months. While digital news and media outlets along with e-learning saw almost 3 times the amount. The secret to their success was selling subscriptions.
Let’s look at some key steps you can take now to increase your customer retention and acquisition by offering subscriptions.
While subscription boxes are a pretty hot commodity bringing us anything from plants to travel experiences there are 3 main types of subscription services. Replenishment, Curation, and Access.
Replenishment focuses on regular deliveries of consumable products. Think of your Subscribe and Save order or your weekly vegetable box.
Curation subscriptions offer products hand picked based on the subscriber’s taste and interests. Access subscriptions are typically focused on memberships like streaming services or wholesale clubs. They sell an experience to the customer rather than ownership of a tangible product.
All subscriptions services generate recurring revenue providing store owners the ability to forecast their future income. Knowing what your revenue will look like in the days to come allows you to strategize for future development. It also provides flexibility to change directions quickly when unexpected economic events occur, instead of being highly focused on maximizing cash to stay afloat.
Many of the subscription businesses surveyed during the pandemic reported their ability to offer special promotions, trial periods and discounts played a role in customer acquisition and retention.
Digital subscriptions are worth an added mention. SaaS or coaching services, these products can be accessed through the cloud from anywhere. This alleviates the need to rely on suppliers for the product especially when facing a global pandemic. Digital subscriptions are not held up by disruptions in manufacturing or shipping.
What can we learn from this last year? Don’t be caught unprepared. Companies that were not prepared to offer digital services struggled to grow and keep pace with an unpredictable economy. Digital subscriptions provide store owners with the ability to increase subscribers, maintain a customer base and adapt to the unknown. Changes can easily be implemented like trial periods and special offers, retaining customers, and adapting to the unknown.
Let The Data Speak
Now more than ever data is at our fingertips. If you’re not using any tools for collecting data it’s time to reevaluate. Invest in tools that allow you to easily collect feedback from your subscribers. Have them tell you what they want. Then convert the data into metrics you can use to build subscription offers custom-tailored to these insights.
Don’t ignore the facts.
With the internet, subscribers have the world at their fingertips. They can easily find another subscription service. What makes your offer better? In an ever-changing economy gathering insight and reevaluating is an ongoing process. When you listen to your customer’s voice you’ll find the answers you need to be successful.
The Customer Comes First
Customers want to choose and self manage their subscriptions. Provide flexibility and customizations specific to the needs of the individual subscriber.
Companies that saw continued growth throughout 2020 were able to offer their customers the ability to pause or skip a payment on their subscription. With income being unreliable for some consumers, having a subscription that adapts to their personal circumstances shows that you understand and can relate to their individual needs. You will no doubt exceed the customer’s expectations creating brand loyalty.
Make subscriptions easy to use. Spend time reviewing how your website looks on both desktop and mobile devices. Most people have a smartphone with internet access, chances are they will make changes to their subscription anywhere at any time of day. Is your website optimized for mobile use? Customers will need to shop and update their preferences from a mobile phone or tablet.
There are a number of platforms out there to choose from for your eCommerce business. Finding one that suits your needs may depend on what website builder you’re using.
For WordPress users, WooCommerce and WooCommerce Subscriptions make it easy to add subscription capabilities to your store. It will support both simple and variable subscriptions. You can find out more about selling with WooCommerce on our blog.
Other popular subscription platforms include Easy Digital Downloads with Recurring Payments, Shopify, Magento, Subbly, Sellfy, and Recurly. Each platform has its own strengths and weaknesses. We recommend investigating which option is right for you before getting started.
Subscriptions businesses continued to see growth throughout 2020 almost surpassing pre-pandemic levels. While you don’t know for sure what will happen in the future you can take steps to prepare for it.
Take steps now to improve your online offerings. Get to know who your customer base is. In 2020 consumers have grown more accustomed to online shopping. Offering customer-centric subscriptions will be your key to client retention, continued growth, and most importantly weathering any storm.