Why Subscription Ecommerce Is Here To Stay, 2015 And Beyond

Subscription e-commerce is a unique business model with multiple benefits. Of late, the success and popularity of much-discussed companies like Birchbox and Dollar Shave Club showed us that just about any business selling fast moving, rapidly consumable physical goods that need replenishing can act on this trend. This led to a massive adoption of this business model for different niche categories. Different subscription business models have now become a sure bet for success if skilfully applied. The following reasons will give you a clear idea on why this business model is here to stay in 2015 and beyond.

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 Amortize acquisition cost over multiple purchases

Since subscription commerce accelerates repeated purchases the acquisition cost per customer will be reduced to bare minimum. This helps you spend a lot more to acquire new customers and convert them into long-term subscribers of your product/service.

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Build loyal customers through constant contact

Subscription commerce requires constant contact with the customers through multiple channels. A business that can successfully engage customers with constant contact will have several loyal customers. The reason is that communication helps businesses learn more about consumer purchase patterns as well as behaviour and probably predict their future needs. As far as the consumers are concerned, businesses help save their time and money since everything is delivered to the doorstep at minimum cost.

 

Consistent income with the minimum sales effort

The beauty of subscription commerce is in its ability to generate consistent income from repeated purchases. Since your customers always encourage you to be in constant contact with them (due to the benefits they are receiving) you have the advantage to communicate with minimum sales effort. Apart from that, since majority of your sales will be from repeated purchases, you can concentrate your sales effort on acquiring new customers.

 

Upsell and Cross-sell products with ease

Upselling and cross-selling are important methods to get your consumers to spend the maximum on every purchase. By adopting subscription commerce you can easily do this by analysing customers’ purchase patterns. For e.g., if you find that a customer is purchasing a particular product consistently you can give the offer to encourage them into buying that product in bulk, or you can suggest another product which can be used along with this product. There is always a high probability that customers will consider your recommendations.

 

Streamline operation

Under this business model your company will always be involved in routine procedures in almost every department like sales, marketing, delivery etc. Routine procedures will help you in streamlining operations which helps to achieve better efficiency.

 

SEE ALSO: Top 5 Successful eCommerce Business Models

 

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