There is no question that consumers love convenience. From grocery delivery to streaming the latest Netflix show, subscription services are growing at an alarming rate.
According to McKinsey & Company, the subscription eCommerce market is expected to reach $473 billion by the year 2025. This was up from only $15 billion in 2019, a staggering jump in just a few years. Clearly, this is a golden opportunity for businesses.
How To Get Started With Your eCommerce Subscription Service
Thinking about launching your own eCommerce subscription service but don’t know where to start? Keep reading to find out how you can get started.
1. Create Your Customer Avatar
Before you begin, it is critical to determine who will be your ideal customer. Define what is your target audience’s psychographic, demographic, and behavioral data.
Determine your customers’ needs and whether they will be willing to pay for subscription services.
2. Identify What’s Lacking
Having in-depth knowledge about your niche is key to maintaining loyal, paid subscribers for an extended period of time. Knowing your niche is also about getting intimately acquainted with where it falls short.
See where your competitors are lacking and find ways to deliver this missing link to your customers.
3. Differentiate Yourself
Having a clear Unique Selling Proposition or (USP) is what will set you apart from your competition. Is your offering unique in a valuable way? Do you provide hassle-free returns and faster delivery?
You must also clearly define how customers will ultimately benefit from using your subscription service versus a more traditional method.
4. Choose A Subscription Model
Based on your customer’s avatar, your niche, and your USP, you can now determine which type of subscription service to offer. An example can be, if you provide consumable products that your customers need on an ongoing basis, then a “replenishment-focused” service is exactly what you will need.
5. Adding A Subscription Service To Your Current Operation
When it comes to adopting this business model into your existing operations, your purpose should be to provide additional value to your customers’ experience.
The idea is to keep your “main offering” intact (provided that it’s successful), with your subscription service adding additional value.
If you are looking to add a subscription model to your current operations:
- Download, install and set up subscription-devoted plugins that are offered on your eCommerce platform.
- Develop website and content pages that focus on your subscription services
- Create and deliver “pre-launch offers” for your current customers, encouraging them to subscribe to your new service and to encourage others to sign up as well.
- When your subscription service goes live, then it’s just a matter of testing and refining your services and customer experience.
Why Start A Subscription Business?
If the numbers are not enough to convince you, there are more reasons why launching a subscription eCommerce business can be enormously beneficial:
1. Foreseeable Income
With predictable income, you are able to conduct sales forecasting and inventory planning in a more efficient way. More importantly, you will be in the position to invest in the growth of your company.
2. Increased Cash Flow
Since most subscription businesses require payment upfront, it allows businesses to have immediate cash flow. Also, unlike regular eCommerce retailers, you don’t need to worry about monthly or even seasonal fluctuations in sales.
A subscription model lends itself well to providing valuable insights into your customers’ behavior. This allows you to create a more personalized experience, encouraging your customers to keep coming back.
Subscription Services Are Here To Stay
With more businesses and industries jumping onto the subscription model bandwagon, it is expected for competition to intensify. The real winners in this model will be the ones who take a more “consumer-centric approach”. It’s where the right combination of value, product options, and flexibility intersect to delight customers and create a robust business.