Expert Knowledge / Ecommerce
Subscription ecommerce is the digital offering of products or services being delivered on a regular basis – usually monthly – with payment automatically taken from the customer. They have become a lifestyle habit for many customers due to their convenience and ease.
The opportunity and the weakness of the subscription market lie entirely in the company’s ability to develop a convenient experience for the consumer. If the journey is seamless, then they have provided a friction-free experience that customers will be willing to change their shopping habits. However, if it is hard to change and creates ‘hassle’ then there is little chance of a customer returning and trying again.
Beyond the basic best-practice of an e-commerce solution, the key considerations for a seamless and convenient subscription user experience include; easy to change the products ordered, easy to change the frequency of the delivery and easy to pause or cancel the subscription. This sounds straightforward, obvious even, yet many subscription services struggle with the user experience, communication and changes needed in order to ensure a smooth subscription experience.
If you’re going to launch a subscription service, you need to understand the basics of CPA (cost per acquisition) and attribution modelling. Cost Per Acquisition is often higher than a standard e-commerce consumer because there is a perceived longer commitment upon purchase. However, the Lifetime Value of your customers is also higher due to recurring revenue. The longer a subscriber stays loyal to your brand, the higher your retention rates and the greater their customer lifetime value (CLTV). This means you’re getting much better value for money when it comes to acquisition spends, which is great news for your profit margins.
The majority of the time, the reason why the user experience is limited is that the e-commerce platform selected is not fit for purpose. When lots of customisation is required to then create the correct user experience, it can cause problems and glitches that deter a consumer and make the experience painful rather than hassle-free. When we recommend subscription e-commerce, we usually select either WooCommerce or Shopify, depending on the scope that is required. These two platforms tackle the majority of issues that subscription businesses face and are well established, so even if something new or unexpected cropped up – they can handle it.
As a subscription retailer, you know how many subscribers you have and how much stock you need. There’s less risk of unpredictable demand on your fulfilment, provided you also know your retention rate. As a result, you can anticipate demand and supply with confidence, helping to make your business processes much more consistent.
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