All across the globe, subscription-based business models are booming, and changing the face of e-commerce along with them. In fact, visits to subscription retail websites have increased by over 800 percent since 2014. A subscription retail business is a company that sends you a package, usually once a month, of items they’ve picked out for you.
There’s a wide variety of industries taking advantage of the subscription model. Some examples include: Birchbox, which sells beauty products, Trunk Club, sells fashion and Blue Apron sells ingredients for a complete meal you prepare at home. All in all, the subscription retail model is a whole new way of selling products.
With that in mind, these are not new types of products, they’re actually categories that consumers already know. Subscription companies don’t create new types of products, they’re a new way to sell existing types of products. Subscriptions don’t change what consumers want, subscriptions get consumers to look at existing products in a new way, according to Forbes.
The execution of a subscription-based business model requires a well thought out shipping strategy. To avoid unhappy customers, retailers must continuously revisit their shipping strategy and streamline fulfillment and delivery processes, all while keeping prices as low as possible. It’s a fine balancing act, but one that becomes more achievable once you identify the right shipping partners, according to Business News Daily.
There are a variety of subscription-based models. The most common of which is where the customer receives a monthly box of goods and selects the products they want to keep, being charged for only what they keep. Usually, there is some sort of price incentive for keeping everything in box, resulting in a great deal for both the seller and the subscriber. That said, one thing is very clear about subscriptions: they don’t last forever. At some point, the customer will end the subscription. It could be five day or five years from now, but every subscription will run its course. The key to enhanced profitability for subscription businesses is selling products that are good enough to lengthen the life of the average subscription.
The subscription model is a key factor in the future growth of e-commerce. That’s because e-commerce is all about convenience for the consumer, and what’s more convenient than a monthly delivery of products you know you like?
If you’re interested in learning more about adopting a subscription-based business model, but don’t know how you would ship your products, SmartWay has the solution you need. Learn about our full range of services.