5 reasons to introduce subscriptions

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Leigh Mardon

Reading time: 3 minutes

Netflix, Spotify, Amazon Prime; it’s likely you’re signed-up to at least one of these services. In this digital era, the idea of online subscriptions is nothing new, opting for monthly fees over one-off transaction is seen as convenient and good value for money.

This model has particularly taken off from an eCommerce perspective, online retailers who offer physical products to people who sign-up have grown by nearly 3,000% and it’s continuing to rise. One of our clients, teapigs, are at the forefront of blubolt’s subscription model and are incredibly pleased with the results of our latest version.

With a supposed rise in popularity, why are more companies opting to introduce them alongside their current business model?


Why offer subscriptions?

More and more people are signing-up for physical subscriptions because they take the stress out of decision making. Depending on the product, they’re considered a novelty treat, the convenient option or a unique gift to send someone. Subscriptions are doing increasingly well in eCommerce and by introducing one into your business, it can prove highly beneficial to both your company and your customers.

1.Recurring stream of revenue

One of the benefits of having a buyer sign-up for regular purchases means you can introduce a stable, recurring stream of revenue for your business. eCommerce can be fickle, sales can spike and dip constantly so a predictable income can help.

However it doesn’t have to be all or nothing. If you already conduct one-off transactions you can introduce subscriptions alongside to add a new dimension to your business. Introducing subscriptions can bring in more money to help your business grow, attract new customers and even spark new interest from current ones.

Image: teapigs sell ‘subscribe and save’ on the header side-by-side with the one-off transaction items

2.Better predict stock

If you know how many people have signed-up and for how long, you can better predict the levels of inventory. This predictability means you have time to confidently order your stock and make sure the quantity is sufficient. You may even get a better deal by placing the orders with your suppliers in advance. Optimising your inventory can reduce wastage and overall end up lowering costs. This is a particular advantage to those companies who offer perishables like food and drink subscriptions.  

Non curated boxes or ‘lucky dip’ subscriptions can also provide benefits in terms of stock management. They can be used to sell off products and are great for brand engagement. Customers will wait in anticipation for whatever will be included in the next order- this works very well for Wine merchant.

Image: Loot Crate are a company who curate ‘mystery boxes’ filled with pop culture items each month

3.Lower shipping costs

The fulfilment process for transaction eCommerce often needs to be quick, so you can reduce shipping costs with a subscription model.  Shoppers will expect a one-off purchase to arrive within a few days so they need to be enticed with fast shipping options. However with subscriptions the delivery is timed to arrive weekly, monthly or quarterly; whenever you want. So long as their package arrive on time, customers won’t mind how it’s shipped. Therefore you can pick a fairly inexpensive shipping method that can save you time and resources.

4.Generate loyalty and engage customers

People sign-up because they already enjoy the product or service and want to receive it regularly. Having this model is a great opportunity to delight and surprise your customers.

So long long as you have tactics in place to retain their custom, like offering  sporadic discounts and little perks for staying signed-up. Having these regular purchase can help you better predict elements of your business and build a loyal customer data base.

Also, having a subscription service provides the opportunity for more regular communication from business to consumer. When you send emails about their subscriptions you create new selling opportunities and engage more with your customers.  

5.No limitations

Finally, one of the great things about subscriptions is they can take dozens of forms. They can curated bundles, repeat individual items, they can be a necessity or a special treat. For example, some customers use them to replenish something they use regularly. Amazon offer a one-click repeat subscription option for items like razors.

Image: Amazon

Whereas others may sign-up for a curated mystery treat that arrives monthly. One of the most well-known subscription services BirchBox send their customers 5 random beauty products from the month. Ultimately, there are no limitations to what can be a subscribable product. No matter what you sell or the needs of your customers, you can find something that works for your business.

What does blubolt offer?

Looking at the obvious trend in the market, we’ve created our own model to help our clients create a recurring source of revenue. Our main focus when designing subscriptions was all about convenience and flexibility for the customer.

Flexibility: Inbuilt functionality means the act of signing-up and purchasing a subscription is highly customisable. Customers can choose the bundle, price range and frequency of deliveries, right down to the day. The process is personal, brand reflective and tailor made to suit the the buyer’s preferences. Most importantly, all of these aspects can be altered at any point, so they’re never stuck with a subscriptions they don’t want

Convenience: Some customers sign-up for a subscription to regularly receive their favourite products. With this in mind, one feature on our model allows our clients to convert popular items into subscribable products that can become repeat orders. It’s time saving and can help you retain loyal customers. You can add extra incentives for signing-up, like discounts or special shipping options and for added convenience, customers can purchase their subscription alongside a regular transaction in checkout.

If you’re interested in re-platforming or hearing more about bluCommerce subscriptions you can find all of our contact details here.

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