Subscription commerce: A beginner’s guide with types, benefits, examples
Subscription commerce surged during the pandemic and shows no signs of slowing down. Learn why it's booming, and everything else you need to know about this business model.
Subscription commerce is transforming the e-commerce sector. Subscription-model selling has given brands the opportunity to score guaranteed sales on a monthly basis and drive customer retention.
While the model was once exclusive to gym memberships and streaming services such as Netflix, examples of subscription e-commerce now include beauty boxes, healthy meal kits, and much more.
The global subscription e-commerce market is expected to reach $904.2 billion by 2026, up from $72.9 billion in 2021.
The question is, how effective is subscription commerce at aiding consumer retention? Stick with us as we jump into the benefits of a subscription commerce model and look at seven brands that got it right.
Subscription e-commerce basics
A subscription commerce model is an e-commerce strategy that encourages consumers to sign up for continued service for an annual/monthly/weekly fee.
A subscription model generates regular income for a business, and can boost customer lifetime value. It also provides a company with valuable customer data, which can be used to improve customer engagement and increase loyalty.
For consumers, an e-commerce subscription offers convenience and perks like discounts and special offers. Subscriptions are usually priced at a portion of the upfront cost of a product or service, which also benefits the customer.
There are three main types of subscription commerce:
- Access (membership model)
- Curation (box model)
- Subscribe-and-save
With this in mind, let’s have a closer look at some of the best examples of subscription e-commerce to take inspiration from in 2024:
1. Razor-based subscription e-commerce: FFS Beauty
FFS Beauty (formerly Friction Free Shaving) is a great example of subscribe-and-save e-commerce. Since launching in 2015, the brand has become popular among women and eco-conscious shoppers.
After subscribing to the service, customers get their first box, packed with a new razor and replacement blades. After this, each box just comes with replacement blades for the long-lasting razor. The company aims to reduce plastic waste by simply replenishing the razors customers already have.
The brand really wins with its tailored customer-centric strategy. With the ability to cancel and restart their membership at any time, the customer is in charge. Better still, each box can be customized by the customer for their own shaving needs.
2. Sustainable essential for the win: Who Gives a Crap
This toilet paper brand knows how to ace the subscription e-commerce strategy. Offering to deliver toilet paper to your door, Who Gives a Crap has turned an awkward necessity into a great subscription idea.
Every house needs toilet paper, making it one of the least likely subscriptions to get canceled. This genius brand also makes each roll from 100% recycled consumer waste, giving the brand an eco-friendly angle too.
With the option of ordering 24 to 48 rolls of toilet paper on a one-time purchase or subscribing and saving on a long-term basis, this brand leverages the replenishment model.
With over 7,500 five-star reviews, it seems as if consumers love this sustainable brand too.
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3. E-commerce powerhouse: Amazon Subscribe & Save
E-commerce giant Amazon has its own subscribe-and-save subscription model. You may have noticed that when you go to buy certain products such as refillable beauty supplies or food and drink, Amazon offers a subscribe-and-save option that gives you the chance to save money on the current purchase and automatically receive a new replenishment every one to six months.
Subscribing customers save on average 15% on their desired products when choosing the subscribe and save option. Seeing a lower-price offer alone is enough to make most consumers click.
Better still, the company offers Prime members free shipping on every subscription. In its second-quarter earnings report last August, the company said Subscribe & Save had helped customers save more than $1 billion in the last 12 months.
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4. The subscription bundle: Apple One
Apple has plenty of subscription service examples to choose from. From its famous Apple TV streaming service to Apple News and Apple Fitness, the tech brand knows how to make money using a subscription e-commerce model.
However, with One, the company has chosen to combine six of its largest subscription services into one big access subscription.
Not only does Apple give customers who are subscribed to every service the chance to enjoy all of them for a lower price, but the One platform hosts all services, making it easy for customers to access all Apple services at home and on the go.
5. Customizable protein: Huel
The next subscription e-commerce example comes from Huel. This brand didn’t start off with a subscription service, but after the nutrition company saw great success with their all-in-one meal drinks, they introduced a subscription method so consumers wouldn’t have to order large quantities at once.
Huel has expanded beyond bottled drinks to nutrition bars, powders, and instant meal cups. Customers choose delivery frequency, with every four weeks the most popular option, and subscribers get a discount.
The service is completely customizable; customers choose their own combination of flavors for an order that fits their taste.
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6. Inspired Go
Last but not least, let’s talk about Inspired Go. This healthy-meal subscription service offers curated boxes. Delivering subscribers healthy meals for breakfast, lunch and dinner, Inspired Go targets busy working people who still want to eat well on the go.
One great feature about Inspired Go is its subscribe and save 5% feature. Packed full of customizable meals and snacks, the subscription service a great way to target busy consumers who want to eat healthy but don’t have the energy to cook.
Yet again, this model profits off of ease of use and classic consumer comforts. What a great selling point.
Setting your own example for subscription commerce
The key to success is to find a gap within the market. Think about how you can target your demographic. Can you offer them a service that none of your competitors can match? The best subscription models are those that are unique and keep giving customers a reason to return again and again.
For businesses aiming to improve customer retention in 2024, subscription commerce is an avenue they must consider, especially as e-commerce forecasts predict that more than 2.77 billion people will interact with the online high street by 2025.
