Why retailers are flocking to e-commerce subscription models

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As e-commerce continues to take over the retail industry, many brands are turning to subscription services to meet their customers’ demands. Studies predict that the subscription economy will reach a global market value of $257 billion. Increasing customer demand for flexible pricing and purchasing options are responsible for a large portion of this growth. As modern shoppers continue to trend towards omnichannel commerce, pricing models must branch out in order to meet consumers where they’re at. 

E-commerce subscription models generally fall into one of three categories: replenishment, curation, or access.  

  • Replenishment subscriptions allow customers to automate restocking commodities like razor blades or diapers, doing away with the inconvenience of manual re-ordering or worse making a last-minute dash to a local store.  
  • Curation subscriptions, commonly sold as subscription boxes, surprise customers with novel items like a meal kit or a bundle of samples.  
  • Access subscriptions, often branded as memberships, provide customers with benefits like exclusive items, lower prices, and free shipping at a recurring fee.  

Each type of subscription homes in on a key customer expectation to deliver an optimized shopping experience. Whether that be unprecedented convenience, a personalized experience, or perks, retailers who fail to deliver on those expectations are quickly being left behind. However, the good news is that subscription-based e-commerce can be a win-win situation.  

Once a subscription is factored into a customer’s routine and budget, retailers can gain higher customer lifetime value (LTV) and greater return on customer acquisition costs (CAC). Discover more of the benefits of an e-commerce subscription model, read the full blog. 

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