Sample and Subscriptions
Sample and Subscriptions
Subscriptions to eCommerce sites are here to stay. They are no longer a nice-to-have business strategy but rather a requirement for long-term growth. According to UnivDatos research, the global eCommerce subscription industry is predicted to reach £2.17 trillion ($2.64 trillion) by 2028.
eCommerce subscription is indeed a powerful model that offers numerous benefits for both consumers and merchants. It provides consumers with flexibility while giving merchants the sustainability they need for their businesses. Additionally, it improves the whole customer experience, and when implemented well, operational efficiency can be unlocked.
An eCommerce subscription is a business model where customers pay for regular deliveries of products or services. This service usually comes regularly in the form of a subscription box. Many eCommerce companies that deliver products offer small discounts on retail prices, which allows customers to save money while providing companies with long-term revenue streams.
In 2011, Birchbox became a cosmetics monthly sample box service and quickly became popular. It grew to over 45,000 members in less than a year and was once valued at half a billion dollars. Birchbox was the first successful example of a subscription box in eCommerce industry.
Today, Amazon, the leading online shopping platform, is adopting a subscription-based approach to provide customers with a “Subscribe and Save” option. This feature allows customers to receive regular deliveries of household essentials, personal care items, and health-related products directly to their homes every month. Customers who subscribe to five or more products monthly are eligible for a 15% discount on those items.
If you’re considering launching a subscription product for your thriving eCommerce business, it’s essential to understand the different types of subscription models you could offer. Here are three main types:
A replenishment subscription business model makes it simple for clients to purchase consumable products they use regularly. These products are then delivered to them on autopilot at predetermined times, usually at a discounted rate.
Examples include supplements, wellness products and more. Customers appreciate the convenience of automatic deliveries and not having to remember to place orders.
Curation subscription models are subscription boxes that typically include a collection of products like apparel or can be samples of organic products. This form of subscription provides a selection of products tailored to each customer’s specific needs and preferences.
Customers enjoy the surprise and discovery aspect of this model. However, it is associated with both high quality and high cost because of the level of personalisation it offers.
An access subscriptions model offers subscribers exclusive access to products or services. These could be access to premium products that are difficult to find or bulk items with a significant discount.
This model can help build customer loyalty and increase lifetime value, as subscribers feel they are getting additional discounts from the exclusive access. Remember, it’s not just about making a sale but about nurturing an ongoing relationship with your customers.
The adoption of eCommerce subscriptions in the UK is being driven by several key factors, making it a popular choice among consumers.
The subscription business model offers numerous advantages for eCommerce businesses. Here are some key benefits:
Subscriptions provide a steady stream of income, making it easier for businesses to forecast and plan their finances. This predictability can be particularly valuable for budgeting and investment decisions.
Subscribers are more likely to remain loyal to a brand or service, reducing churn compared to one-time purchases. Continuous engagement and value delivery help maintain customer relationships over the long term.
Subscription models often involve ongoing interactions with customers, such as sending updates, new content, or product improvements. This engagement can strengthen the relationship between the business and its customers.
Once customers are subscribed, businesses can upsell or cross-sell additional products, services, or features to increase revenue per customer.
Subscription models can help you build long-term relationships, which means you don’t have to rely as much on acquiring new customers, and it generates more opportunities for referrals, which can be more cost-effective in the long run.
While subscriptions make things easier for customers, recurring shipments create their own set of challenges for ecommerce businesses. Here are some of the most challenging aspects of subscription box fulfillment.
Selecting the right fulfillment company is crucial, as they can transform what might otherwise be a complex and time-consuming process into a smooth and effortless experience for both you and your valued customers.
Here are the most important factors to consider when selecting a fulfillment provider for subscription box businesses.
The customer experience extends beyond the checkout process. The moment your customers receive their subscription box is their first tangible interaction with your products. Before they even dive into the contents, they encounter the packaging itself, whether it’s a plain brown box, one with a shipping carrier’s logo, or a completely customised design. This initial impression plays a pivotal role in shaping whether customers eagerly anticipate unboxing their subscription box each time they receive a new shipment.
According to a study conducted by Dotcom Distribution, 34% of individuals stated that the use of branded packaging significantly influences their perception of the brand or retailer responsible for shipping the item. Moreover, custom packaging can wield substantial influence over word-of-mouth marketing for your brand, with the same study revealing that 40% of online shoppers are more inclined to recommend products to friends if they come in branded packaging.
Therefore, it’s imperative to collaborate with a fulfillment provider who not only accommodates custom packaging but also respects specific packing instructions, such as incorporating tissue paper or including a printed insert inside the box. This ensures that your subscription box not only contains remarkable products but also delivers an unforgettable unboxing experience that leaves a lasting impression on your customers.
Subscription box businesses often experience fluctuations in inventory and order volume throughout the month. For instance, if you send out monthly curated subscription boxes, your warehousing needs can vary significantly throughout the month. At the beginning of the month, you may require minimal warehouse space, but as you approach the shipment date, your space requirements may increase substantially.
Working with a 3PL allows you to easily adjust the amount of warehouse space you use based on your changing needs. This flexibility allows you to scale up or down in terms of storage space as needed, ensuring that you only pay for the space you use. Not only does this enhance your operational efficiency, but it also helps reduce storage costs, as you’re not locked into a fixed space requirement throughout the year.
Automated fulfillment is more than just operational efficiency; it’s a strategic advantage for subscription businesses. Your fulfillment provider should leverage cutting-edge technology to streamline the entire order fulfillment process, from order intake to shipping, ensuring that every step is executed with precision and speed.
Moreover, technology-driven fulfillment providers can integrate into multiple eCommerce and marketplace platforms to check your order history, inventory levels, and customer preferences and gain valuable insights. This data-driven approach will help you make informed decisions, optimise inventory management, and enhance the overall customer experience.
Effective inventory management is important for the smooth operation of your business. While you do have the option of using third-party inventory management tools, we highly recommend considering a 3PL (third-party logistics) provider that offers integrated inventory management technology.
By selecting a 3PL with built-in inventory management capabilities, you consolidate your order fulfillment reporting and inventory forecasting data into a single, unified system. This integration is a powerful way to streamline your supply chain and enhance your overall efficiency.
Ultimately, the advantages of outsourcing fulfillment for your subscription box business may lose their significance if the associated costs erode your profit margins. It’s crucial to recognise that various fulfillment companies employ distinct pricing models.
Furthermore, it’s important to verify that the 3PL you select has the flexibility to handle unique projects and requirements. At I-Fulfilment, we understand that businesses may have specific packaging or shipping needs. That’s why our team is prepared to provide you with a tailored quote that aligns precisely with the unique requirements of your business.
At I-Fulfillment, we thrive on turning fulfillment challenges into solutions. Whether you need subscription services, high-value fulfillment, or oversized shipping, we’re ready to support your growth. Our secret to success lies in our ability to craft tailor-made solutions, driven by our state-of-the-art BladePRO technology, that cater specifically to your unique needs.
Choosing I-Fulfilment for your eCommerce subscription business ensures that your brand maintains customer loyalty by delivering the right products, in perfect condition and on time. Our comprehensive services cover high-volume support, customised assembly, cost-effective shipping, real-time inventory management, and more.
Make the smart choice for your eCommerce success and partner with a reliable expert in fulfillment. Contact I-Fulfilment today to get started.