Fashion Digital Marketing

How to market and grow your e-commerce subscription business?

It has almost been 10 years since subscription boxes like Birchbox revolutionized the retail market. Today subscription boxes exist for a multitude of products like clothing, jewelry, dog treats, wine, cheese, and even artisanal products from all over the world. Almost everything can be delivered to your doorstep in a box on rent/subscription.

The subscription e-commerce market has grown more than 100% in the past 5 years. In 2011, the subscription market was worth $57 million and reached $2.6 billion by 2016 and there has been a 24% increase since 2017. This notable growth in the industry has attracted many established retailers to enter the space; for example, Play by Sephora,  Gillette on demand and even Amazon.

According to a report by McKinsey, consumers are now fully on board for receiving products and services on a regular basis, without having to place new orders every now and then. Millennials who are used to buying products with a click are the ones particularly attracted to these subscription boxes. In the USA, 31% of millennials are already subscribed to these subscription services and another 38% are planning to subscribe. When it comes to men, almost 28% of men are subscribed to these boxes as compared to 22% of women.

With the rise of the subscription phenomenon, there is a long list of brands offering different types of subscription boxes. But, with so many choices, could the industry be approaching a saturation point?

At least 13% of such companies have ceased operations over the last few years. This could have been a result of a faulty business model. But at the same time, there were some brands who started off as small startups but have emerged as multi-million dollar businesses. These include brands like Shoe Dazzle, Sephora, BirchBox, etc. 

Here are some ways to make your subscription model effective:

1) Have an adaptable business model

To have an adaptable business model, companies must offer customers convenience. With a subscription service, customers can avoid the frustration that comes with shopping. With a subscription model, they can easily buy products directly from their mobile phone. Another convenience is to provide your customers with the flexibility to cancel their subscription any time. Customers should not be bound to pay. Such leverage makes purchasing from a brand a habit and increases the client base.

Creating a long term relationship with customers is key especially with a subscription model.

A subscription model allows you to bring in recurring revenue and the acquisition cost is spread over the years. The longer the subscription lasts, the more profitable it becomes. Thus, it is important for the company to know how many months does a membership need to last to write off the original acquisition cost.

2) Less is more

The original idea behind creating a subscription service was to help the indecisive customers by curating products based on their preferences. By letting personalization become the center of the retailer-customer relationship, brands can encourage loyalty. The more choices the customer has, the harder it becomes for them to decide. The idea is to give customers a small and carefully curated set of options to choose from rather than having many options to confuse them.

This is why companies like Dollar Shave Club were so successful. The brand offers fewer, good quality, reasonably priced products. This will help customers to personalize products as per their needs and receive the package shortly at their doorstep.

3) Have a critical mass of subscribers

A good marketing plan can help you achieve a critical mass of potential customers. The quality of the box, the products, pricing, and the customer service that you provide to the customers is what’s going to make your business model successful.

Acquiring new customers can also prove to be costly, so brands have to calculate meticulously how long can they afford to carry on before they burn all their marketing budget. Also, customer acquisition can be harder for a saturated niche as compared to when the concept was new.

4) Stand out from the rest

With so many companies adopting a subscription model, you have to stand out from the crowd. It can be done by offering unique products or service, frequency of deliveries, customer service and even how you are sending the product.

Bloom & Wild is a UK based brand, that offers fresh flowers, packaged to fit the standard mailbox. This saves a customer a trip to the post office in order to collect their package and is convenient for them.

Brands can stand out but either offering niche products like fishing supplies, baking supplies, etc or just simplify people’s lives by allowing them to stock up on basic items like toothbrush, razors, etc.

5) Offer value and good quality-price ratio

Online shoppers are aware of the cost these days and as a result, they expect high-value products in exchange for the subscription fee. It is important to maintain a good ‘quality-price’ ratio or else people can unsubscribe. The price of a subscription box usually falls in the range of $15- $45. People expect more than their money’s worth. Your pricing strategy should be a rumination of the value it provides to your subscriber. Price is not just a representation of cost. If you provide a great value with your price, it is the best marketing tool and can help grow your business.

6) Anticipate inventory needs

Inventory management is easy in subscription models as compared to others but still, there are fixed deadlines to receive stock. There has to be some buffer time before the inventory comes in and the boxes are sent out. This system should be set in place to compensate for broken products or undelivered boxes. Most customers expect their boxes to reach them on a particular date, so companies have to make sure that the inventory is stocked up.

7) Get more engagement by becoming unpredictable

There is an element of experience, anticipation, and surprise that engages consumers when they subscribe to a box. Most subscription boxes are curated specially for the customer according to their preferences. There is no playbook as to how to design successful subscription service. But it is important to invest in content and packaging that will make the unboxing experience exciting every single time for the consumer. That surprise element is what makes it different for a customer from going online and buying something from a regular e-commerce website.

The fact that consumers do not know what’s inside their box is a huge driving force. The unpredictability is what makes it so engaging.

Once a subscriber likes what’s in the box, he/she will become a customer because of the excitement that comes with it. Once the retailer transacts that emotion in the customer, they will come back for more.

8) Providing satisfactory experience for the customer

When it comes to subscription boxes, one of the ways to retain customers is to provide them with a tangible profit like lower costs and satisfactory personalization. If at any point, the customer feels that the box is not providing a superior experience, they might cancel the subscription. But, if the customer feels like they are getting more than their money’s worth at the comfort of their house, they will probably recommend it to their peers.

A good experience is defined differently by every brand, but one thing that is constant is understanding the unique needs of the customer. It could be their taste, style, size or even psyche. Engaging with the customer in real time and gathering feedback to understand them is crucial to provide them with a good experience.

JoinSwitch is one of our clients, who are a jewelry subscription company that provides jewelry from luxury brands like Hermes, Chanel, Gucci, etc. They have a very interesting model where customers can style their look can keep the jewelry pieces depending on their membership plan. They are not just providing customers with valuable products but also the experience of owning luxury jewelry that can be exchanged at any time.

Ultimately, subscription boxes have gone from being a fad to being useful in providing a more satisfying experience to the consumers. But, this also means that people are expecting more from subscription companies. Value is still the prime motive but consumers want to be delighted. They want to discover amazing new products and immerse themselves in an invigorating experience whenever the box arrives.


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