Add Subscription Products to Scale Up Traditional eCommerce Store

Are you ready to scale up your business? It may be time to add subscription products to your eCommerce business model. As an eCommerce blogger, strategist and online shopping addict, I am surprised that more successful online stores aren’t already offering subscriptions to their customers.

Subscriptions have blown up – an estimated 800% since 2014. If that doesn’t impress you, according to Hitwise, there are 5.7 million subscription box shoppers in the US alone. You only have to look at the estimated monthly site visitors that subscription giants get to understand just how huge it can be.

order of subscription popularity

The point is, one of the fastest growing segments within eCommerce by including subscriptions into your already successful business might just be the scale push you need.

Not only would adding subscription products to the list help you to capitalize on more sales, but it is an awesome way to reward and incentivize your existing customers and grow your loyal shopper base. If you need proof that it works, you don’t have to look very far. Omnichannel superstar Sephora added an exclusive subscription option to their product list in 2015. Sephora Play allows customers to sign up for a monthly box of six sample products.

Their secret ingredient, however, is their combination of two top 2018 eCommerce trends: personalization and subscriptions.

example of omnichannel store using subscriptions

eCommerce subscription options

Although Sephora’s business objective with their subscriptions is mostly to drive more customers into their retail stores, this concept would also help drive more customers to eCommerce stores. Let’s elaborate.

The Theory of Using Subscription Products to Scale Up

Subscription products, whether it’s weekly, monthly or seasonally, give online stores an amazing way to engage with shoppers on a more personal level than generic email marketing or social ads can. This, therefore, makes them a leading tool in being able to scale your online business and build your loyal customer base, both of which will ultimately enable you to increase sales.

Why? One of the biggest advantages of an already converting online store – that is using a traditional model – has over a store exclusively using a subscription sales model is that by marketing new subscription services to repeat customers, you don’t need to try to convince them to trust you. As a previous shopper, they already trust your products and your store, and therefore it’s only the benefits of the subscriber that you need to push in your messaging, and it can be as easy as adding a subscription product or service as an add-on or upsell.

So how do you cash in on the growing trend and seamlessly integrate subscription products into your existing model? Here are the top 6 tips on how you can add subscription products to traditional eCommerce business as a way of scaling up.

1: Choosing Your Subscription Product

There is no end to the possibilities of products to build subscriptions around: theme-based, seasonal, new releases. The trick to choosing a subscription offering to your product list is ensuring that it will consistently deliver value and make your shoppers feel good when they open it. The best way to do that is to align your subscriptions to your shoppers’ wants and needs to ensure longevity.

For example, say you are a successful kids’ fashion and apparel merchant; you could offer your customers a monthly mystery box, or a quarterly surprise box with your newest seasonal offerings. Or if you sell socks, you could offer a surprise collection pair that is only available exclusively to subscribers and not sold in your store. Or, if you are selling hair care products, you could add a monthly hair accessory subscription to your list of products and treat your shoppers to something pretty each month.

hair accessory subscription box

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Like with most product selection, put your mind into that of your shopper, do the research and surveys and test, test, test!

2: Assess Customer Acquisition Costs

One of the biggest advantages of adding a subscription service to an already-popular store as a way of scaling up, is that you are already attracting and converting customers. Which means your subscription customer acquisition costs – as you test subscription – can be as low as sending out an email blast to your regular customers. Email, after all, has big conversion rates and high ROIs.

average conversion rates for ecommerce

[Image Source]

 

However, you should also be using subscriptions to attract more customers, through your AdWords and social PPC campaigns. ‘Subscriptions’ is a popular Google search and running Dynamic AdWords campaigns on new subscription services is a must. These new campaign costs, of course, will fall within customer acquisition costs and need to be considered when assessing your product prices and costs.

3: Set Subscription Pricing

When adding subscription products to your business, price is a huge factor in your success. You want to start off with something affordable, to catch your buyers’ attention. Or offer your VIP clients a discount on new subscriptions to help gather momentum and reward loyal customers. Start off with a few price tiers on different product subscriptions and test from there.

Let’s use the hair accessory example again. Say you launching this new subscription service; you could start off with bigger quarterly subscriptions based on season and then as an incentive give a discount to those buyers who pay upfront. Alternatively, you could make smaller, cheaper monthly pricing and send something special each month. Run two campaigns offering both, or an email offering a small group of your VIP shoppers both options to test your shoppers on pricing before you launch the subscriptions to everyone.

With adding subscription services, it’s important that you keep your existing customers happy, but also be prepared to shift and change as the market moves, and above all: think value over price. Subscription boxes need to give value, and as long as your customers feel like they are getting their money’s worth or more, you’re winning.

4: Store Integration

Once you have your entry subscription products, you will need to integrate them into your online store. Most hosted eCommerce platforms, such as Shopify, will enable you to easily add subscription products to your online store with the help of apps and plugins like popular Recharge or Chargebee for Shopify or GPLChimp’s WooCommerce Subscriptions Extension from as little as $15 per year.

Pro Tip:

Don’t want to add monthly boxes? Upsell monthly subscriptions on almost any product or offer three-month gift plans.

5: Admin Management

When using subscriptions to scale up your online store, you will need to account for the more complex additional billing admin that will come into play. With subscriptions, you need to account for billing customers at checkout, manage prorated accounts that have a variety of billing dates, types and deliveries. It is very important to ensure you have the right billing system in place that can handle both your traditional single-product sales and subscription products, to ensure you can continue to scale. Therefore, if you haven’t invested in a good-quality app or plugin, now is the time. Being organized with fulfillment is obviously something that can make or break your business success, especially with subscriptions where people have often paid ahead of time.

6: Think Marathon, Not Sprint

Last but not least, as you did when you grew your business at the beginning, to scale your eCommerce business up you need to think long-term. You know from experience that steady growth doesn’t happen overnight, and adding subscription services is no different. You want to start slow, and add product types and packages as you grow, scaling with the demand. This will ensure the infrastructure is in place and working as you increase product lines.

The Bottom Line?  

Subscription add-ons will help you scale your business by acquiring new customers, increasing the value of existing customers, and generating more repeat business and loyalty.

I hope these 6 tips on how to add subscription products to scale up traditional eCommerce Store get your creative business juices flowing. If you have questions or ideas, post them in the comments below.

Nicole Blanckenberg

Nicole is a content writer at StoreYa with over sixteen years experience and flair for storytelling. She runs on a healthy dose of caffeine and enthusiasm. When she's not researching the next content trend or creating informative small business content, she's an avid beachgoer, coffee shop junkie and hangs out on LinkedIn.

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