If subscription ecommerce was a stock, every analyst would be pushing you to buy it. If subscription ecommerce was a house, its value would have tripled with no sign of slowing down. If subscription ecommerce was a band, it would have the top downloaded single on every music platform in the world.
This is the power of what many subscription companies are already realising: it’s one of the fastest growing markets in the entire world. According to McKinsey, the subscription economy has grown 100% year over year for the last five years.
Not only is the growth impressive, but now the big players are taking notice: Unilever, P&G, Sephora and Walmart have all launched subscription boxes because of the success of so many early adopters.
I wanted to share five subscription companies doing it right. While business model, vertical and target demographic vary among all companies, here are a few stellar examples we’ve been impressed by at ReCharge:
Business type: Subscribe and save
The UK’s top-rated subscription box, and the first razor delivery service designed exclusively for women, has been a smash hit since launching in 2015.
What makes Friction Free Shaving such a unique company is their onboarding flow. Upon sign-up, a subscribed customer receives a new razor and replacement blades. Every shipment following removes the initial razor but includes fresh blades at an interval chosen by the subscriber.
Friction Free Shaving knows subscriptions are all about a customised, tailored experience, which is why they offer the ability to pause and restart or cancel at any time. Additionally, their cross-selling mechanics work wonders for increasing average order value – offering shave creams, balms and scrubs to enhance the personal shaving experience. Clearly it’s working, as the brand has scaled from strength to strength in the past four years!
Businesses that work exceptionally well in the subscribe and save business type are those that sell consumables. Products that customers need refilled or restocked every so often are ideal because there’s no confusion of when to re-order. If you need 12 razors every 4 weeks, or a new bottle of shampoo every 3 weeks, or more coffee every 9 weeks, the subscribe and save model works extremely well.
Business type: Subscribe and save
Huel took the subscribe and save model and hit a home run. They began by selling their “perfectly balanced and nutritionally complete meal” one bottle at a time, and soon found out that people loved the product. Instead of forcing their customers to buy one bottle or large quantities at a time to stock up, they decided to focus on subscriptions.
Understanding that the subscribe and save model empowers merchants to sell their products in a convenient quantity at whatever interval they choose, Huel upped the ante and gave complete power to the subscriber: they began offering 12 bottle multiples shipped anywhere from weekly to every 8 weeks. This allowed Huel to focusing on delivering a quality product without concern of their customers forgetting to order when they are low.
Business type: Digitally Native Vertical Brand (DNVB) – Subscription first
DNVBs are brands that are geared specifically towards ecommerce. In an era where people want their preferred products delivered to them on their schedule, it only makes sense to design a product around being sold online. While DNVBs can be available in stores, the business model is “subscription first” and therefore gear marketing materials, advertisement campaigns, and other sales efforts towards their online channels.
Native Co is committed to providing quality personal care products that use safe ingredients. Being one of the biggest personal care companies in the industry today, they understand the need to tailor the entire customer experience towards giving their subscribers exactly what they want.
By building a desktop and mobile friendly website, a clean Customer Portal for managing subscriptions, and integrating loyalty and rewards solutions, Native provides everything a subscriber needs to be onboarded and stay satisfied.
#4 Box of Style
Business type: Subscription box
The subscription box is what started it all. In the new era of ecommerce, people demanded a customised, personal box based on their preferences. Enter curated subscription boxes. Onboarding surveys, creative registration flows, and follow up feedback help gear each box exactly towards the subscriber.
Rachel Zoe’s Box of Style, a quarterly curated luxury fashion box, accomplishes this goal by offering an onboarding survey where subscribers pick their style preferences. Rachel Zoe herself then curates the box and includes a limited number of quality items to be delivered to subscribers every quarter. To boost engagement, she provides style tips on how to wear and use each item in the box.
The best companies that use the subscription box model are ones that curate each individual box. Whether you ship monthly, quarterly, or at a different interval, the key here is providing a unique experience each time a box is opened. The goal is to surprise customers with items and experiences they crave without those customers explicitly asking for them.
Business type: Membership model
Memberships may just be the next big thing for ecommerce merchants in 2020. When Amazon Prime started selling memberships, people were instantly hooked. In fact, as of January 2019, Amazon Prime boasted over 100 million subscribers. While most people aren’t shocked that lots of people shop on Amazon, the kicker is that these people aren’t subscribed to a product, they’re subscribed to a service.
Freshly Picked, sellers of matching ‘mom and daughter’ moccasins, clothes, bags and more, have built an incredible membership model. Their subscription-based membership gives subscribers 20% off all products, free shipping, a $10 monthly store credit, and first access to new items (by hiding certain products from those not subscribed).
Subscribers control their access to their membership through their Customer Portal and can apply stored monthly credit to any purchase at any time using a loyalty solution also built into the Customer Portal.
Ideal customers for the membership model are merchants in the fashion, apparel, or jewellery verticals, or those that sell digital subscriptions – think a magazine or news website where access to specific content is gated. The future of subscriptions lies largely in this business type, as stores don’t need to be selling products, just the membership.
Subscription ecommerce on Shopify
If you’re considering starting a subscription program or you already have a thriving brand and want to take it to the next level, ReCharge is the leading platform to launch and scale your subscription business. As the force behind some of the largest subscription stores in the world, including Dr. Axe and Death Wish Coffee, we help merchants build creative and highly impactful subscription-focused companies.
To find out more about how we can help Shopify merchants supercharge their subscription ecommerce business, check out this Q&A session that our Partnerships Manager, Rob Barr, did with Swanky recently. You can also find out more on our website.
Partner with ReCharge and Swanky today and learn how to take your subscription business to new heights!