Top 7 Reasons For Your E-Commerce Store To Offer Subscriptions!
We may not be aware of it, but subscription services are part of our everyday lives. Examples include newspapers that are sent to us by a paperboy, services from our cell phone providers, and the shows and movies we can watch on Netflix and other streaming services - all of which require ongoing payments and use the subscription model.
Evidently, the subscription commerce market is increasing. Studies show that 15% of online shoppers have enrolled in one or more subscription services.
The subscription business model relies on a customer making a recurring payment in exchange for goods or services. This type of system is built on the following principles:
What advantages does an eCommerce store receive from offering subscriptions and memberships? Why do the major players in the eCommerce industry provide these services to their customers?
This write-up has compiled the seven leading motives why you should allow your Magento 2 shop to provide subscriptions to customers. Before that, let us determine which eCommerce sites a subscription system is suitable for.
Why should E-commerce businesses offer subscriptions?
It has been observed that subscription models are advantageous no matter how large or small a business is, or where it is based. Subscriptions are widely employed by E-Commerce companies dealing with a variety of products.
It is not just the sectors mentioned earlier which can benefit from having a subscription-based model with their customers; many E-commerce companies have opted for this approach for the following seven reasons.
Reasons to Adopt Subscription model for your E-Commerce Store?
1.Higher Returns with Subscription Model
The subscription model assumes a Favorable return on marketing spending due to its premise, as it enhances the likelihood that a newly acquired consumer will repeat a purchase.
Almost every online shop makes significant efforts and expenditures to attract new clients. Subscriptions increase the likelihood that these investments will be beneficial.?
2.Increase customer lifetime values with Subscriptions
Subscription business models are rapidly becoming a popular approach for e-commerce companies to boost client lifetime value. Rather than depending on the conventional strategy of winning consumers' purchases one transaction at a time, subscription models create ongoing connections with buyers to drive more sales and expand revenue streams.
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Subscriptions boost consumer LTV while decreasing customer retention costs since they presume repeat purchases until the client cancels their subscription.
3. Improved inventory management
Inventory management success is based on your capacity to predict how many things you will need in the coming month or year. Subscriptions help you understand your stock and the resources you'll need. This enables you to create more accurate financial forecasts, manage inventories, and develop a more reliable firm growth strategy. In addition, it will help reduce unexpected expenses by reducing the risks of stock surplus and deficit.
4. Payment automation
E-commerce has enabled customers to pay for subscription products using a credit or debit card. However, the payment process usually takes a while since it needs to go through the necessary verifications. With subscriptions, businesses can receive payments on the same day, making it easier to plan out their finances and reducing the chance of going through financial difficulty.?
Payment automation has been a significant benefit to both businesses and customers. Online stores allow shoppers to get the products they need without having to physically go to the store, and subscriptions take it a step further by allowing customers to save their card details and automatically transfer the payment each month or day. This makes the process more convenient and increases customer satisfaction.
5. Customer Love
It's no secret that the most effective way to boost customer loyalty is through subscriptions. With a prepaid subscription, customers will likely remain with you until they cancel it. Moreover, the chances of selling a product to an existing customer are much higher than a new one. For example, studies suggest that the probability of selling a product to a new customer is between 5 and 20%, while to an existing customer, it's 70%.?
To illustrate, if you are a customer looking for weights, you will purchase them from the store that delivers sports nutrition to you each week. By comparison, choosing an unfamiliar store requires creating an account, understanding the terms of service, and raising concerns about product quality and website security. Customers are usually willing to pay more for better service and premium products.
Subscriptions frequently come with discounted pricing, Which motivates customers to buy more. Some subscription plans include a product package, where popular items may have less popular add-ons. Subscriptions can therefore have a positive impact on upselling and overall sales.
7- Shipping that is inexpensive
Shipping is an essential component of providing excellent customer service. Customers anticipate one-time purchases to come within a few days; therefore, brands work hard to arrange as fast shipping as possible.
It is not, however, applicable to repeat purchases. Subscriptions are planned for a specified day of the month or week, so customers anticipate them to arrive on that day. It provides businesses with additional leeway. They can select somewhat slow and low-cost shipping ways. This saves businesses money on shipping while keeping customers satisfied with subscription fulfilment.
Example-If you provide an individual membership subscription to your visitors with appealing features such as same-day delivery and free delivery on a particular fixed amount. In this case, you will get more orders in a shorter period and will instantly save money on shipping management.