The Latest Trends in E-Commerce Subscriptions

Physical-Goods-BlogSales of physical products in e-commerce are experiencing sustained growth. According to industry-expert, Mary Meeker, the market has experienced double-digit growth each year since 2008.  

Because of the intensely competitive nature of e-commerce, businesses seek any advantage that might give them an edge over their competition. For example, some businesses are able to leverage a unique brand persona and sell directly to consumers, bypassing middlemen and their added fees. They use technology to enable this strategy.

Recurly was founded to reduce the complexity of subscription billing, and our platform continues to evolve to meet the ever-changing needs of the marketplace. Direct-to-consumer is an example of a new e-commerce model that Recurly supports. By offering subscription products alongside one-time sales, we enable e-commerce sellers to create long-term relationships with their customers and increase customer lifetime value. 

Below are four types of businesses that Recurly supports in the e-commerce and physical goods space:

Replenishment

    • Model: Automatic delivery on a set cadence of items that typically run low—such as office supplies, coffee, household goods, vitamins, razors
    • Recurly customers: FitForMe, Healthy Back Institute, Cora, JUUL
    • Trends: Breaking out of the Amazon Subscribe ‘n Save model to go direct-to-consumer. These products are incredibly inventive and often provide high-value services to subscribers.

Internet of Things

    • Model: Sell a one-time ‘smart’ device along with a digital subscription to access the device’s data
    • Recurly customers: Canary, Enplug
    • Trends: This market is heating up as the number of business and consumer categories that employ smart devices grows. Successful B2C businesses are trying to differentiate themselves based on the value they offer consumers, and some are moving into the B2B market.

Subscription Box

    • Model: A curated box of products delivered to your door, catered to your interests
    • Recurly Customers: FabFitFun, Lootcrate, Barkbox
    • Trends: As the number of boxes increases, subscription box companies are expanding their product offerings to increase the lifetime value of their customers.

Access

    • Model: pay a fee for access to special products or discounts on goods
    • Recurly Customers: Openfit, Rocksbox 
    • Trends: These merchants try to create exclusivity and drive down operating costs by collecting subscription fees, as well as fees for purchasing one-time items.

For all of the above types of subscription business, the relationship with the subscriber is paramount. They must consistently feel that your products or service provide value, regardless of whether you’re selling subscriptions or one-time products. How are you engaging with your customers and prospects? Are they coming back for more? Do they want to work with you continually, even if you’re not selling them a subscription? How well you address these challenges and meet your subscribers’ needs is ultimately the key to your success. 

 

Explore Recurly Research Data: Benchmarks for Subscription E-Commerce

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