E-Commerce Subscription Model Strategy

Where are you on your ecommerce subscription model strategy? The latest study suggests from MGI suggests that subscription models will surge over the next 4 years. This is a great idea for consumables like, razors; food; vitamins and supplements; diapers; pet food etc.

We’re all familiar with some of the most popular companies—Amazon Fresh, BirchBox, Dollar Shave Club and Yumvelope to name a couple—but new versions pop up every day. Why? Because there are many advantages of this model:

  1. Do the work for your Customers – A subscription model makes it easy for customers to receive your products at appropriate time intervals without doing any work. Your products just arrive at their doorsteps.
  2. Increase Customer Loyalty – By making it easy for your Customers it will increase loyalty as it is easier to keep receiving the products than cancelling the subscription and purchasing elsewhere. This increase Customer retention results in an increase the life-time-value of your customers and decreasing overall acquisition costs.
  3. Easier revenue forecasting – Monthly revenue becomes easier to forecast as the percentage of subscriptions increase, resulting in improved cash flow management.
  4. Easier fulfillment forecasting – Fulfillment demand becomes easier enabling optimization in the supply chain from inventory flow to optimizing DC fulfillment and shipping costs.

The time is now to get ahead of your competition by determining what your subscription model should be and provide your business with a competitive advantage.

Contact us to learn how SPICE can help your ecommerce strategy.

About the Author:

Ian Rogers is an accomplished business leader with 20+ years in Retail / Supply Chain Management, Portfolio, Program, and Project Management. Ian’s expertise comes from working in multiple countries (Canada, UK, US, China) and in multiple sectors including manufacturing and multi- channel retail (office products, mass merchandising, lifestyle brands). Over the years Ian has worked with companies as both a senior line leader and as a management consultant in Supply Chain and IT. This broad based experience provides him with the ability to take a holistic view, thereby understanding the potential impact changes in one area of the business will have on other areas. 

Back