4 Questions to Find Out if Your eCommerce Business is Ready for a Subscription Model.

Posted October 15, 2020

In eCommerce, Fulfillment, Subscription eCommerce

More and more consumers are opting for subscription services as opposed to the traditional ownership model. To accommodate these consumer preferences, eCommerce businesses seem to be moving in a similar direction, offering fixed monthly subscriptions as well as consumption models that combines subscription, one-time, and usage-based billing.

Flexibility, value, and convenience are the key drivers of this market trend. With an increasing number of consumers looking for both flexibility and convenience to pay for only what they use, they want to derive more value from the products they choose, with little to no upfront payment.
Subscription Trend Everywhere

Be it Adobe, Netflix or NetGear, all eCommerce businesses are now evolving into services companies, selling consumer subscriptions help them get more value from their products. Online brands can rejoice with the rise of subscription commerce, helping them create new recurring revenue streams while enjoying healthy, lasting relationships with consumers.

Here are 4 questions to consider if you want to add subscription commerce to your online business:

Is the subscription model right for your product?

Today, the online subscription model has expanded to embrace a range of vertical industries, including packaging, consumer electronics, and telecom & services industry. Several mobile telecom carriers attract consumers with the option to upgrade smartphones for a nominal monthly subscription, instead of requiring an upfront payment. Subscription model does offer consumers convenience, flexibility, and value.

Does it align with your overall strategy?

A subscription model is designed to build continuity programs for the delivery of specialty items. It may even be possible to offer complementary services through subscription, enhancing the functionality of the goods.

The “freemium” strategy is another deployment model used to facilitate transition to a subscription model, so consumers can try a basic version for free while accessing full features for a monthly fee. With the freemium model, users are able to “test drive” the services or product before committing to a subscription.

Do you have a subscription ready infrastructure?

A subscription model may involve time-based access or other sophisticated strategies, including metered or tiered usage. As an eCommerce business, you may want to make sure that you are able to help consumers modify subscriptions while on the go. There are a lot of back-end complexities along with infrastructure and management issues involved in the subscription model. Are you equipped to protect consumers against piracy? How well equipped are you to optimize renewals?

Brands must invest in a new business infrastructure where they can manage the complexities of the subscription model while keeping pace with evolving needs of consumers.

Are you future ready?

Consumer preferences are evolving, with increased preference for subscription model. The evolution in consumer choice is renewing interest in subscription strategy. Carefully considering your eCommerce business infrastructure is the best way to strategically think about your product, making it subscription ready for the future.

Bottom Line

You will probably need to answer a lot more questions to ready yourself for subscription eCommerce. The above 4 questions are the most basic questions you will need to answer. Enlist the help of an eCommerce order fulfillment provider and they will be better able to advice and assist you in your decision to start subscription eCommerce.

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