Ecommerce subscription selling in Magento

It may not seem like an obvious business plan, but subscription selling could be the best model for your eCommerce site. A new and evolving concept, it has been proven to increase sales and most importantly sustain revenue, giving businesses the unusual luxury of being able to plan ahead. Indeed, subscription selling if done right can allow eCommerce businesses to provide customers with a tailored product that guarantees them both luxury and satisfaction and in turn those customers will reward businesses with their loyalty and continued purchases.


So what is subscription selling? Essentially there are two different types. On the one hand there is the set-up whereby discounted good are offered to consumers if they subscribe to purchasing these goods over a specific period of time. The merchant in this instance offers their products at a lower cost on the grounds that the consumer signs up long term, to receive the goods. From the sellers point of view, this assurance of long term buying negates any possibility of a loss of profits. The seller can continue to maintain margins by bringing the customer on board long term. At the other end of the scale, subscription selling can also involve consumers signing up for luxury items at a premium cost. The idea here is that the merchant hand picks a selection of goods based on information that they have on the consumer’s tastes and spending behaviour. The consumer is inclined to sign up because of the personalised element to the goods on offer.


In an age where consumers are squeezed for time and where immediacy is key, being able to purchase all of ones goods in the same place and as infrequently as possible, is incredibly desirable. There is a convenience aspect to this process, that is key. Subscriptions, allow for the consumer to avoid making a reoccurring purchasing decision. They can also avoid having to set reminders to make these regular purchases. There is no hassle of having to visit physical stores, consumers simply have to wait for home delivery. Subscriptions save time and effort and there is a reliability element to this system that consumers find comforting and reassuring, which impacts positively upon how they view the business’s brand.


The advantage for businesses offering subscription services, is obvious. When consumers commit to buying products over a certain period of time, businesses can then allow for a higher margin model and they can offer deeper discounts than on single purchases. The luxury of signing consumers up to subscriptions and tying them down to contracts, means that companies can properly forecast profits for the coming year, something that is central to developing any business. The subscriptions market is incredible competitive and in order to survive, eCommerce businesses must understand the power of personalisation. If consumers are offered a personal selection of goods that they can order on a reoccurring basis, they are far more likely to sign up. To determine what kinds of personal packages to offer, businesses need to collate data from their records of previous buyers which provides insight into lifestyles and personality traits. Using this data, eCommerce sites can then start to put together genuinely desirable and personal bundles that will entice consumers to sign up to those all important subscription deals.


Any eCommerce site can offer subscriptions. To be successful in this area businesses must understand exactly why consumers are likely to buy more than one product at once on a reoccurring basis. If they can tap into this, they can begin to offer tailored packages delivered on a weekly or monthly basis. The likes of bespoke luxury food companies, such as ocado do this very well. Having an extensive list of customer data makes it easier to push personalised subscriptions. Not all products are suitable for the scheme, but those which customers purchase regularly are good starting points.