Why Subscription Commerce Is Taking Center Stage

By Aarthi Rayapura August 12, 2016

By Michael Lazar

With so many different variants in ecommerce, it can certainly be difficult to keep track of them all. These span the gambit from conventional ecommerce to social commerce, omni-channel and also subscription commerce, to name a few. But the last one on this list is taking center stage, and there are ample good reasons why.

The 411 On Ecommerce Subscriptions

There are basically two popular formats of subscription commerce: Automatic reordering of everyday staples and common use items, such as that which is found with Amazon Subscribe & Save; and ecommerce subscription boxes, such as those that are offered by popular services like Bark Box.

In spite of its recently spat of popularity, many experts have tagged subscription commerce simply as “subcom.” But it does vary between models.

      • Amazon’s service lets Prime users subscribe to things like daily vitamin and health supplements, laundry detergent and facial tissue, with convenient auto-ordering and signature subscription discounts that encourage buyers to convert to the subscription model.
      • Services like Bark Box, and plenty of other box subscription services, offer users differing monthly packages that are delivered to their door. These usually span the gambit of hand-selected goods ranging from snacks and meals to dog toys, and custom selected clothing and cosmetics (to name a few), and all for a flat monthly fee.

Pros & Cons Of Ecommerce Subscriptions

Like any seemingly flourishing industry, subcom is not without its innate drawbacks, either. Shedding light on the pros and cons of this industry is a detailed panel investigation that was conducted by Econsultancy that featured leading ecommerce and subcom experts.

  • Pros include: Healthier profit margins with a more predictable inventory that results in reduced spending and increased retention.
  • Cons include: Difficult product hooks with the potential for a large scale issues that can undermine retention, in addition to difficulty in attracting first time customers, coupled with the inability to oversee gross product quality on a massive scale.

Still, even with this seemingly even of a battlefield, many providers are flourishing in the subscription commerce marketplace. Experts, however, agree that for every success story there are likely many more failures that we never heard about.

Since subscription commerce startups typically begin in a garage as a mom and pop operation, similar to how Jeff Bezos founded Amazon, there’s no telling as to just how many of them have flat-lined in recent years. We get excited about every success story we hear, as we should, but there are not too many stories circulating about the downsides.

Read the full article at: www.huffingtonpost.in

And download Zuora’s 9 Keys to Success in the Subscription Economy!