What E-Commerce Brands Can Teach Subscription Box Companies
:: By Maria Haggerty, Dotcom Distribution ::
Business is booming in the subscription retail sector. Emerging brands and existing retailers are flocking to the space, but many are discovering that it’s easier to sell subscriptions than it is to keep them.
Although subscriber churn is a fact of life in subscription commerce, the most successful brands retain subscribers by following the lead of other e-commerce brands and providing an exceptional customer experience month after month.
Customer Experience Is King
The subscription business model rapidly gained traction in the retail sector over the past several years. Research from Experian Hitwise shows that traffic to subscription box websites increased by more than 3,000 percent since 2013.
In many ways, the rise of subscription commerce parallels growth in the larger e-commerce sector. The same demand for convenient purchase options and high-quality customer experiences that enabled success in e-commerce has propelled subscription boxes from a niche product category to a more widespread retail offering.
To improve loyalty and recruit brand advocates, e-commerce brands prioritize an end-to-end customer experience. By focusing on fulfillment and logistics, e-commerce leaders ensure that the delivery and unboxing experience is as impressive as the purchase experience.
Subscription box brands will never eliminate churn. However, they can keep subscribers longer by embracing fulfillment and logistics as a primary resource for maintaining a high-quality customer experience.
Improving the Subscriber Experience with Fulfillment and Logistics
First-rate fulfillment and logistics amplify the excitement of receiving a monthly package. With the right strategy, subscription commerce brands can reduce churn and incentivize current subscribers to become brand advocates via social media and other channels.
1. Premium packaging is non-negotiable.
Subscription box brands have low overhead costs, making it easier to incorporate luxury packaging into their business models. Gift-like packaging no longer gives subscription commerce brands an edge – it’s a feature that subscribers expect and they will quickly abandon brands that fail to provide a world-class unboxing experience. Since subscribers often share their unboxing experiences via Facebook, YouTube and other social channels, the price of luxury packaging more than pays for itself by converting subscribers into brand advocates and generating excitement about next month’s package.
2. Constant and careful forecasting mitigates risk.
Forecasting is notoriously tricky for subscription commerce brands, especially those that allow subscribers to end their subscription with the click of a button. When subscribers can instantly terminate their relationships with the brand, it is extremely difficult to predict how much inventory, warehouse staff and other resources will be required to keep pace with demand. Constant forecasting reduces risk, but it’s critical to monitor subscription rates and scale to fluctuations in demand at a moment’s notice.
3. Fulfillment and logistics expertise helps.
When it comes to fulfillment and logistics, subscription commerce isn’t for the faint of heart. In fact, most brands find that the best way to maintain an exceptional, end-to-end customer experience is to partner with a fulfillment and logistics provider that understands the subscription commerce sector. Since even small mistakes can lead to increased churn and lost revenue, brands that lack fulfillment and logistics expertise are better off relying on a qualified third-party provider to make sure that packages arrive on time and as expected each month.
Subscription box brands are only as good as the most recent package they deliver to subscribers. To keep subscribers excited about receiving next month’s box, brands must deliver a consistently stellar customer experience – and first-class fulfillment and logistics strategies can help them do it.
About the Author
Maria Haggerty is the CEO and co-founder of Dotcom Distribution, where she has played an integral role in developing and defining all aspects of the operation, including sales and marketing, operations, finance and IT. Her strategic leadership helps the Board and senior management to establish long-range goals, strategies, plans, and policies. Prior to founding Dotcom, she began her career as an Auditor at Arthur Andersen and was the CFO of GoodTimes Home Video.