You've probably heard about Amazon's proposal to use flying drones to deliver your packages in the future. (How cool would that be?!) Nowadays, businesses are doing everything they can to get their products to their customers' doors faster and easier. Many are taking it one step further: They're putting the purchasing and delivery process on auto-pilot.
Recurring orders or subscriptions have been around forever, but have recently gained popularity with lots of unexpected products like cosmetics, snacks, pet gear and more. All types of businesses are now embracing e-commerce subscription models, and with good reason. Subscription models help companies realize regularly recurring revenue with the ability to up sell anytime.
A great example is Barkbox that delivers goodies to dogs and their owners once a month. Launched in early 2012 by Matt Meeker with Henrik Werdelin and Carly Strife, Barkbox reportedly grew to over 20,000 customers in less than a year. And these aren't "one and done" customers who get their first box and bail. In fact, Barkbox claims it has a whopping retention rate in the 93 to 95 percent range.
They haven't built this success by luck; they've worked hard to engage and connect with their customers and are highly active on social media including Facebook and Twitter with 270,000 fans and 6,225 followers accordingly. Other successful examples of the e-commerce subscription model include Birchbox and Stitch Fix. Birchbox often sends samples of products along with their monthly subscriptions, which can lead to sales of full-size products.
A certain big box retailer seems to be taking notice. Target has recently dipped their toes in the water with Target Subscriptions. For now, the service is focused on new parents, with baby related products including diapers, wipes and other essentials. Target may be trying to go head-to-head with Amazon and their Amazon Mom program.
Do these models have what it takes to succeed over the long haul? It may be too early to tell, but results seem to be encouraging and can be applied to businesses of all types and sizes. Even my e-mail marketing company, VerticalResponse, offers a monthly subscription, which our customers love. The key to success seems to be in offering the flexibility customers desire with the value of saving time, energy and being able to surprise and delight them month after month. The customer loyalty benefits of that are priceless.
Have you considered the subscription model for your business? Share your successes and challenges in the comments.