Products traditionally subscribed to are newspapers and magazines. However, with the development of online commerce, more and more unexpected things can be ordered weeks and months ahead: from coffee beans to sets of underwear. The Village editors got acquainted with several delivery services in St. Petersburg.

Trusbox

Trusbox was created by two friends who decided to save the time of modern girls. As planned, once a month the client receives a box with four pairs of shorts and additional accessories, such as a sleep mask or socks. About which models will be included in the set, the addressee will know only at the time of receiving the parcel. In two weeks of preparation, the girls gained 500 clients, and every day more and more people subscribe to the service. Trusbox appeared in Moscow, but works throughout Russia. The price of the box, including delivery, is 939 rubles. You can also order men's underwear - a set will cost 1,090 rubles.

Elena Lyubarskaya
and Anna Gorodetskaya

Trusbox founders

We believe that we can expect the growth of such niche social services in them our salvation. Therefore, if in life you do something other than shopping, it is very difficult to choose from thousands of items in the store. We think that subscriptions will soon be installed automatically and the systems will regulate the goods and their volumes according to the parameters that they will receive based on your social graphs. The most common complaint is about the size problem - this is a sore point of all lingerie brands. It is always small for someone, great for someone, simply because someone likes to wear tight underwear, and someone is freer. The same size for the same volume is perceived by someone as small, and by someone as large. The second place in terms of questions is occupied by delivery times - buyers are used to the fact that online commerce is a quick way to receive goods. We always deliver once a month according to a known schedule.

Just a razor club

Grooming supplies delivery project created by people with extensive experience in the sale of razors, cartridges and other everyday products. The future founders learned about the successful launch of a similar project in the US and decided to launch in Russia. Customers are offered three models of razors and cartridges, as well as three delivery programs - from a month to a whole year. Depending on the subscription option, the price varies from 300 to 1,499 rubles, including delivery throughout Russia.

Vladimir Mokhte

founder and director of "Just a club of razors"

In my opinion, the future belongs to services like ours. After all, we help people in solving their routine and daily problems that inevitably arise. And it’s not at all necessary for a person to spend a lot of time on such small and insignificant things - after all, in Everyday life there are many others, more important issues that require our close attention.

"Two palms"

"Two Palms" - a monthly collection of ideas for joint activities of children and parents. Each set contains not only games, but also books, stationery, didactic material, craft blanks and detailed instructions. The materials of the box consist of four developmental areas - gaining knowledge, reading, creativity and entertainment. A selection of each month is dedicated to new topic. For example, over the past six months, customers have received themed nautical, musical, circus and space sets. The cost of one box is 1,399 rubles.

Natalya Kavylina

COO "Two Palms"

We have created a project for advanced mothers who seek to actively develop their child, and busy fathers who have absolutely no time, but have a desire to take care of their baby. It has also become a great gift idea for friends and family who want to give something unusual and useful. For the entire duration of the project, we have not received a single negative review. The only difficulty at the moment is logistics. Offered by Russian carriers transport services in terms of quality, they are still far from perfect in terms of such basic indicators as accuracy, quality and efficiency of transportation. While in the context of the rapid growth of Internet commerce and the lack of time for busy people, these subscription services have every chance of success. Based on the experience of foreign analogues, we can safely say that the subscription model could quickly master new niches and become an additional distribution channel.

coffeetrue

The Coffeetrue website offers a limited number of positions and does not overload the consumer with unnecessary information - this is what its creators believe competitive advantage. In the description of the varieties, only the most necessary, visualization through infographics. Thus, the authors are trying to turn freshly roasted coffee from a product for coffee geeks into a product for a wide range of consumers. Seven varieties of coffee from seven countries are roasted on their own and, taking orders a week in advance, are transported to private and to corporative clients in Petersburg and Moscow. The cost of a kilogram package of coffee is 1,330 rubles.

Konstantin Konstantinov

founder of Coffeetrue

We approached the process of organization and planning very responsibly and we can say with pleasure that no complaints have been received to date. Of the interesting - two months ago there was a case of the fastest conversion of a client in our practice. A representative of a small Moscow office called and asked for an invoice for the next month fifteen minutes after receiving the shipment from the courier. In the conversation, it turned out that all the employees simply gathered in the kitchen, poured beans into the coffee machine and drank a cup of espresso. In many respects, the situation of development of this direction in business will depend on the regulations on Internet commerce, you never know what your favorite legislators will come up with today. And without a doubt, the fate of each service is directly in the hands of its creator and performers.

Allurebox

But the launch of the service in Russia was inspired by the work of the American analogue of BirchBox, created in 2010. The service, under the wing of the beauty magazine Allure, has been operating for three years and has been collaborating with luxury brands, presenting either their new products or the brand's bestsellers. As with most of these services, you can make a one-time order of a set of care products and decorative cosmetics, or you can issue a seasonal and annual subscription. The cost of a single order is 625 rubles, and subscriptions will cost 1,750 and 3,300 rubles, respectively. Almost every month there are also limited edition boxes dedicated to a particular theme or brand. For example, in February, a selection of funds for men was released.

Nikolay Potylitsyn

founder of AllureBox

We always read subscribers' reviews about each box, listen to criticism, and take note of wishes. In January, for example, we conducted a large-scale study to find out which products girls liked the most, what they would like to see in AllureBox this year. If unpleasant situations happen, we figure out what the problem is, and try to solve it as quickly as possible, to please with a pleasant bonus or gift. Judging by current situation, then in the next two years, a lot of different “boxed” services will probably appear. However, this method of distribution is far from suitable for every product; nevertheless, one should not forget about expiration dates and individual customer needs. With cosmetics, of course, everything is somewhat simpler.

"Home is tastier"

The team that delivers products for convenient cooking takes orders for five dinners for two or four people at once, depending on which the sets cost either 2,500 or 4,000 rubles. All ingredients are packaged by day of the week. As needed, some foods are vacuum-packed, spices are boxed, some of the vegetables may already be cut, and meat and fish are most often frozen if included in a week-end meal. Sets can be ordered in Moscow, as well as in St. Petersburg and its suburbs.

Andrey Koshcheev

founder of "House is tastier"

Such services should work, if not on a federal scale, then within million-plus cities for sure. In addition, various niches are gradually filling up - for example, the vegetarian and children's menus, which we also try to pay attention to. Sometimes customers complain. But mostly on trifles: someone has a lot of meat, someone - not enough. We are the only company that has made its communication with customers completely public - we have more than 10,000 posts in our group discussions. There is even a separate branch - "Shoals" - where we carefully deal with each complaint.

Kumin

Alexander Nekrasov and Kirill Brusov conceived their project after reading about the Hellofresh service, which is gaining momentum in the West. The Kumin project is a delivery of ingredients for three dinners. There are five courses to choose from, and orders must be made a week in advance. The cost of one box for three dinners for two is 1,790 rubles. When subscribing, such a culinary set is brought to the customer every week, but it can be purchased once.

Alexander Nekrasov

co-founder of Kumin Food Service

Such services have a great future. As soon as people have trust, they will begin to actively use. We will develop various sets, increase the number of deliveries and their geography, expanding target audience. Over time, such services will occupy an increasing share of the grocery retail market. In fact, there is no criticism of our service, and this is alarming. Nearly 70% of those who subscribe keep it. But someone leads a slightly different lifestyle, and someone wants, for example, to get chopped vegetables. But we bring all the ingredients in their original form so that people can participate in cooking.

Hello!

The subscription business, according to experts, is one of the fastest growing e-commerce segments. This direction is considered a niche market, but since 2013 the number of online stores selling products by subscription has grown by 3000%.

We will tell you in which segments it is worth opening such a business and what features it has.

You should not consider electronic subscription services as competitors. For online stores, this is rather an opportunity, an alternative (and possibly evolutionary) branch of business development, the sale of related and complementary goods.

But this segment is developing according to somewhat different rules than the “traditional” online trading. The subscription business needs a lot more attention. Often it is carried out in a "manual" mode and requires more imagination from the seller in attracting buyers.

A signature order cannot simply be boxed and shipped to the customer. In a subscription business, the customer perceives the product more like a monthly "gift". Therefore, you will have to work on how to differ from the "boring" regular supplies of online stores. This includes both branded packaging and special organizers in boxes that prevent mixing of goods. In general, it should be interesting and creative, otherwise the subscription, which is not yet so popular in Russia, may be abandoned.

In what areas can a subscription business go?

1. Grocery and food

The fact that one of the key trends in e-commerce in 2017 included the delivery of ready-made food and groceries. These are the same products that will go by subscription. Products that need regular replenishment (pasta, cereals, sauces, and so on, including perishable ones) work well with a subscription model.

For example, the Food Party project offers to choose the appropriate menu for the week (classic, family, vegetarian, premium, fitness) and receive a box of prepackaged ingredients and recipes right to the door. This relieves the headache of many - what and how to cook for the evening: a ready-made set of necessary products is waiting at home.

Service "Food Party"

But such a subscription is a rather complicated and responsible matter. Consumers are not yet accustomed to buying products (unlike fast food) via the Internet, they may doubt the freshness of the goods, make claims that “tomatoes are not big enough”, and onions are wilted. These risks must be taken into account.

Alternatively, subscriptions can offer trendy organic, vegan, gluten-free products that are not available in regular stores. Thus, you will work for a rather narrow, but true target audience.

Also, this option is likely to be chosen by gourmets, who can be offered a subscription to expensive chocolate, Japanese sweets, good coffee, exotic fruits, and so on.

Buyers will certainly pay for a subscription to products from local farmers. The main thing is to find reliable permanent suppliers.

2. Fashion

There are several options for attracting fashion and footwear lovers on a subscription basis:

• Give good discounts to give the opportunity to purchase exclusive goods, to receive free shipping subscribers for purchases in a particular online store.
• Sign up for personalized recommendations and advice from a professional stylist, with an offer to select certain products (once a month or per season).
• Offer a subscription to “consumables”: socks, underpants, handkerchiefs, and so on.
• Try to rent out things: sign up customers for a fashionable "sweepstakes", send certain things that can be returned after a certain time. The client pays the rent.

Subscription clothing rental service

The option of "fashionable" subscriptions has its drawbacks. Things may not fit or please customers, plus, you must be prepared for the fact that they may want to return the goods.

3. Animal food

Pet products are ideal for a subscription business. Owners of dogs and cats will certainly be happy to get rid of tedious trips to the store for food. In this way, you can also sell toys, hygiene items, vitamins and nutritional supplements, hair care products, treats, and so on.

You can put only one product in a subscription box, or you can make an attractive assortment that will last for a certain time.

PETSHOP BOX service

4. Beauty

Beauty boxes are a fashion item that is very popular due to a number of factors. By subscription, as a rule, miniatures come that you can try out (and then buy, if you like, a full-fledged package). This is a good opportunity to purchase a dozen items at an affordable price and test them without damaging your wallet. Or sell consumables - shaving accessories, perfume.

Also, such a subscription is a great gift: usually the exact dates of sending the next beauty boxes are announced in advance, so you can guess for a certain holiday.

Vladimir MOKHTE, founder:

There are four big players in the wet shaving market: Gillette, Bic, Dorco and Schick. Price policy the most hyped of them, Gillette, is that the machine is inexpensive, but you have to pay more and more for replacement cartridges each time.

In January 2013, the idea arose to conclude a contract with Dorco, where I work, for the supply of machine tools and no brand blades for a new service. This is how the "Just Razors Club" appeared. We sell the same Dorco razors made in South Korea, but much cheaper - due to the fact that they do not have a brand.

A two-month subscription to our most expensive set will cost 380 rubles. For this money, the courier will deliver a machine and four replacement cartridges to your home (a man who shaves every other day needs to change the cartridge twice a month). Buying blades of similar quality Gillette Fusion will cost about 600 rubles.

The project started in mid-June. Today we have 300 regular subscribers and another 100 people who signed up for a one-time subscription to test the product. The plans are to send SMS reminders to our community members every two weeks: "Dear Igor, your cartridge is probably dull, replace it, or you risk going to work with a swollen face."

Price

from 150 to 190 rubles
per month

The team and I spent four months to launch the project and invested more than 500,000 rubles from own funds. On October 1, the selection of projects for the accelerator of the Internet Initiatives Development Fund was completed. According to its results
50 projects, including "Prosto Razor Club", will receive investments in the amount of one million rubles, mentoring support and premises. Each company has a goal. If it is reached within three months, the investment will continue. Under the terms of our agreement with the IIDF, during the program we must increase the number of active members of our Club several times (under the terms of the agreement, the KPI value is not subject to disclosure. - Note. H&F).

Till the only way monetization of the project is a subscription to the razor. The plans include the delivery, along with machines, of bonuses from our advertising partners. These will be samples of goods necessary for shaving: gels, foams, lotions.

According to the business plan, we will reach self-sufficiency in six months, profit - in 10-12 months. After the New Year, we plan to add women's razors. In the next round of investment, we will add gels, shaving foams - also no brand.

Subscription implies high customer loyalty, that is, you can not be afraid of seasonal demand. This means that revenue and sales growth can be easily predicted. 90% of customers who subscribe to our razors renew it.

"Pet without the hassle"

Alexey ALEXANDROV, Founder

I am the owner of a Chihuahua puppy. Due to the tight work schedule, I did not always have time, and sometimes I forgot, to buy food for my pet. My dog ​​eats the same food. It is not for sale at Crossroads or Auchan. It is available only in a specialized store, and it is often too lazy to go there or there is no time. Realizing that I'm not the only one facing this problem, pushed me to create the service "Pet without the hassle". I assembled a team of like-minded people, and at the end of this spring we launched. 60,000 rubles was enough to create a website and purchase the first batch of feed.

To begin with, we tested the idea on friends. We looked at how often they would order food. We started with a fixed delivery once a month, but realized that such a rigid framework is not suitable for everyone. Even for the same customer, the order frequency is not always the same. This forced us to make a special calculator on the site, which, taking into account all the data, will calculate how often you need to buy food. Now this technology is polished. Ideally, we want to have a tool that will allow us to send reminders to subscribers just in time for the feed to run out.

Price

from 1,000 rubles
per month
+ shipping

We rely on the fact that online sellers have an understanding: food is a product that pet owners need all the time. Every month a person is forced to buy it. The question is will he make it in your store
or go to another

So far we are not working directly with feed suppliers: there are not so many orders. We have agreed with several large stores for animals. They sell us part of their goods at a price slightly higher than the purchase price.

Delivery is carried out only within the Moscow Ring Road. The cost is fixed - 150 rubles. We deliver food to our subscribers ourselves. We want to personally ask everyone what they like and what they don't. We have 27 regular customers. About 50 more make trial orders every month, come and go.

You can continue to develop this project, or you can optimize the subscription process, improve the calculator and sell this service to large online stores as a finished product. We rely on the fact that online sellers have an understanding: food is a product that pet owners need all the time. Every month a person is forced to buy it. The question is whether he will do it in your store or go to another. The subscription allows you to keep the client. We can provide a service that will help build long-term relationships with customers.

"Two palms"

Natalia REVYAKINA, Founder:

"Two Palms" is a box of educational materials for children that comes to your home every month. We were inspired to create a project with like-minded people by a similar subscription service in America - BabbaBox. We have adapted the box to Russian realities and already in September 2012 we sent out the product to the first subscribers. Investments in the project since its launch amounted to one million rubles. Each Two Hands box contains four directions: study (methodological, developmental material), read (book), create (three projects that the child must do with his own hands) and play. Every month the box has its own theme. In October there were dinosaurs, before that - sports and insects.

The stuff we send to our subscribers can't just go and buy it in a store. For the very first box, we came up with such a thing as an ocean of jelly. We bought jelly, semolina, shells, small figurines of marine inhabitants, a special container, packed them in boxes, attached instructions on how to make a toy ocean, and sent them to the children.

Price

1 399 rubles per month

Under each box, a training manual is made, which is written by psychologists. You can just get a deck of cards
with fish - and what's next? our manual offers about six games for development

Under each box, taking into account the material presented in it, a training manual is made, which is written by our psychologists. You can just get a deck of cards with fish - and then what? The instruction offers about six educational games. In principle, these are well-known methods. But it takes a lot of time to find them. Subscription commerce works in our case, because everything was assembled for you and the product was delivered on a turnkey basis.

At the moment, the main problem for us is the lack of a payment system that would allow withdrawing from the subscriber not the entire amount for the subscription at once, but equal shares every month. Agree, there is a difference: lay out 4,000 rubles for three months or pay 1,399 rubles every month.

In 2013, we plan to sell 2,000 boxes. So far, the project is monetized only by subscription. In the future, we could become a good channel for toy suppliers and book publishers. This month we received an investment of one million rubles from IIDF. In the next three months we will work with a mentor -.

GLAMBOX

Nikolay POTYLITSYN, Founder:

I often visit friends in America. One day I saw a BirchBox with makeup samples from them. I immediately realized that the idea could be in demand in Russia. When I returned home, I quit the bank, found a partner who invested $200,000 in the project, and while the programmers were building the GlamBox website, I began negotiations with brand managers of the largest cosmetic distributors. The most difficult thing was to persuade them to give me promotional materials for free. A small bottle of perfume on the way from Europe to Russia rises in price from 1 to 5 euros. To give even a few hundred, still not clearly realizing what the return will be, is a dubious enterprise. Over time, I figured out how to persuade brand managers to meet by phone: you need to call, quickly, in the same breath, tell about the project and, without giving the interlocutor time to come to his senses and ask questions, make an appointment.

It was important to conclude an agreement with one distributor. The rest began to pull themselves up as soon as they found out what competitors were doing. Some managers, mostly young girls, who are interested in everything that happens in the field of cosmetics abroad, knew about the existence of similar boxed services, it was easier to negotiate with them.

A year after the launch, our business went neither shaky nor rolls. 3,000 boxes a month didn't even break even. In August 2012, friends from Condé Nast told me that Allure, a beauty magazine, was launching in Russia. I understood how mutually beneficial our cooperation could be: by that time we had formed around ourselves specific audience that the new edition needed. They, in turn, could provide us with free advertising. In February 2013, our boxes changed their design and were announced for the first time as Allure sample society boxes. After that, many brands came to us interested in free advertising in gloss.

Price

599 rubles
per month

The standard set consists of six miniatures: hand, face, body, hair, decorative cosmetics and fragrance. So brand products do not compete with each other within the same box.

After receiving samples in cosmetic networks, 7-10% of customers make a purchase. At the same time, more than 20% of recipients of samples in a box buy tested cosmetics. We know about this thanks to discount coupons with special barcodes that we attach to a particular product. This is how brands see the return on the project.

We now have 8,000 permanent subscribers to the Allure sample society standard boxes. In addition, every month we release limited editions: ManBox for men, SlimBox for weight loss, TravelBox for trips, Greenbox ecocosmetics, we present mono-brand boxes every three months. As a result, about 10,000 boxes a month come out.

A standard set always consists of six miniatures: fragrance, hand, face, body, hair, decorative cosmetics. So products of different brands do not compete with each other within the same box. We work only with samples of luxury cosmetics (the price per product is on average over 1,200 rubles). Mass-produced brands are actively trying to build relationships with us, but so far it is not in my plans to put their products in GlamBox.

In April 2013, after a year and nine months, we paid back the investment and became profitable. Even now I can say in advance what will be in my boxes in 2014. Companies budget for a separate cost item for samples for GlamBox for the year. 10 people are currently working on the project with me. However, I alone negotiate with all 96 brands that we have. I can't trust anyone with this.

"Local food"

Anastasia Kolesnikova, Founder:

At the end of 2012, my friends and I wanted to make a local food festival for local producers - something like a show twice a year. Even then, we began to look for sponsors and partners for this project. The idea of ​​the festival remained an idea. But our relations with local producers have grown into a project for subscribing to the "Local food" box. We differ from the LavkaLavka subscription farm basket in that our client never knows in advance what will be in the box. From the 1st to the 20th of each month, we accept applications, and the next week we deliver the boxes. For manufacturers, this is a great promotion.

Each box contains eight products from different suppliers. We do not put foreign products in the box and try not to repeat ourselves.

Price

2 500 rubles
per month

All drawer components are checked
sanitary service. Participation in our project for suppliers is free,
Moreover, our producers
we give money for products

All components of the box are checked by the sanitary service. In addition to the quality of the product, its packaging is very important to us. Participation in our project for suppliers is free. Moreover, we give money to our manufacturers for products (at least their cost).

At the moment we have about 50 regular subscribers, one box costs 2,500 rubles. To reach a new level of income, we need to refocus on corporate orders, as an increase in private subscribers proportionally increases the cost of logistics.

Text: Regina Ader

Confirmation that everything ingenious is simple will be the business organization scheme for online stores discussed in this article. However, sites that offer products according to a similar scheme can not even be called online stores, but rather services.

"Subscription commerce" or "subscription products" - this is the name of the work model in the West, based on recurring sales and the formation of a permanent audience of buyers. This is beneficial both for the buyer, who saves time and money, and for the seller, who can be sure in advance of a certain volume of orders.

It is too early to talk about the success of this type of projects in Runet, but the model itself looks very attractive. Now that you understand that the subscription business is not only newspapers and magazines, let's look at some interesting services that work this way.

"Just the Razor Club"

Website: shaveclub.ru

The service specializes exclusively in offering subscription razor sets, which cost 150, 180 and 210 rubles for razors with three, four and six blades, respectively. Interestingly, the club member receives no brand machines, but their quality is at the level of the same famous brands. It's just that the creators of the service managed to negotiate with manufacturers on the supply of their own products, but without the brand logo.

GlamBox

Site: glambox.ru

The creator of the service spied on the idea of ​​boxed delivery of cosmetics sets in the USA and decided to try to implement it in Russia. The most difficult thing, according to him, was to negotiate with the managers of large cosmetic distributors. But as soon as it was possible to establish cooperation with several of them, the rest pulled themselves up.

A year after the launch of "GlamBox" began to cooperate with women's magazine Allure, which allowed both startups to grow through mutually beneficial growth. The standard set consists of samples for different purposes, which allows brands not to compete with each other.

Coffetrue

Site: coffeetrue.ru

One of the products that is in constant demand is coffee, familiar to everyone and loved by millions. The sale of coffee beans by subscription is a promising topic, which, apparently, was understood by the creators of Coffetrue. The peculiarity of their approach is to offer a limited number of varieties, but at significantly reduced prices for buyers and with a guarantee of quality.

Subscription products are definitely a promising line of business, so the services we have listed are only a part of those that are currently on the market. In addition to them, there are examples of the sale of food, socks, underwear, pet food and other products.

An interesting point is that in Russia business according to this model is just beginning to develop, which means that the entry threshold for new participants is relatively low. Such services have a great future, so think about it: perhaps this is the line of business that you yourself would like to do.

The subscription model has long been popular with some stores. For example, the famous Dollar Shave Club sells razors in this way. There are many other examples - Japanese Candy or Dutch Waffles, there are even subscription guitar delivery services.

How the subscription model works

A classic online store is a catalog where the customer chooses desired goods, pays for them and waits for delivery. He does this every time he wants to buy something.

But there are some products that are bought regularly. For example, socks, razors, diapers, guitar strings, pet food, and so on. The same thing, in the same volume, with the same frequency. In this case, the subscription model works well.

How it works:

1. The client buys a subscription for a long period: six months, a year - for the right to receive goods with delivery "on schedule".
2. Pays immediately for the entire period, all consignments of goods.
3. Receives goods with home delivery with a certain frequency: once a month, once a week, depending on the goods.
4. A subscription product usually costs less than a simple catalog product - the seller negotiates a reduced price with the supplier, making a profit on volume and guaranteed "pay in advance" of a large batch of goods.
5. The buyer receives a good price and regular deliveries of goods, which are also needed with a certain frequency.

Are there certain types of companies that are more suited to this model than others? How can companies use this to increase profits? How are subscription shoppers different from regular shoppers in terms of long-term ROI?

Of course, the subscription model itself is nothing new. We subscribe to newspapers and magazines, TV channels, buy subscriptions to fitness clubs, and so on. But there are more and more products that are sold under this model. And this format is beneficial for both the buyer and the seller.

Customers get their favorite product without leaving home. With employment on the rise, it's no surprise that this sales model is gaining momentum.

The figure below shows the ratio (total profit from the buyer for his life cycle) for subscription customers and regular customers (by transactions), the sample is retailers who work with both of these sales models. A value above the green line indicates that the subscription customers of these companies have a higher LTV than regular customers.

LTV ratio for subscription and regular customers

Shops with average cost carts up to $25 have LTV 1.78 times higher for "subscribers". Similarly, stores with an average check of 25-50 and 50-75 dollars have more advantageous positions. Stores with an average check of more than $75 have a higher LTV for regular shoppers, not subscription shoppers.

Which industries are leading in subscription sales? These are "food and drink" and "health".

Expected, as in the goods daily demand, as in medicines and cosmetics, buyers have a need with a certain frequency - the subscription model is ideal for these segments.

Benefits of the subscription model

1. Easier to get higher LTV

In the traditional sales model, the first purchase is only the first step, to turn a customer into a loyal one, the store needs to do a lot of work with loyalty, upsells, repeat sales, remarketing.

The subscription model has a much clearer idea of ​​the cost per customer. All you have to do is calculate the average time that a customer stays a subscriber and you will already know the LTV value (which means you can figure out how much you can afford to spend to get them).

What is more important - despite the fact that the client pays every month, he must make a purchase decision only once. That is, the burden associated with decision-making is automatically removed from the client when selling by subscription.

1. More predictable monthly income and growth

With a higher bounce rate and a clear idea of ​​how long a customer stays with you on average, it becomes easier to predict monthly earnings. You can know exactly how much you can spend on acquiring a new customer to drive sales growth.

1. Easy shipping process

Most subscription stores have only one product, sometimes with multiple "tiers" of subscriptions. This limits the number of packages that must be collected and delivered per month. The delivery process becomes predictable, transportation costs become easy to predict.

1. Selection is kept to a minimum.

The abundance of options has a paralyzing effect on buyers, the subscription model eliminates this problem.

1. Buyers are easy to identify

Usually subscription buyers are a separate segment of the audience, so their behavior is easier to model, and their desires are easier to guess.

Subscription types

There are several main models.

Death Wish Coffee, which sells the strongest coffee beans, had two goals: to scale the business and find ways to keep customers coming back for purchases. Coffee is bought regularly, which is why the subscription model was a good solution - the company soon achieved a 20% increase in revenue through repeat purchases.

With the help of the ReCharge app, energy drink manufacturer 5-hour Energy has managed to achieve an excellent result: today 45% of sales are subscription orders with Shopify. A few months after the subscription launch, the company reported that their subscriber base was growing by about 10% every week.

Surprise in a box. Specific subscription model: a box with individually selected products in a specific category. For example, Birchbox works according to this model - they deliver a box of perfume samples to the client's door every month. The Cratejoy service offers sets of "surprise boxes" of various themes: gifts for moms, books, or even, for example, boxes for fans of the Teenage Mutant Ninja Turtles series. The peculiarity of such a subscription is that the client receives not only goods with delivery, but also pleasant emotions from intrigue.

closed clubs. Subscription is also seen as a way to increase loyalty. Higher status customers get exclusive access to products, content and services.

Content is also a commodity. For example, the Russian online magazine SLON gives access to full versions articles only to those who have paid a subscription.

Premium service. There are some customers for whom the price does not play an important role, while they do not want to wait for their turn for service, delivery, and so on. Especially for them, stores sell a subscription to a premium service.

Grace period for subscription. There is a different subscription model: the customer buys a “price discount period” during which he can buy goods on the site at a wholesale price. And also pays for storage and shipping. The seller makes a profit not due to the sale of marginal goods, but due to the large flow of customers and the predicted life time value.

The online hypermarket of food and household goods Naturamarket.ca has such a system: the store offers goods by subscription at a reduced price - 25-50% below the market price. This is possible due to large sales volumes and clearly predictable risks. To encourage customers to buy more, the store guarantees free shipping on orders over $75 (as we remember, this is the upper limit when the LTV of subscribers is even higher than the LTV of ordinary buyers).

findings

Subscription sales work exceptionally well for those stores whose average check value is less than $75 (in the west, in Russia, the price values ​​are comparable). The most frequently used subscriptions are in the consumer goods and health and beauty segments. But even if your business does not belong to any of them, you have every chance to establish sales by subscription - numerous successful examples this is confirmed.