[{"@context":"http:\/\/schema.org","@type":"Article","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#Article","articleBody":"Online subscription services, popularized by startups such as Dollar Shave Club, Blue Apron, and Stitch Fix, are growing fast. These brands are generating enormous revenue and even deposing many longstanding leaders in their respective markets.\nThey stand out from traditional retailers by providing curated products in a box delivered on a schedule, often monthly or weekly. They may replenish consumable products at regular intervals and offer customers exclusive access to products and experiences. And consumers are loving it.\nLook at it this way: Dollar Shave Club was acquired by Unilever for $1 billion in revenue in 2016, meal kits from Blue Apron saw $460 million in revenue in 2020, and Stitch Fix\u2019s personal styling generated $1.7 billion in 2020. Research from the Subscription Trade Association found that online subscription services grew 17% in the last five years. Gartner predicts three-quarters of direct-to-consumer brands will offer subscriptions by 2023.\n \nHow the subscription commerce model is driving a DTC retail boom\n   DTC retail is booming thanks to the subscription commerce model. Learn the benefits of these models and which model is best for your business.  \nOnline subscription services benefits & challenges\nThis new e-commerce norm benefits both consumers and brands. By subscribing, consumers eliminate the chore of reordering, and save money by getting discounts because of their long-term commitment.\nIn return, brands get reliable recurring revenue that simplifies inventory and financial forecasting. However, it can be difficult for companies offering online subscription services to acquire and then retain customers, as mentioned in this McKinsey report.\nSo, how do you maximize the stick rate and minimize churn? Here are three tips to get you started:\nKeep delivery promises\nProvide flexibility\nKeep customers interested and excited\nDon\u2019t be late or out of stock\nWhen your customers buys an online subscription service, they expect to receive products on a regular basis and on time. Think of it from the customers\u2019 perspective: They subscribed months in advance. How could you not know how much inventory you need? While you know it isn\u2019t that simple, your customers will never consider all that goes into supply chain logistics and your other business challenges. All that matters to them is that you failed to meet their expectations. So, always keep an eye on subscription demand and get the inventory ready as soon as possible.\nFor customers, it\u2019s often more disappointing and inconvenient when you can\u2019t fulfill their subscription than it is for them to walk into a store and see that the item they want is out of stock. Customers have high expectations for online subscription services, so don\u2019t let them down.\nOptions spell online subscription success\nBefore a customer joins an online subscription service, they may have concerns about whether the supply and their demand can be matched, which means it\u2019s not always easy for them to sign up for a subscription.\nAlso, customers are much more likely to cancel when products pile up or they can\u2019t customize order volumes to match their actual requirements. For example, they may need to change delivery frequency if they\u2019re going on vacation or need less product in a given week or month. So it\u2019s important to let customers know what options you provide as part of your subscription program. Can they skip one shipment, change the delivery date for the next shipment, or switch to another shipping address?\nMake this clear when customers sign up and also when they inevitably return later with these questions.\n \n2021 Retail trends: From Boomers to Gen Z, the strategies that dominate\n   What key trends should retailers watch this year? Will consumers stick with online shopping or flock back to stores? We've got the answers.  \nKeep up the wow factor\nUnlike\u00a0retail, which focuses on single transactions and average order value, an online subscription services business model revolves around cultivating long-term customer relationships with a focus on lifetime value. It functions more like an ongoing conversation than a series of siloed customer journeys. You must keep the \u201cwarm and fuzzy feelings\u201d alive well after the honeymoon phase, those first few months after customers first subscribe to your service. No matter how long they\u2019ve been your customer, their relationship with your brand should never feel mundane, repetitive, or unexciting.\nTo get a customer engaged and excited, you have to offer something they don\u2019t expect. By intervening with a simple surprise \u2014 such as a relevant e-mail, a free delivery, or a free sample \u2014 you can significantly reduce churn while introducing them to other product lines at the same time.\nFor example, a customer buying coffee beans on subscription could receive a sample pack of butter cookies with a new flavor in a delivery. This may reduce the chance that the customer will cancel the program, and increases the likelihood that they\u2019ll purchase cookies on subscription as well.\nThe peak-end rule in psychology tells us that people judge an experience largely based on how they felt at its peak (its most intense point) and at its end. So, use it to create more excitement in the whole conversation to keep your customers delighted and ultimately, loyal to your brand.\nRev up revenue. Gain loyalty. Learn more about Subscription service succe$$ HERE.","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#Article_Person","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#Article_Person_ImageObject","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/uploads\/2021\/06\/Li-Linda-150x150.jpg"},"name":"Linda Li","sameAs":"https:\/\/www.linkedin.com\/in\/hong-li-b6923296\/","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/linda-li\/"},"dateModified":"2021-06-29T21:41:09+00:00","datePublished":"2021-06-28T10:14:19+00:00","description":"Online subscription services offer brands a lot of benefits, but retaining customers can be hard. Here are three tips for boosting retention.","headline":"Online subscription services: 3 ways to maximize stick rates","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#Article_ImageObject","height":"630","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2021\/06\/Subscription_1200x375-1200x630.jpg","width":"1200"},"mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/","name":"Online subscription services: 3 ways to maximize stick rates","publisher":{"@type":"Organization","@id":"https:\/\/www.the-future-of-commerce.com\/","additionalType":"https:\/\/www.wikidata.org\/wiki\/Q1193236","description":"Relevant, timely information & analysis on commerce trends, both consumer-facing and B2B.","logo":{"@type":"ImageObject","@id":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","height":"96","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","width":"500"},"name":"The Future of Customer Engagement and Experience","sameAs":["https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/www.the-future-of-commerce.com\/feed\/"],"url":"https:\/\/www.the-future-of-commerce.com\/"},"url":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#Article"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2021","item":"https:\/\/www.the-future-of-commerce.com\/2021\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"06","item":"https:\/\/www.the-future-of-commerce.com\/2021\/\/06\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"28","item":"https:\/\/www.the-future-of-commerce.com\/2021\/\/06\/\/28\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Online subscription services: 3 ways to maximize stick rates","item":"https:\/\/www.the-future-of-commerce.com\/2021\/06\/28\/online-subscription-services-stick-rate\/#breadcrumbitem"}]}]