It’s time to start thinking inside the box as more companies are embracing the subscription model. The largest subscription-based players generate more than $2.6B in sales, and startups in niche categories like contact lenses and luxury shoes are growing nine times faster than their traditional competitors.
In 2018, Amazon Subscribe & Save, Dollar Shave Club, Ipsy, Blue Apron and Birchbox were the five most popular subscription ecommerce sites.
Some industries have completely converted to a subscription model; Gartner predicts that by 2020, up to 80% of software will be sold as a service.
But before making the move to this great opportunity, there are a few threats to keep in mind:
According to Zuora CEO Tien Tzuo, subscription-economy companies “live and die” by their ability to serve their customers. They aren’t selling products or services, but experiences. They aren’t securing one-time transactions – they are building and monetizing long-term relationships.
“Ask yourself why companies like Google and Amazon are the fastest growing,” says Tzuo. “It’s because they don’t see themselves as a bookseller or computer manufacturer or a search engine. They see themselves as a platform with billions of customers able to use that platform to address all the aspects of their needs.”
To succeed in this new subscription-based economy, a change in the way customers are approached needs to happen.
Three key areas to master for exceptional customer experience
If adding subscriptions are in the near future plans, how the technology stack supports all this will be a key enabler to a seamless consumer journey. “When you offer subscriptions, immediately a slate of user stories need to be added to your commerce experience to form the foundation of subscription transactions and management,” says Rohit Garewal, President at Object Edge Inc.
For their own business purposes, Garewal and his team ended up mapping out 21 additional journeys. Here are their five bigger ones, broken down into subscription transactions and subscription managagement:
The subscription model isn’t new, but companies now have powerful tools that can help them respond to customer needs in a much more dynamic and accurate way. It comes down to the right data, the right tools and the right ecommerce platform.
Headless commerce platforms separate the frontend and backend, so businesses can create brand-defining customer experiences while maintaining stable backend business systems. Even if those backend systems need replacing, companies can leverage headless commerce to innovate and stay ahead of the competition.S