Subscription-based businesses have been growing at a rapid pace over the past decade, spanning a variety of formats and catering to a range of consumer interests.
U.S. sales of subscription boxes were an estimated $22.7 billion in 2021, with growth projected to reach $65 billion by 2027. These types of home-delivery services provide convenience, personalization, and new product discovery for consumers and the opportunity for steady, predictable income for the retailers that offer them.
More than half (54.3%) of global subscriptions are in either the food and beverage or beauty/personal care categories, split about evenly between the two. Other popular categories include health and wellness (16.3% of subscriptions), home goods (11.6%), fashion and apparel (7.9%), and pets and animals (5.6%).
Retailers seeking to capture a piece of this growing segment of eCommerce should look within their scope of expertise and experience to discover recurring consumer needs that are not being met or growing trends where a new niche can be tapped.
Subscriptions tend to take on one of the following three forms: exclusive access to goods or services that are unavailable to regular customers, automatic replenishment of recurring purchases, or curated assortments tailored to accommodate personal preferences. Each variation offers different benefits to the consumer.
Retailers need to decide what type of subscription service works best for their customers and for their own product offerings.
eCommerce subscriptions ideas
Snack items that meet specific dietary requirements
Consumers with dietary restrictions often have a hard time finding foods they trust to meet their demands. Consider curating products in a specific category, such as snacks or beverages, that meet their needs.
For example, SnackSack promises the excitement of product discovery, sending 11–15 new, healthy snacks each month based on four different plans: classic, vegan, gluten-free, and vegan + gluten-free. It also tailors each customer’s subscription based on individual preferences.
Refillable/reusable containers for cleaning products
This appeals to consumer interest in sustainability, as customers buy the container once and subscribe to refills.
Blueland is an example of this innovative type of subscription service. It offers one-time starter kits with containers and then ongoing refills in five categories: liquid hand soap, home cleaners, dish soap, laundry soap, and personal care cleansers. The products come in tablet or powder form, made with conscious ingredients and earth-friendly packaging.
Apparel/fashion that can be rented with the option to buy
Several retailers offer curated apparel subscriptions in which customers only pay for what they keep, and they return the other items unused. A variation is to allow customers to wear an item for short time before returning it, and then making it available at discounted price to other customers.
Customers who sign up for Gwynnie Bee, for example, can essentially rent individual items or entire outfits for a flat monthly fee. The items come with prepaid return packaging for when the customer is finished with them, or they can opt to purchase any items.
Books on specific topics
Consider genres that will appeal to customers month after month, such as biographies, mysteries, fantasy, historical fiction, etc. Also, consider adding value by including related materials with each item, such as maps or figurines.
The Wordy Traveler, for example, offers unique, travel-oriented book subscriptions with multiple payment options. Each package option includes items such as artwork, jewelry, coffee, and other products related to world travel in addition to both fiction and non-fiction books. Subscription prices also include small donations to support the nutritional needs of children and expectant mothers around the world.
Other potential verticals include:
- Crafting kits: Consider offering monthly boxes containing everything the customer needs to make useful items and gifts using craft techniques such as embroidery or tie-dye. Link to online video instructions to create a multimedia experience, and encourage crafters to share their results.
- International meal kits: Meal kit subscriptions allow customers to receive everything they need to make a meal at home, without going to the grocery store. Ideal for customers who like to cook but don’t like to shop, meal kits can be tailored to specific niches, such as globally inspired dishes or ingredients that satisfy restrictive dietary regimens. This trend is on the rise for consumers with 41% having purchased premade frozen meals or meal or cocktail kits in the past year, according to the Square Future of Commerce report.
- Fandom collectibles: Consumers who are fans of everything from sports teams to sci-fi, fantasy or comic-book franchises might be potential customers for subscription boxes filled with collectible merchandise. Items can include apparel, trading cards, special-edition publications, and other memorabilia.
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Making your subscription service work
McKinsey & Company cites four keys to launching a successful subscription business:
- Avoid the “add-on” approach: Retailers should ensure their subscription service meets an unmet consumer need, rather than bundling it with an existing product or service just to jump on the subscription trend.
- Win new customers by providing value: More than half of customers (62%) surveyed by McKinsey said their top motivation for joining a subscription service was that they perceived good value for the price.
- Retain consumers with a variety of great experiences: Experiential elements such as high quality, a varied assortment, and originality help keep customers coming back.
- Maintain relationships and reduce churn with flexible pricing: Just as value attracts new customers, reduced perceptions of value turn them away.
Here is another resource from Square that can help you get started on launching a subscription service. In addition, Square offers tools that are tailored specifically for subscriptions. Retailers can easily create subscription plans and automatically charge customers on a recurring basis.
These tools allow you to:
- Create customized billing models with options such as free trials, flexible plan durations, and flexible billing and invoicing.
- Generate checkout links so that you can market your subscription services in your brick-and-mortar stores using printed QR codes, or facilitate subscription sign-ups via your social media and eCommerce platforms.
- Add and edit subscriptions to ensure payment information is up to date and pause and resume subscription plans as needed.
Square Subscriptions also works for a variety of business services that involve recurring payments, including donations, membership fees, professional services, and more.