Trends and common approaches, types of offers, and numbers behind product subscriptions in e-commerce.

1. WHEN PRODUCT
SUBSCRIPTIONS
MAKE SENSE
FACTS &
NUMBERS

2. Ewa Wysocka
CEO at tribe47
Founder at PortalYogi
Arkadiusz Wiśniewski
CEO at Sublime

3. tribe47 executes
growth
Sublime
{measures} growth

4. 1. Facts & trends that will surprise you (or not!)
2. Metrics that will confuse you 😝
3. Pros & cons that will confuse you even more 😬
4. Common approaches & conclusions to give you relief 😸
Session agenda >>

5. WHY?

6. 70% of organisations have
deployed subscription
services or are considering it
Source: Gartner
>> SUBSCRIPTION IN ECOMMERCE

7. Customers
do sign up
for product
subscriptions
Source: Statista
>> SUBSCRIPTION IN ECOMMERCE

8. And it
grows!
Source: eMarketer
>> SUBSCRIPTION IN ECOMMERCE

9. 1. Is subscription a good choice for EVERY
ecommerce?
2. How to make subscription successful?
{KEY QUESTIONS ON OUR MINDS}
>> SUBSCRIPTION IN ECOMMERCE

10. SOME
THEORY
FIRST

11. There are
3 types
of subscription
businesses
>> SUBSCRIPTIONS IN ECOMMERCE
PRODUCT
subscriptions
(BOX subscriptions)
Source: Deloitte
SERVICE
subscriptions
E-COMMERCE
subscriptions
Your KAYA
PsiBufet
MięsnaPaczka Allegro
Amazon
Empik
Wyborcza
PortalYogi

12. >> SUBSCRIPTIONS IN ECOMMERCE
Replenishment
subscriptions
Curation
subscriptions
And 2 types
of PRODUCT
subscription
businesses
Your KAYA
nikalab
BirchBox
StichFix
PsiBufet
MięsnaPaczka

13. … and two common business models
>> SUBSCRIPTION IN ECOMMERCE
Subscription only
≫ Mięsna Paczka
≫ PsiBufet
Hybrid
≫ Your KAYA
≫ nikalab
Source: Sublime

14. >> SUBSCRIPTION IN ECOMMERCE
First famous product
subscription in ecommerce
On July 19, 2016 it was acquired by Unilever for $1 billion

15. PROS
& CONS

16. 2 main reasons companies
love subscriptions
>> SUBSCRIPTION IN ECOMMERCE
Revenue stability
≫ retention rate 3-5x higher!
Higher CLV
≫ CLV 1.6 - 3.6x higher!
Source: Sublime

17. The main reason companies have
troubles with subscriptions
>> SUBSCRIPTION IN ECOMMERCE
Higher CAC
≫ 1-3x higher
Source: Sublime

18. However, CLV / CAC ratio
is still 2–3 times higher
for subscriptions than
for one-off purchases
More on CLV / CAC HERE
>> SUBSCRIPTION IN ECOMMERCE

19. 2 main reasons customers choose
subscriptions
>> SUBSCRIPTION IN ECOMMERCE
Financial incentive first!
Source: Deloitte
Convenience second

20. Typical price difference
between one-offs
& subscriptions
15% – 25%
>> SUBSCRIPTION IN ECOMMERCE
Source: Sublime

21. Make sure subscription
discount is higher than your
best promo!
>> SUBSCRIPTION IN ECOMMERCE

22. Main reasons why customers don’t
buy subscriptions:
>> SUBSCRIPTION IN ECOMMERCE
Prefer to pay as they go
Don’t see the value
They are occasional users
Source: McKinsey

23. >> SUBSCRIPTION IN ECOMMERCE
Can the subscription
payment method
(card–only) be an issue?

24. 1. USA: 80%+
2. UK: 75%+
3. GERMANY: 55% +
4. POLAND: 25%
% of subscription-friendly payments
in ecommerce (digital wallet & card)
>> SUBSCRIPTION IN ECOMMERCE
Over 55% of online
payments are done
via BLIK & Bank Transfers

25. Your Persona perspective
will play a role here!
>> SUBSCRIPTION IN ECOMMERCE

26. HOW TO
RETAIN IT

27. “only 20% [of subscription
businesses] will succeed
in increasing customer
retention.”
>> SUBSCRIPTION IN ECOMMERCE
Source: Gartner

28. Reasons customers cancel subscription
>> SUBSCRIPTION IN ECOMMERCE
Dissatisfaction with the product
Prefer to pay as they go
Don’t see the value
Lack of flexibility
Source: Delloite

29. “A successful subscription
business’s economic value
is a function of the strength
of the HABITS they create.”
>> SUBSCRIPTION IN ECOMMERCE

30. >> SUBSCRIPTION IN ECOMMERCE
Not all subscription
businesses are linked
to existing, strong HABITS
– like shaving or using
tampons

31. How habits form:
>> SUBSCRIPTION IN ECOMMERCE
Trigger (which prompts customers to use the product)
Action (the habitual behavior)
Variable Reward (which satisfies users’ need for the service)
Investment (which makes the product more valuable to the user with use)
Source: Nir Eyal

32. 3 reasons why subscriptions fail
according to Nir Eyal
>> SUBSCRIPTION IN ECOMMERCE
Too Many Steps to Psychological Relief
Not Offering Enough Novelty
Lack of Stored Value
Source: Nir Eyal

33. >> SUBSCRIPTION IN ECOMMERCE
Brands started
addressing it

34. WHAT’S
NEXT

35. Forecasts about subscription segments
>> SUBSCRIPTION IN ECOMMERCE
Segment to be
THE BIGGEST
Source: Kerney
Segment to grow
THE FASTEST
BEAUTY & PERSONAL
CARE
FOOD & SNACKS

36. >> SUBSCRIPTION IN ECOMMERCE
Subscription segments by customer
interest:
Source: Kerney

37. Go home with your own
conclusion today!

38. Other cool books on
subscription psychology
>> SUBSCRIPTION IN ECOMMERCE

39. Referred reports & Articles:
>> SUBSCRIPTION IN ECOMMERCE
Deloitte
McKinsey
Kerney
Nir Eyal

40. THANK
YOU
>>