Offering subscription options to shoppers is a newer, direct-to-consumer ecommerce model that revolves around recurring deliveries. In short, products are automatically sent to customers at certain time intervals (usually at a discount). It could be recurring orders for individual products, consumables, or surprise subscription boxes.
Eleven percent of Canadians have ordered an average of two subscription boxes in the past year. Twenty-three percent have over 41 subscriptions!
Canadian online retailers have discovered multiple ways to use recurring orders to their advantage. The model can offer much more than a predictable revenue stream.
Online retailers are using subscriptions to:
- Increase leads & sales
- Diversify with a recurring revenue model
- Improve customer loyalty
- Increase engagement
- Upsell
- Add an additional gifting option
- Solve a problem for customers
- Feed data-driven insights
Canadian Consumer Demand for Product Subscriptions
Predictably, the likelihood of Canadians signing up for a subscription increases with the frequency of online purchases they make overall. Since online shopping has experienced a growth spurt in Canada and around the World, it’s reasonable to assume subscriptions will grow too.
“We’re seeing increasing demand from consumers for the convenience of the subscription model,” said Brent Shepherd, subscriptions team lead at WooCommerce. “This demand may evolve into an expectation from consumers that a subscription will be available for things not traditionally offered on subscription but well suited to them, like groceries. This expectation creates new opportunities for existing businesses and startups alike.”
What Products Do Canadians Subscribe To?
Finding recent data related to online subscription sales in Canada is challenging, but we rounded up what we could find for you.
Subscription Boxes:
A report from Canada Post found the following categories were most popular among subscribers.
28% Meal Kits
25% Food/Beverage
22% Beauty
13% Health & Wellness
12% Clothing
10% Books
7% Hobbies
7% Lifestyle
7% Pet
6% Children
5% Tech/Games
3% Jewelry
Automatic Recurring Deliveries:
32% Beauty Products
28% Non-Perishable Groceries
27% Health
17% Baby Products
15% Office Supplies
14% Pet Supplies
13% Perishable Groceries
3% Cannabis
Automatic ordering options could accelerate company growth as well, suggests a recent report from Shopify. According to The Subscription Economy Index, subscription businesses experienced revenue growth that was five times faster than S&P 500 company revenues (18.2% vs 3.6%) and US retail sales (18.2% vs 3.7%), from January 1st, 2012, to June 30th, 2019.
Getting Started
Amazon’s Subscribe & Save is an example of this online retail model, but you don’t have to be a giant to do it just as well as they do (if not better). Managing recurring payments for subscriptions is easy with the better eCommerce platforms.
For example:
– Canada’s Shopify offers several app options for subscriptions that can be added to your platform with a click or two.
– WooCommerce has a subscription extension that facilitates a variety of subscription models for physical or virtual products and services.
You might be able to add subscriber options to your existing shopping cart, if you want to piece something together. Send an email to your cart or eCommerce platform provider to find out what is available to you.
Up Your Game
Consider building a community around subscribers, with member-only bonuses like an ebook, exclusive newsletter, discounts, or access to a special members area on your website. Providing value is the number one way to reduce your customer churn rate.
Are you considering subscription boxes or products for your online store? Please share your questions or tips in the comments below or discuss this and other online business topics in the Online Business Canada Facebook group!
Related Reading
Subscription Fatigue: Are Consumers Tired of Subscription Boxes?
Is Your Product Embarrassing? 9 Proven Ways to Bring in Reviews
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Subscriptions are a no brainer for retailers with suitable products really. Why not make it easier for repeat customers to buy from you? Above all else — CONVENIENCE SELLS.
I’m concerned subscriptions might be saturated even with all of the niches. It feels like a novelty or fad. Are there entrepreneurs here who are still selling subscriptions? Have sales grown?