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Deliver Recurring Revenue & Increase Customer Lifetime Value

Convenience commerce is all about simplifying lives, whereas Discovery commerce introduces customers to new items. While both fall under the subscription commerce channel, they’re two different business and marketing strategies with separate goals and outcomes, though they do share some common benefits.

Key benefits of subscription retail

  • Drive new incremental sales and customer value
    Increasing a customer’s purchasing frequency drives more revenue from this customer. Subscriptions enable customers to adopt the appropriate purchasing regularity they prefer based upon usage and convenience.
  • Decrease buying costs
    Subscribers purchase up to 500 percent more often than non-subscribers. This allows companies to amortise buying costs over more orders scheduled, not only increasing sales but exponentially increasing profitability.
  • Enable marketing and up-sell
    Market various up-sells to a customer in each delivery, for example, a flyer about a new product launch or a coupon for a future order. A subscription-specific email campaign that notifies customers before subscription orders ship. This gives shoppers the ability to easily add new items to their upcoming delivery; increasing average order value and margin for retailers.
  • Increase customer retention
    Research and price comparison shopping is at an all-time high, and brand loyalty is at an all-time low. A subscription program ensures that your customer’s next order is coming from you, and not a competitor (online or in-store).

In today’s retail economy, disrupter brands have already made their mark on convenience retailing. Companies like the Dollar Shave Club, (recently bought by global manufacturing giant Unilever for $1 billion) have changed the way consumers shop by using a subscription-based model.

Established retailers with massive customer bases are better placed to retain and deepen relationships with high-value customers, by providing the ability to subscribe to frequently purchased items. Customers are able to save time and money while sparing themselves from those “Oh no! I have run out of X” moments.

This approach for the retailer, not only brings recurring revenue and forecasting to improve buying margins but crucially having a retained customer for a set period of months, also means no investment in re-acquiring their custom, and marketing can concentrate on how to use the captured data, to grow the average transaction value of that customer.

It is worth bearing in mind, that when you implement a subscription-based model, you’re entering new territory which is also being looked at by your competitors and niche disrupter businesses. To ensure success, see this as a separate business channel and take steps beforehand to ensure you and the chosen platform you use to launch this new profitable channel, are agile and able to align with industry trends as they occur in order to remain relevant and competitive in your market.

Key elements for convenience subscription to work

  • Discounts for subscription ordering
  • Free delivery or pick up in-store
  • Self Service Account Management
  • Acceptable returns policy for your business type


Download the Subscription for Convenience Handout