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Ecommerce subscription shopping offers many advantages to consumers, from huge discounts to an endless variety of products. Another innovation is the introduction of subscription payment models.
What Are ECommerce Subscription Payments?
In e-commerce subscription, payments are where customers have the option to pay for something online after regular intervals. The point of this business model is to both allow customers to receive something for an extended period of time while allowing the service vendor to stay in business.
This is an increasing commercial trend among online services and businesses thanks to the benefits it offers on either end of the payment gateway. Most subscriptions generally involve monthly or yearly payments, or somewhere in between depending on what they are for.
For online businesses, setting up payment gateways is both easy and customizable. But not all e-commerce platforms offer much room in terms of diversifying payment models. For instance, Magento and Shopify don’t have built-in support for subscription payment and require third party apps to make these services possible.
Meanwhile, many others that do have this feature can only grant it for limited business applications or have inadequate compatibility with payment portals. Businesses need a solution that covers all aspects that make recurring payment models worth seeking out.
WooCommerce is, by all accounts, the top choice of e-commerce platform for a number of uses, and that includes setting up subscription packages for customers. A large portion of e-commerce pages are hosted on WordPress, for which WooCommerce is the go-to plugin for implementing an array of utilities.
In terms of constructing a subscription payment model, WooCommerce allows businesses to set up and differentiate trial and subscription periods of varying lengths, as well as developing and adjusting pricing levels as they please. After incorporating these changes, everything from notifications to transaction details are automated and low maintenance.
It also supports customer analytics, withdrawal for disinterested patrons, as well as the ability to send and receive payments via more than 30 payment gateways, like Stripe, Amazon Pay, as well as multiple integration options for PayPal alone. The icing on the cake would be the robust safety features ensuring secure transactions.
Strictly speaking, if there is an online business or retailer whose services are in long-term demand, they can benefit themselves and others through subscription payment models.Beyond (and because of) that, there is virtually no limit to who can and should implement it. Though, to reiterate, this scheme works best for web-based services.
But even with that caveat, a diverse range of vendors and merchants can fall under the umbrella of viable subscription-based services. Broadly speaking, however, the enterprises that can make use of subscriptions include the following.
1. Service Subscriptions
This is where utility or skill-based services like lawn care, vehicle checkups, house cleaning, health appointments, and other facilities that are regularly acquired become available through recurring payments.
Basically, you choose a plan based on how often you need them, and you pay accordingly.
2. Product Subscriptions
Many of you probably know this better as box subscriptions. Essentially, you pay for goods that you need on a regular basis through periodic transactions. You can either keep, renew, or terminate subscriptions as your needs present themselves over this time period.
Different products are available through subscription payments like necessities (e.g, food, medical or health supplies, toiletries), hobbyist goods (art supplies, gardening tools, etc.), entertainment items, or luxury goods, like perfumes, artisan wines or cheeses, and more.
3. Digital Subscriptions
Some vendors provide subscription services that are available to customers in an entirely digital or device-based context. The most well-known instance of this involves streaming services like Disney+, Spotify, and others which provide video and audio entertainment through monthly or yearly pricing.
Other examples include VPN providers, online paid tools, and various other premium services that are used entirely online.
Pantala is a Spanish company that sells and rents fashionable clothing and accessories to customers for affordable pricing options. It’s website, designed by e-commerce experts at WeLoveWeb, offers a UX-centered interface, and makes great use of serving customers with what they need through subscription-based payment options.
On one hand, the option to pay the full price up-front is there for those who can afford it. But then again, those who are less sure or a bit financially constrained can choose to take a different, more periodic payment route.
Say, for instance, that you’re planning an evening but are short of the exact garment in your wardrobe that you think is right for you. Beyond having a wide range of branded selections for you to opt from, their subscription packages offer a more affordable route for making a payment without committing to fee structures beyond your budget.
Whether you want a linen jumpsuit, double-breasted blazer, lingerie dress, or even a chic handbag to finish your ensemble, each product comes with a list of details as well as various financing options that you can choose based on what works for you.
Products are rentable for three or six months, with the price tag for each increasing time period becoming more affordable. At the end of each period, you have the option to buy the dress or handbag if you’re interested and find it affordable.
If not, you can simply choose a different product or renew your subscription. If you choose a longer rent period because the pricing is favorable, you can take advantage by turning up to more events simply as an excuse to flaunt your top-notch investment opportunity. And if you’re not interested, returns are free.
On the store website, products bought through subscription payment packages are listed as “pre-owned”. In turn, the advanced search mechanism allows users to sort through items based on whether they are interested in brand new, second-hand, or special event garments.
The great thing about this service is that you can gift rented clothes to a friend or someone close who is otherwise not interested in spending hundreds on designer apparel. The entire business model is flexible, customer-oriented, and a prime example of how a payment system reliant on recurring fees is excellent for business.
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As mentioned earlier, eCommerce subscription payment models are becoming ever popular, both among buyers and sellers. The reason behind this popularity lies in some of the significant benefits that it offers, including the following.
We’ve already alluded to this, and indeed the core appeal of subscription-based services lies in the ease of implementing, managing, and availing them. And this remains true for buyers and sellers alike.
For clients, pre-paid subscriptions free them of having to worry about payment everytime a service requires what feels like immediate renewal. Even if a package is nearing expiration, a simple automated notification is there to remind them to pay from the gateway of their choice.
Whatever they are buying or paying for becomes available with minimal effort and with the utmost convenience in mind. The choice to change payment methods, cancel orders, and choose from various tiers also makes it easy to select schemes as appropriate.
On the business owner’s side, the ability to accept fees in intervals helps to make it more controllable, automated, lightning fast, and free of late payments and other drawbacks of traditional compensation models.
With such incredible, long-term convenience and options, customers that find subscription payment-based services satisfying will likely stick with their choice. This gives businesses the opportunity to further their marketing and incentivize them to stay through promotions, discounts, free trials, and other tantalizing offers.
Online businesses that are able to boost customer experience tend to garner more traffic, better conversions, and a loyal following of customers. This in turn grants longevity to their services and makes for a more sustainable source of revenue.
After landing consumers through an initial offer, we know that businesses can retain their interest by fulfilling their end of the deal. After being successful, however, they can offer customers more than what they are already getting by convincing them to upgrade their subscription.
Not only does this allow the buyers to get more out of the deal, but the sellers can take this opportunity to boost their most coveted goods and services. As more customers agree to higher tiers of subscriptions, the company achieves a boost in revenue.
The ability to calculate payments in advance is another aspect of why customers are more inclined towards some subscription-based payment models.
For that same reason, sellers can determine their profit margins ahead of time and manage their business structure, inventory, and promotional campaigns ahead of time. So, on top of guaranteeing revenue, this scheme makes it more tangible and measurable.
With automated messaging and transactions that achieve completion through your mobile, e-commerce subscriptions make shopping much quicker. But also, it reduces the need for manual oversight and bookkeeping across the supply chain side of things.
Other than saving immense amounts of time, companies that adopt these measures also end up shedding the costs of running their business. By cutting expenses while boosting revenues and offering the time to get everything in order, recurring payment methods offer flexibility as well as monetary incentives to enterprises.
Best Practices for ECommerce Subscription-Based Services
As we mentioned earlier, some solutions for integrating subscriptions to your online store or service website are better than others. But while you’re entitled to your choice, it is important that you make it informed and think things through.
Simply having a mechanism for allowing subscriptions grants a financial, competitive, and logistical edge. But with something this state-of-the-art and promising, it is important to ensure that you cover all your bases when executing such a convenience.
The loss or theft of sensitive personal or financial information is one of the key reasons why many people fail to engage with online services to begin with. While that’s a reasonable approach, businesses should offer a secure transaction pathway so that clients have no such issues with subscription payments.
Different people use different payment gateways for reasons that might make sense only to them. In any case, your job as a service provider is to accommodate as many gateway users as possible in order to cover your bases. That includes the main ones like PayPal or Amazon pay as well as obscure examples like Bambora, RedSys, and Square.
When capitalizing on the ease of users to boost your revenue, it is important that you clearly state the terms of each payment clearly from the start. This means getting rid of hidden fees and disclosing added fees, taxes, interests, policy or price changes, and other things that buyers should know about before agreeing to pay.
Most people avail e-commerce subscriptions for goods and services on a monthly or yearly basis. You need to give people as many easily affordable options in this regard, along with discounts, free cancellations, and no-strings attached services that prioritize their needs. As long as they’re satisfied, your profits will be a guarantee.
As time has passed, the number of customers that availed services and goods through subscriptions has only risen. This tends to be even more the case at times when people cannot leave their residence in order to head to the market or contact a service physically.
On that note, it seems that on top of being lucrative and convenient, services that offer subscription fees are indeed the future of viable e-commerce strategies. That, of course, is the reason why more and more companies are adopting it as part of their business model.
As a result, those that fail to offer their services to customers, especially online, through recurring payment models will be at a competitive disadvantage.
So, for those in e-commerce, subscription payment models as an area worth capitalizing in should not be a question of “if” or “why”, but “when” and “how”. And the categorical answers to those are “as soon as” and “however” possible, respectively.