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September 22, 2021

Gifting subscriptions to grow your sales: ecommerce strategies for merchants

Gifting Subsctiptions

by

Scott Meiklejonn, Recharge Payments

As we reach the end of summer, Black Friday and Cyber Monday (BFCM) should be top of mind for businesses looking to prepare themselves for the busiest time of the year for online sales. As you’re looking over your inventory and planning out which products to offer as gifts or discounts to share, have you considered the gift that keeps on giving? Let’s dive into gifting subscriptions. 

Benefits of subscriptions 

First, a quick overview of why subscriptions are so valuable for your ecommerce business. Right up front, implementing subscriptions gives you predictable revenue, reduced churn, and higher average order values. You turn one-time purchases into long-term customer relationships (more on this relational over transactional commerce later). 

Our data shows that subscriptions allow you to foster ongoing relationships with your customers that keep them coming back, with the majority of consumers (60%) keeping the same subscription for over a year. 

What’s more, the best brands cultivate a sense of community with their most loyal customers who become an engaged hub of vocal, passionate brand advocates (which businesses can leverage for UGC and future product advising).

The subscription economy is also booming, predicted to grow to nearly $500 billion by 2025.

And if you’re thinking you can’t offer subscription boxes with your business—well, look no further than the fastest growing subscription category, membership subscriptions, which virtually everyone can support (if it’s working for Netflix, it can work for you too).

(Access/membership is the fastest-growing subscription model, comprising 13% of the market)

Expand your market reach with subscription gifting options

Offering and specifically promoting “subscription gifts” is a phenomenal way to bring more traffic into your store when you’re advertising ahead of BF/CM. Here’s a personal anecdote to explain that further. 

For my niece’s first birthday, I wanted to buy her something meaningful that she would actually enjoy (or that my sister would find valuable). 

She didn’t need another stuffed animal or children’s book (or light up toy with a parent-torturing repetitive sound effect). I wanted something more unique and beneficial to her growing mind.

Which is why I decided to gift my niece and sister a subscription to Lovevery, creators of stage-based play kits which are designed to support children’s learning. 

Now let me say upfront, I’m not the target audience for Lovevery. I’m not married, and I don’t have kids. But I’d heard the rave reviews from parents and knew how much care and thought goes into their products. So in a few short clicks, I had purchased the subscription and had it set to ship out to my sister’s address.

The Lovevery Play Kit was a total hit. My sister was hooked after the first two boxes and has kept the subscription going herself. The surprise-and-delight factor of looking forward to the latest curated subscription package (delivered on a regular cadence of their choosing) and filled with valuable play products turned out to be so much more impactful than an impersonal toy from the store (Best Uncle Ever status achieved). 

 

It would have been easy for me, or someone else in my position who doesn’t have kids, to never consider Lovevery as a brand I’d purchase a great gift from online, but when viewed through the lens of purchasing a subscription for someone else you widen your top of funnel. 

The important thing is that you showcase to customers on your website the opportunity to gift a subscription. Just as important, the best subscription boxes and programs outline why their subscriptions are so beneficial.

Let’s say you know your partner has a real sweet tooth. Are you more inclined to purchase a gift subscription from Candy Club R Us if their copy says:

“The perfect gift for your SWEETheart this season! Save 15% and get access to exclusive flavors by purchasing a monthly subscription to our curated selection candy box subscription!”

Versus:

“Purchase our subscription box filled with candy.”

I mean… both candy subscriptions would make great gifts, who’s kidding who? It’s a subscription box filled with candy. But I’d be hard pressed to believe more people wouldn’t click on the first product description. 

The lesson? Make sure the value proposition for your subscription program is clear and concise or else you’ll have a hard time enticing anyone to opt in for it. Sharing the cost-benefit, the convenience, the order frequency flexibility (bi-weekly, a monthly box, or choose your own personal style for delivery) — who can say no to a great deal?

Embrace holiday-themed subscription boxes

Don’t be a scrooge and half-heartedly offer a couple of discounts on some of your popular products. Embrace the holiday season and optimise your products to be themed for gifting! 

The holidays and gift shopping are tough on everyone, so make it easy for your customers to find and purchase gift subscriptions (“Perfect for that special wine lover in your life” or “The best gift for Dad this holiday”).

Here at Recharge, we recently had Brock Cady, co-founder of Ballsy, on our podcast, Hit Subscribe. Ballsy creates grooming products for men,, and Brock explained how they have big holiday sales because they market products specifically for the gifting segment. With themed boxes for the winter seasons (“Keep your jewels jolly”) or their Valentine’s themed box (“I’m nuts about you”) they embrace their tongue-in-cheek brand tone and lean into the holidays.

 

 

Playing up the exclusivity of gifting season products is another technique to build excitement around the holidays and give your brand some cachet. 

Look at the monopoly Starbucks seems to have on the “Pumpkin Spice” flavor once the summer ends—or their iconic winter red cups. Embrace your creative side and look for ways to build opportunities for seasonal subscription gifting into your brand strategy. 

The gift is in the [subscription box] giving

The best part about subscription brands and gifting is getting two birds with one stone. The nature of selling a gifted subscription results in two people joining your brand’s growing community. Here’s where we get back into relational commerce over transactional commerce.

Your product isn’t purchased and enjoyed as a solo experience, it’s bought and shared. That gift becomes an extension of their interpersonal relationship. You’re creating a fan out of the buyer and the receiver, which will help the awareness around your brand grow and grow. 

At Recharge, we’re big believers in turning transactions into relationships. Letting your subscription products be a part of people’s relationships is a wonderful opportunity to provide.

Verve Coffee Roasters gives you the opportunity to do so right off the hop when looking to purchase a java subscription for the coffee lover in your life.  

 

 

After a quick quiz helps you decide how much coffee, the specific beans, the specific ground, the cadence of delivery, and how long you’d like to purchase their program for, you’re even able to provide a note to the gift recipient.

 

Gift Subscription

 

Easy to find, smooth to navigate, and personalized touch at the very end: a perfect (and delicious, in this caffeine addict’s humble opinion) gift offering. 

Treat yourself

Listen, the whole start to the 2020s decade hasn’t been a breeze. So I’m here to declare that you deserve to buy yourself that gift you’ve been thinking about (and I refuse to be swayed on this sentiment).

What’s more, your customers deserve some self-pampering and a gift of their own choosing.  So give them that chance around the holidays and bring in new customers to your subscription program by offering a holiday-themed discount (even if you’re taking a loss on the first order). That may sound a little daunting, but let me explain.

Though it can sound a little counterintuitive to offer less for the first box of your subscription products to make more later, the benefits for a brand with a healthy subscription program outway the loss up front, The return of high AOVs, repeat transactions, and valuable customer data of a subscriber allows some subscription programs to function as a loss leader. Just make sure you’ve got retention strategies in place to combat any churn—and then, the more subscribers, the merrier. 

And I’m serious about getting that gift you’ve been eyeing. You deserve it.

About Recharge

Recharge is the leading subscription payments solution, helping ecommerce merchants of all sizes launch and scale subscription offerings. Recharge’s subscription billing and payment management solutions are designed to help merchants grow by increasing revenue and customer lifetime value while reducing operating costs and churn. Today, Recharge powers subscriptions for more than 35 million subscribers across 15,000 merchants, including fast-growing brands such as Billie, LOLA, Harry’s, Oatly, OLIPOP, and Hubble. Recharge is a remote-first company with more than 300 team members across 10 countries. For more information, visit https://rechargepayments.com/