Future-fit ecommerce A complete guide to growing health and wellness subscriptions in 2021
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Future-fit ecommerce A complete guide to growing health and wellness subscriptions in 2021
Table of contents
Healthy growth:
Success in numbers 4
Subscription modeling
that delivers 6
1. Replenishment
2. Subscription Builder
3. Curation
Create unique
subscription experiences 15
Convert customers
at checkout 21
Maximize
customer value 24
Conclusion:
Relationship is everything
32
© Bold Commerce 2021. | 02
Future-fit
ecommerce
A complete guide
to growing health
and wellness
subscriptions in 2021
Ecommerce subscriptions are fast becoming a primary business
model and growth driver for leaders in the health and wellness
sector. And the strongest subscription models are built to engage
customers across their entire journey with a brand, from the
discovery stage, through to relationship-building, and retention.
Predictable and dependable revenue through subscriptions can
help brands propel their bottom line while also delivering customer
insights to leverage for increased brand loyalty. After all, the
deeper the interaction with the customer, the more insight you can
gain from how they interact with your brand.
© Bold Commerce 2021. | 03
Healthy growth:
Success in numbers
It’s clear ecommerce subscriptions are vital to a brand’s revenue
health. As early as 2016, ecommerce leaders saw the value in
bringing subscriptions to their customers: Between 2012 and 2016,
the sales of subscription economy businesses in the U.S. grew nine
times faster than sales of companies in the S&P 500, and more
than four times the rate of U.S. retail sales.
According to data from the Subscription Trade Association (SUBTA),
75% of organizations selling D2C will offer subscription services
by 2023.
A Bold Commerce survey of nearly 800 subscription brands found
health and fitness verticals reported experiencing monthly growth
rates of 25% or more in 2021.
It’s a trend that is only going to become more prevalent in the
coming years: the global subscription ecommerce market is
expected to reach $478 billion by 2025, enjoying a compound
annual growth rate (CAGR) of 68%, as UnivDatos Market
Insights estimates.
© Bold Commerce 2021. | 04
“If you are a brand, you need to
build a subscription model or
membership into your revenue
stream. Brands that have this
model show higher valuations,
more predictable income,
and most importantly, more
consumer loyalty.”
Christopher George,
Co-founder & Chairman of SUBTA
© Bold Commerce 2021. | 05
Subscription
modeling that delivers
In a world where the competition regularly claims to be number
one, it can be difficult to build and differentiate your own identity.
Difficult, but not impossible. Effective subscription businesses have
adopted a structure and offering that allows them to command a
large and growing share of the market.
Any attempt to establish a well-designed subscription offer has
to begin with understanding the many routes you can take. In this
comprehensive guide, you’ll learn how to overcome challenges by
finding the right subscription model that works for your brand, and
how you can not only boost visitor conversion, but also deepen
brand loyalty at every turn.
For health and wellness subscription businesses, growing the
relationship with the customer means exploring and optimizing
every step of the customer journey including:
1. Creating unique subscription experiences.
2. Integrating a seamless approach for
converting customers at checkout.
3. Ensuring customer value is maximized.
Standing out in a crowd of competitors is no easy task, and it’s
getting more difficult all the time. Remaining focused on all three of
these areas will create an advantage for your subscription venture.
© Bold Commerce 2021. | 06
In the health and wellness space in particular, it’s important to keep
the offers fresh and engaging. With many consumers experiencing
subscription fatigue due to the multiple offers already inundating
their inbox (and showing up on their front door), it’s critical to
choose the right subscription model for your products and services.
Let’s explore the three popular subscription approaches among
health and wellness brands.
Discovery Consideration Decision Checkout Retention
Maximize
Create unique Convert customer
subscription customers lifetime
offerings value
© Bold Commerce 2021. | 07
Subscription modeling that delivers
1. Replenishment (aka subscribe and save)
Replenishment subscriptions allow for the automatic purchasing
of products on an ongoing basis and subscribers save a certain
percentage on each purchase. This type is one of the simplest
models to implement and accounts for 32% of all subscription
purchases.
In fact, replenishment subscriptions boast higher retention rates
than other subscription models. As a McKinsey report cites: 45%
of those subscribing to replenishment products have subscribed
for at least one year, about 10 percentage points higher than for
curated or access subscriptions.
Benefits of a replenishment subscription model:
• Convert a transaction into a relationship with subscribe-and-
save offerings, providing convenience and savings to
customers, while increasing customer lifetime value.
• It’s a simple way to start offering your products while requiring
basic technology capabilities, and requires the least investment
in adjacent capabilities like personalization and fulfillment.
• A replenishment subscription can help you determine which
products are performing well, which can guide the expansion
of your subscription offering. In addition, this supports demand
forecasting and inventory management in your business.
© Bold Commerce 2021. | 08
“What’s unique about subscriptions in the
health and wellness space is how it’s
focused on commitments.”
Jay Myers,
Co-founder of Bold Commerce
Example: mindbodygreen. This vitamin and supplement
company needed an elegant and frictionless experience to
turn customers into members. They integrated a seamless,
customer-centric replenishment subscription model,
leveraging a subscribe and save offer. By defaulting to a
subscribe and save offer on their products, they empower
loyal customers to save on the products already a part of
their day-to-day lives.
© Bold Commerce 2021. | 09
Subscription modeling that delivers
2. Access
Beyond the basic replenishment model for subscriptions, there are
access type subscriptions that provide customers with extra value through
additional products, services, and experiences only available to subscribers.
Overall, 13% of ecommerce subscriptions fall into the access category.
Customers subscribe, and then gain access to exclusive products, services,
educational materials, and experts. Everything is highly personalized,
deepening the connection between the customer and the brand. Upselling
on higher-level tiers of access is common in this model, allowing for more
opportunities to maximize customer lifetime value.
The benefits of access model subscriptions are:
• Create personalized experiences based on the continuous
data brands receive around how customers use their
health and wellness products.
• Helps to build a community of advocates, not just customers.
• Create added perceived value for subscribers — beyond the
product which may be seen as a commodity — including VIP privileges
such as early access to new products, and faster delivery options.
• Provides the opportunity to deepen the emotional connection with
subscribers by educating customers on the lifestyle surrounding their
products and services through webinars, guided experiences and
overall increased interaction with the brand.
© Bold Commerce 2021. | 10“The health and wellness sector is well
suited for access-based subscriptions. It
provides education and interaction with
experts, early access to new products, and
tailored programs or delivery options for
VIP customers”
Jay Myers,
Co-founder of Bold Commerce
Example: Boost. This vitamin brand leverages Bold
Subscriptions, giving members the opportunity to be first to
access new products and merchandise. Also, subscribers
can learn more about vitamins through weekly tips, receive
exclusive discounts, and access 24/7 customer service —
which isn’t offered to episodic shoppers.
© Bold Commerce 2021. | 11Subscription modeling that delivers
3. Curation
Curation is the most popular subscription type with 55% of
subscriptions being classified as this model. This model delivers a
curated selection of products or services to subscribers, that are
personalized based on subscriber’s stated preferences and/or
informed by data analytics, such as purchase history.
Benefits of a curation subscription model:
• Create viral buzz for your brand by providing a
remarkable unboxing experience and a product selection
that resonates with your audience.
• Surprise and delight aspects keep subscribers engaged and
creates the opportunity to deepen the connection to the brand.
• Subscribers are willing to offer more information on their
needs and preferences, which results in more tailored
offerings. Meanwhile, brands gain valuable customer data to
better serve subscribers and deepen customer insights.
• Opportunity to negotiate with suppliers on
committed inventory quantities.
• Create a more meaningful curation experience and gain
audience extensibility through strategic partnerships and the
promotional value of their offering.
• Curation streamlines revenue and inventory forecasting by
offering a single product while giving you complete control
over the contents and costs.
© Bold Commerce 2021. | 12The challenge with curation is continuously developing attractive
perks for customers who seek novelty and variety, as subscribers
naturally expect their box to become more tailored over time. For
example, if a running-gear-and-lifestyle brand wants to retain their
customers in the long-term, they will likely not benefit from relying
on one running coach to provide the same type of tutorial video
week-to-week. Runners want to continuously improve their habits
and output, which puts the pressure on brands to curate scalable
content.
“Subscription business models are
becoming an increasingly common and
important lever in customer retention and
growing lifetime value. By engaging in a
long-term relationship with customers,
brands have the opportunity to get to
know them better and understand their
preferences through first-party data.”
Leslie Wong,
Partner Marketing Manager at marketing platform KlaviyoExample: Viome. Approaching a curated experience from
a new angle, this supplement brand asks subscribers
to complete a gut health test, which helps the brand
determine the ideal food regimen and supplements for
them.
Powered by Bold Subscriptions, Viome notes on their
website, “We offer a recommended diet for each
individual based on the function of their microbes. Viome’s
recommendations will help anyone who takes this test
maintain a healthy body weight for the long-term.”
© Bold Commerce 2021. | 14Create unique
subscription experiences
The market is getting crowded in the ecommerce subscription
space. It’s increasingly common for consumers to have
multiple subscriptions: Of the 15% of consumers who receive
subscription products, 35% subscribe to three or more services.
Drilling down into this group, 18% of men and 7% of women have
six or more subscriptions.
Intensifying competition means the subscription experience
needs to be smooth, frictionless, and offer differentiated benefits
to subscribers to keep them enrolled. Robust industry-leading
apps power the subscription offerings and give brands the
ability to craft custom subscription experiences that deliver value
and convenience while deepening the sense of belonging for
subscribers.
Brands aiming to stand out should design unique front-end
experiences that don’t follow a template model, and create a
memorable customer journey. Opting to create an attractive portal
will lead the customer through a more enticing experience and
help to build lasting relationships.
The most successful subscription brands also incorporate email
marketing, discounts, benefits, and loyalty programs to attract and
retain subscribers.
© Bold Commerce 2021. | 15“The subscription offer can happen
anytime, anywhere in an online store,
and even physically in-store too.”
Jay Myers,
Co-founder of Bold Commerce
Example: Goop. Goop’s subscription services are
customized to include aspects of both the replenishment,
and access models whereby subscribers pay a monthly
fee to receive their favorite product or kits and often enjoy
discounts and access to new products.
What makes Goop unique is the one-of-a-kind products you
can’t find at any nearby store. This reveals how specializing
in discretionary products can be enticing for brands seeking
market differentiation.
Goop dietary supplements, which are available under the
replenishment framework, have become the company’s
fastest growing revenue stream, boasting 50% year-over-
year growth.
© Bold Commerce 2021. | 16Create unique subscription experiences
Making it personal
Personalized products and services can remind shoppers how
committed a brand can be to recognizing their needs. Effective
personalization often starts with collecting profile information up
front.
Forward-thinking brands can leverage the flexibility of robust
webhooks and APIs in order to build an effective onboarding flow
to capture customer data. Customers appreciate their input having
influence over how their orders are designed, which is another
step in deepening the shopper-brand relationship.
© Bold Commerce 2021. | 17Example: Gainful. The protein powder provider’s
onboarding for subscribers begins with a quiz, asking
questions about weight, goal weight, and fitness
habits. They also asked customers to indicate any
allergies, dietary restrictions or preferences, so those
with gluten allergies, for instance, will appreciate these
considerations.
This data ensures Gainful isn’t going to provide
subscribers with generic products. Shoppers will get the
right product for their lifestyle and future goals, which
goes a long way to establish brand trust and loyalty. Bold
Subscriptions made this unique onboarding option easily
embeddable in the sign-up process.
© Bold Commerce 2021. | 18Create unique subscription experiences
Building community
In the health and wellness sector, engaging customers within
a social environment can reap many rewards. Not only will
developing a strong community of health-minded people
encourage frequent site visits, but it will reinforce to customers
that you care about their well being. When brands sustain an
authentic community of committed customers, it leads to increased
word-of-mouth and referral marketing, which drives new subscriber
growth.
“There are numerous studies that
conclude how exercising with a friend
or partner will help you see better
results, and that kind of community is
fostered through health and wellness
subscriptions. Their customers aren’t
just buying a product; they’re
buying a lifestyle.”
Jay Myers,
Co-founder of Bold Commerce
© Bold Commerce 2021. | 19“The launch of Fitbit Premium is part
of our broader strategy to diversify our
business beyond hardware, while also
delivering on our promise to provide
more personalized experiences, data and
insights to our users to help them move
more, manage stress, sleep better
and eat well.”
James Park,
Co-Founder and CEO of Fitbit
Example: Fitbit. Personalization is at the heart of what Fitbit does as a wearable
fitness-tracker brand. Acquired by Google in 2020, Fitbit offers subscription plans
with a range of perks. Members earn access to hundreds of video and audio
workouts, as well as receiving customized insights, a sleep score breakdown,
and a wellness report based on Fitbit stats.
Fitbit Premium also aims to build community, allowing members to create
challenges for other Fitbit users to join and engage with regularly.
© Bold Commerce 2021. | 20Convert customers
at checkout
The path to subscription success includes a seamless, frictionless
checkout experience. It begins with a unified checkout for one-time
purchases mixed with subscription products, and also takes into
account payment methods, delivery options (ship to home, store
pickup, etc) checkout flows and upselling and cross selling during
or post checkout. With the benefit of subscriber information and
preferences, brands have the opportunity to tailor the checkout
experience for subscribers to maximize conversion.
In addition, consumers are expanding the ways in which they shop
— online, in-store, social, even voice and SMS. These channels
provide additional opportunities for subscriptions as well, such as
sign up, purchase, and the flexibility to edit, pause, and manage
subscriptions through these expanded channels. More shoppable
moments create more opportunity for awareness, conversion and
customer retention.
For those new to subscription offers, you might want to start with
a simple incentive. Why not begin with discounts as enticement
to join the subscription? A Bold Commerce survey found that 20%
of brands who offer discounts have reported month-over-month
growth rates higher than 50%. For those brands that refrain from
offering discounts, only 14% reported the same growth rate. These
discounts don’t need to be steep, either. Discounts between 5% to
15% can support greater growth for your offering.
© Bold Commerce 2021. | 21“Brands that discount too heavily
fall into a trap of lower quality
subscribers which would lead to
a higher churn rate. I think a free
gift with purchase can pay higher
dividends than discounts in some
cases.”
Christopher George,
Co-founder & Chairman of SUBTA
Example: Hubble. Customer retention is high with brands focused on health
challenges such as maintaining optimal eyecare. Hubble leverages this loyalty
with subscription programs based on replenishment — six lenses per box
are shipped every six months, after the customer supplies the company with
prescription details. To incentivize the subscription sign up further, customers are
offered 60% off of the first order.
Flexibility is crucial to Hubble’s strategy as they allow subscribers to modify their
subscriptions at any time, from any touchpoint.
© Bold Commerce 2021. | 22Convert customers at checkout
Always be innovating
Bringing innovative thinking to the checkout experience can do
wonders to boost the visibility and adoption rates of subscriptions.
This includes experimenting with different checkout flows for
web and mobile, multiple shipping options, adding A/B testing,
and optimization to the offering. For example, you can run A/B
tests to learn which discounts attract customers who tend to stay
subscribed for longer.
Brands should give customers the ability to edit their subscriptions
anytime they like. This relationship-building with customers can
propel brands to higher growth and deeper ties to those that value
them most.
“When you are dealing in subscription
model products, as opposed to more
transactional or episodic ones, you have
an obligation both to get to know your
customer because you have to have a
relationship for a long time, and to serve
them in a way that is trustworthy.”
Robbie Kellman Baxter,
Author of The Membership Economy
© Bold Commerce 2021. | 23Maximize
customer value
Churn is a painful, but inevitable retailer reality. Savvy, customer-
centric brands learn from their churn rates, and find solutions
designed to retain customers who may have subscribed to their
offer long ago but now seem disinterested and unreachable.
According to data published by Bold Commerce, only one in 26
unhappy customers complain. The rest simply don’t return. The
number one reason why subscribers cancel is focused on the lack
of perceived value in the offer.
The higher the churn rate, the harder it can be for subscription
ecommerce brands to cover their acquisition costs and boost
their revenues.
But there are ways for brands to overcome these challenges
by finding value in high-performing apps that enable them
to customize their subscriptions portals, manage upsells and
downgrades, and launch compelling loyalty programs.
24Maximize customer value
Prepping the portal, earning
more revenue per customer
A brand’s online subscription portal can’t be treated as just another
landing page. Its design and flow has to be engaging, user friendly,
and offer customers control of their subscription.
Since 90% of ecommerce customers state they have visited their
subscription customer portal at least once since signing up, it’s
clear this destination has to be as simple and intuitive as possible.
Also, the portal gives a brand a platform to engage, grow and
retain relationships with customers. Here, new sales or video
messaging or contests can work to keep the customers coming
back to learn or engage more with the brand. That’s especially true
in the health and wellness space, due to how committed customers
can be to an access-based model offering educational posts or
instructional videos.
Once a customer is aligned with a brand, you can easily upsell
them on new products, compared to the riskier task of acquiring
new customers with marketing strategies that can’t guarantee
success.
© Bold Commerce 2021. | 25Example: Evive. This health-food retailer, leveraged Bold’s subscription portal to
allow customers to pause, edit, snooze and skip subscriptions. Flexibility anchors
this app designed to work seamlessly with Bold Checkout.
Evive customers can easily modify each month’s upcoming flavor selections.
Upselling is another strategy to employ at checkout, particularly with subscriptions.
At Evive, they created a popular upsell option where customers on the page for the
12-pack subscription can upgrade to the 24 or 36-pack and save.
© Bold Commerce 2021. | 26Maximize customer value
Loyalty matters
Successful brands know how to establish and retain the customer
relationship in health and wellness, especially considering how
crucial long-term brand loyalty is for this sector.
When ecommerce brands structure their loyalty programs to
invigorate their subscriptions service, a new door opens. Now they
can give to customers a slew of redemptions points for products,
and also offer referrers credit when their friends make their first
purchase.
These programs come with high returns, if done right. According to
a Bold Commerce survey, 57% of brands that offer loyalty programs
reported an average customer lifetime of a year or more, while
only 35% of brands without a loyalty program reported the same
average customer lifetime.
“If you have a refer-a-friend program set
up, that information has to be tracked and
analyzed deeply. Without a plan to parse
the data from subscription programs,
brands could be flailing when they could
be fine-tuning.”
Jay Myers,
Co-founder of Bold Commerce
© Bold Commerce 2021. | 27Once you launch these services, it’s more important than ever
to continue testing, iterating and approaching new products
and features with an eye towards meeting and even exceeding
customer expectations.
It’s important to note that while a rewards program is one tactic that
could be an arrow in the quiver of a brand leader, it’s important to
remain up-to-date on this shifting landscape that is surely going to
evolve within ecommerce and other markets.
“In the Membership Economy, with the rise
of subscription pricing, organizations are
moving away from points-based programs,
and toward Premium Loyalty Programs
(PLP). PLPs require an advanced payment
to join a Membership Program, and in
exchange for that upfront commitment, are
entitled to a bundle of benefits designed
to help consumers more fully and easily
achieve the goal that brought them to the
brand in the first place.”
Robbie Kellman Baxter,
Author of The Membership Economy
© Bold Commerce 2021. | 28Example: Apple Fitness Plus. Requiring an Apple Watch and another Apple device
such as an iPhone, Fitness Plus subscribers can watch tutorial fitness videos and
track their progress reaching fitness goals. A monthly fee unlocks the seamless
integration between Apple devices, one of the key draws of Apple’s online fitness
service.
It also offers intriguing in-video add-ons such as the Burn Bar, which shows
on the exercise video how the subscriber stacks up against everyone in that
particular workout.
© Bold Commerce 2021. | 29Maximize customer value
Seamlessly managing complex
payment challenges
Finally, dunning management is another area key for brands to
retain customers. Dunning management helps enterprise brands
protect their recurring revenue by automating the payment
process.
Dunning refers to collecting payment from non-paying customers,
which is often the result of credit card transactions not working
properly. The reasons are numerous, ranging from an outdated
card to the card reaching its limit. In turn, dunning then helps to
reduce involuntary churn, and save you valuable time you might
have otherwise spent following up manually.
Layering a dunning management process over the customer-
retention program combats delinquent churn. This is where
customers don’t actively leave a subscription but are passively
churning out through declined credit cards.
© Bold Commerce 2021. | 30Example: RunLocker. Running gear subscription brand RunLocker recognizes
how runners want more than high-quality sneakers; they want tips and other
products to help them run more efficiently.
Harnessing the curation model, RunLocker lets members choose their T-shirt
size, sock size and any special dietary requirements. Then their “locker” aka
box is delivered to their door, filled with products to help them “run faster and
recover quicker,” as the company says.
Jump ropes, protein bars, baseball caps, sunglasses or stretch bands are
among the products RunLocker places in those boxes, which aim to surprise
and delight their subscribers.
© Bold Commerce 2021. | 31Conclusion:
Successful subscription
programs engage
consumers across the
entire customer journey
Along the customer journey, brands have the opportunity to
capture more than just one-off transactions; they can entice
visitors with subscription programs bursting with variety,
delight, and emotion.
By curating a performance-driven, API-powered experience, you
gain the flexibility to transform your subscription program into a
key profitability driver, while building strong and meaningful
customer relationships.
The future of successful subscription programs will be brightest for
those businesses that personalize their offers and cultivate strong
relationships with their community. It’s the kind of win-win that both
brands and their subscribers will be happy to see continue.
© Bold Commerce 2021. | 32As a leader in customizable ecommerce solutions, Bold
helps over 16,000 brands power their subscriptions. Bold
Subscriptions combines out-of-the-box functionality with
powerful customization options through flexible APIs to
generate one-of-a-kind subscription experiences and tailored
customer portals. We proudly help brands build better
relationships with their customers and grow recurring revenue.
Whether you’re launching or scaling your subscription offering,
we’d love to help you reach your goals.
Book a demo to discuss how you can
Contact us today
take your subscription to the next level.
© Bold Commerce 2021. | 33You can also read
