Greg Alvo, founder and CEO, Ordergroove Inc.
If you were to take a snapshot of the average American family in 2020, you’d likely find a family of four stuck at home trying to manage the new normal of work, school and play, from a single isolated location.
That meant managing work from home for mom and dad while also keeping their family happy, healthy, and safe. Meanwhile, the kids adapted to their first remote school lessons. And don’t forget the new furry friend that an estimated 11.38 million U.S. households welcomed home during the pandemic.
With this new normal came a slew of new needs, including a monthly supply of pet products, an increased necessity for household essentials, and perhaps most important to everyone’s well-being, a self-care routine. At the same time, consumers looked for safe, reliable ways to source these products on an ongoing basis.
In searching for ways to consistently receive these products from the safety of their own homes, many consumers turned to ecommerce – specifically subscription offerings. As a result, subscription programs saw massive growth during COVID-19. According to eMarketer, subscription commerce sales saw 41% growth in 2020, and it expects the market to reach $27.67 billion this year. Our merchant data found that the pet supply, household product and beauty categories draw the biggest demand for subscriptions.
Pet supplies are essential for keeping new four-legged friends happy
Pet parents often go to great lengths to ensure their four-legged children are well taken care of. For many, online subscriptions served as a reliable and convenient method to receive regular supplies such as cat litter or dog treats. In fact, in 2020, subscriptions for pet supplies increased by 340% YoY for our merchants.
When it comes to the pet supplies you regularly order—like that 25-pound bag of specialty, grain-free dog food your vet insists your dog needs—subscription programs can offer a sense of predictability and convenience. With subscriptions, pet parents don’t have to worry about reaching for a scoop of dog food, only to realize they’re at the bottom of the bag and the local pet store doesn’t carry that all-important specialty food your dog eats. Subscriptions eliminate this friction – consumers no longer need to remember to buy more pet food before it runs out. And just as important, no one must schlep that bulky bag of food home because it’s automatically delivered to your door exactly when needed.
Household product demand increased as remote life took hold
With consumers spending most of their time at home, subscriptions for household products soared. From everyday goods like hand soap or disinfectant wipes to comfort items such as candles, subscriptions became a safe and convenient way to shop. According to our data, subscription enrollment for these types of products increased 288% in 2020 versus 2019.
The household product category saw increased growth due to the flexibility and control subscriptions provide consumers. Not only are items delivered at a regular cadence, but a consumer can easily pause orders instead of canceling a subscription altogether. That way, if fragrance fanatics find their apartments overflowing with candles they haven’t had time to burn, they can take a short break from receiving any new orders.
In addition, consumers can easily modify the delivery dates of their orders. For example, if a family is going out of town and won’t be home, they can request a new delivery date and receive the order once they’ve returned. As their needs continue to change – even monthly – merchants can demonstrate their value by offering these customizable subscriptions.
Beauty gained popularity as consumers turned to new self-care and wellness routines
Last year’s stay-at-home orders disrupted daily routines, causing consumers to turn to self-care to maintain some sense of normalcy. As a result, shoppers sought out beauty and wellness products, from cleansing serums to cures for “maskne” our beauty merchants saw a 117% increase in subscriptions in 2020 compared to the prior year.
Providing a tailored online experience can be challenging for beauty merchants, as needs are hyper-personal according to ingredients, skin tone, scent and more. For example, the daily routine of a dad growing a pandemic beard and a teenager with acne-prone skin looks very different. Given that every shopper’s unique needs vary, merchants have found success in offering a personalized experience by pairing subscriptions with guided selling and loyalty programs.
Guided selling, for example, is often executed through a chat box or a question-and-answer experience, which helps customers quickly find the best products for their needs. By either speaking to a consultant online or narrowing down products through a series of questions, shoppers receive personalized recommendations for their subscriptions that can help them feel confident in their purchase decision and their new routine. Once complete, shoppers now have a regular, recurring order that satisfies their needs—and a package in the mail to look forward to. What’s more, loyalty programs that are points-based or tiered can incentivize a shopper to continue a relationship with a brand.
Subscriptions create continuing opportunities for customer loyalty and growth
The average American family’s needs continue to change, as many parents are returning to the office and most kids are now attending school in person. However, consumers formed new shopping habits in 2020. They will still expect subscriptions to deliver on these needs, creating ongoing opportunities for merchants to build loyalty and grow their customer base.
Regardless of the vertical, subscription programs are a tool for merchants to establish an essential role in a customer’s life. Merchants must move beyond the fundamentals of a simple subscription offering to improve relationships and better serve their customers. Customers are not one-size-fits-all, and their ecommerce experiences should reflect that. By offering reliable, convenient and customizable subscription programs that customers can control, merchants will ultimately drive loyalty within their brand.
Ordergroove Inc. provides software that powers subscription programs for D2C brands and retailers.
Favorite