Future-fit ecommerce: A complete guide to growing health and wellness subscriptions in 2023 PDF Free Download
1 / 33
/33
100%
A complete guide to
growing health and wellness
subscriptions in 2023
Future-fit
ecommerce
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 2023. | 03
A complete guide to
growing health and wellness
subscriptions in 2023
Future-fit
ecommerce
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 tness 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.
Healthy growth:
Success in numbers
© Bold Commerce 2023. | 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 2023. | 05
In a world where the competition regularly claims to be
number one, it can be difcult to build and differentiate
your own identity. Difcult, 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 nding 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 difcult all the time. Remaining
focused on all three of these areas will create an
advantage for your subscription venture.
Subscription
modeling that delivers
© Bold Commerce 2023. | 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
Create unique
subscription
oerings
Convert
customers
Maximize
customer
lifetime
value
© Bold Commerce 2023. | 07
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.
Benets of a replenishment subscriptaion 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 fulllment.
• 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.
1. Replenishment (aka subscribe and save)
Subscription modeling that delivers
© Bold Commerce 2023. | 08
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.
“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
© Bold Commerce 2023. | 09
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 benets 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.
2. Access
Subscription modeling that delivers
© Bold Commerce 2023. | 10
Example: Boost. This vitamin brand leverages Bold
Subscriptions, giving members the opportunity to
be rst 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.
“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
© Bold Commerce 2023. | 11
Curation is the most popular subscription type with 55% of
subscriptions being classied 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.
Benets 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.
3. Curation
Subscription modeling that delivers
© Bold Commerce 2023. | 12
The 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 benet
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
rst-party data.”
Leslie Wong,
Partner Marketing Manager at marketing platform
Klaviyo
Example: 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 2023. | 14
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
benets 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, benets, and loyalty programs
to attract and retain subscribers.
Create unique
subscription experiences
© Bold Commerce 2023. | 15
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 nd 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.
“The subscription offer can happen
anytime, anywhere in an online store,
and even physically in-store too.”
Jay Myers,
Co-founder of Bold Commerce
© Bold Commerce 2023. | 16
Personalized products and services can remind
shoppers how committed a brand can be to recognizing
their needs. Effective personalization often starts with
collecting prole information up front.
Forward-thinking brands can leverage the exibility of
robust webhooks and APIs in order to build an effective
onboarding ow to capture customer data. Customers
appreciate their input having inuence over how their
orders are designed, which is another step in deepening
the shopper-brand relationship.
Making it personal
Create unique subscription experiences
© Bold Commerce 2023. | 17
Example: Gainful. The protein powder provider’s
onboarding for subscribers begins with a quiz,
asking questions about weight, goal weight,
and tness 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 2023. | 18
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.
Building community
“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
Create unique subscription experiences
© Bold Commerce 2023. | 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 tness-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 2023. | 20
The path to subscription success includes a seamless,
frictionless checkout experience. It begins with a unied
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
ows and upselling and cross selling during or post checkout.
With the benet 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 exibility 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.
Convert customers
at checkout
© Bold Commerce 2023. | 21
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 rst order.
Flexibility is crucial to Hubble’s strategy as they allow subscribers to
modify their subscriptions at any time, from any touchpoint.
“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
© Bold Commerce 2023. | 22
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 ows 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.
Always be innovating
“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
Convert customers at checkout
© Bold Commerce 2023. | 23
Churn is a painful, but inevitable retailer reality. Savvy,
customer-centric brands learn from their churn rates, and
nd 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 nding value in high-performing apps that enable them
to customize their subscriptions portals, manage upsells and
downgrades, and launch compelling loyalty programs.
Maximize
customer value
© Bold Commerce 2023. | 24
A brand’s online subscription portal can’t be treated as
just another landing page. Its design and ow 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.
Prepping the portal, earning
more revenue per customer
Maximize customer value
© Bold Commerce 2023. | 25
Example: 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 avor
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 2023. | 26
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 rst 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.
Loyalty matters
Maximize customer value
“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 ailing when they could
be ne-tuning.”
Jay Myers,
Co-founder of Bold Commerce
© Bold Commerce 2023. | 27
Once 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 benets
designed to help consumers more fully
and easily achieve the goal that brought
them to the brand in the rst place.”
Robbie Kellman Baxter,
Author of The Membership Economy
© Bold Commerce 2023. | 28
Example: Apple Fitness Plus. Requiring an Apple Watch and another
Apple device such as an iPhone, Fitness Plus subscribers can watch
tutorial tness videos and track their progress reaching tness goals.
A monthly fee unlocks the seamless integration between Apple
devices, one of the key draws of Apple’s online tness 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 2023. | 29
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.
Seamlessly managing complex
payment challenges
Maximize customer value
© Bold Commerce 2023. | 30
Example: 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
efciently.
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, lled 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 2023. | 31
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 exibility to transform your
subscription program into a key protability 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.
Conclusion:
Successful subscription programs
engage consumers across the
entire customer journey
© Bold Commerce 2023. | 32
As 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 exible 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
take your subscription to the next level.
Contact us today
© Bold Commerce 2023. | 33
