It’s safe to say that these days, subscription commerce is huge. Over the last few years especially, they’ve quickly become a part of everyday life. Whether that’s watching a show on Hulu, getting your cat litter delivered each month, or weekly meal kits to make dinnertime easier.
And that’s not even including all the subscriptions we have for fun and enjoyment. At-home chocolate tastings, curated beauty boxes, wine subscriptions, murder mystery kits, and more - the list goes on and on.
If you’re not convinced by anecdotes, then here are the facts - the subscription commerce market is projected to grow from $72.91 Billion in 2021 to $120.04 Billion by the end of 2022. The impact of world events in 2020 was a key driving force behind growth in subscriptions with Recharge reporting a 46% increase in merchants on their platform from 2019 to 2020. This kickstarted a subscription boom that carried over into 2021 and 2022 with long-term, sustainable growth. More than 54% of online shoppers are subscribed to some kind of subscription box service, and 85% of US consumers are signed up for a subscription streaming service.
Subscriptions are everywhere, and they’re here to stay. So, when a customer starts thinking about buying a gift for someone, subscriptions look like a pretty good option. They use them so much in their day-to-day life, and they’ve experienced the convenience and fun a subscription can offer.
If you’re not already offering gift subscriptions, then let’s look at why you should and how to create a great experience.
Benefits of offering gift options for subscriptions
The benefits of subscription commerce are plentiful - monthly recurring revenue, higher retention, and better customer loyalty, just to name a few. Many of these also apply to gift subscriptions, but with a few unique bonus benefits.
#1 - You’re giving your customers what they want
The growth in subscription commerce shows us that consumers love subscriptions, but there’s also data to suggest that this extends to gift subscriptions also. In a survey by Royal Mail, 60% of consumers said they’d purchased a subscription as a gift. They’re also growing in popularity with younger demographics, with 72% of 18-to-24 year olds said they had purchased a subscription as a gift. They’re an easy, fun gift that customers want to buy. If you offer other gifting products in your store, and you offer subscriptions, then it’s time to give your customers what they want and offer gift subscriptions.
#2 - Gift subscriptions make for a better customer experience for gift buyers
Gifts and gifting are a huge part of ecommerce. There’s a reason the industry places so much importance on preparing for Black Friday and the holidays. These key periods make for a big boost in sales, and it’s because customers are out in force finding those perfect gifts. That being said, gifts aren’t just for Christmas - between other gifting holidays and occasions, gifting is a year-round opportunity.
It does however come with some unique challenges, for example if a customer is purchasing a product for someone else and they don’t have much knowledge on the category. Or if they’re buying something at the last minute, or they’re just not sure what to buy, they just know they want something from your store and don’t want a gift card. That’s where options like gift subscriptions are going to be of huge benefit; you’re increasing the number of easy, high quality gifting options available and solving those common gifting issues. This makes for a much better customer experience, leading to better possibility for retention and positive reviews.
#3 - They boost acquisition and retention with gift recipients
Two of the biggest challenges in ecommerce are acquiring customers, and retaining them. Subscriptions in general are a great way to tackle both in their own way. They allow new customers to try out some products possibly at a reduced price rather than spending more on a one-off order, and they build retention as you have a customer base with recurring payments. Gift subscriptions go one step further in both acquisition and retention.
With gift subscriptions, you have two customers involved that you can impress with your customer experience - the buyer, and the recipient. The buyer will be judging your experience based on how easy it is to purchase the gift, and that includes what options you have. You could just have subscriptions and they can purchase a gift card, or a subscription with the recipient's details, but this makes the process more complicated especially if they’re unfamiliar with your products or category. Having a subscription option that’s tailored specifically to gifting with information clearly laid out, different subscription lengths, and is easy to purchase and send will make for an experience that will delight the gift buyer.
The recipient may not have heard of your brand before, and the gift subscription then acts as a paid-for acquisition and retention opportunity. The gift buyer clearly believes they’d like it, so there’s a strong chance that you’ll be sending the subscription to a highly engaged and interested customer. The more you do during the gifted period to prove the value of your subscription, the more likely they’ll be to carry it forward increasing your subscriber base and recurring revenue.
#4 - Better overall return on gift purchases
The audience for gift buyers is diverse - they may have a lot of product knowledge, or very little. They may be an existing customer, or brand new to your store. Whatever the case, gift purchases can often be one-off orders just by nature of someone buying it for someone else. Whilst these one-off orders do hold retention potential, unless they were given a gift card it can be difficult to reach the gift recipient who is often the more likely party to make a future purchase.
With gift subscriptions, there's the potential for that one-off purchase from the buyer to become a long-standing subscription membership for the recipient. Especially during the holiday season when you put so much resource into growing gift sales, it makes sense to do more to increase the return and benefit you see from these orders. Instead of a downturn in sales in January, you can focus on encouraging those recipients to carry forward their subscription.
How to create a great gift subscription experience
There’s more strategy to gift subscriptions than simply adding a gift card labeled “gift subscription” or duplicating the product page for your existing subscription service. You need to consider what the experience looks like for both the buyer and the recipient, and what you should improve throughout it.
For buyers
Make it really easy to gift a subscription
Gifting a subscription can be…tricky. Oftentimes, the customer has to purchase a subscription as normal but then input the details for the recipient. However, in that scenario, they may not know the recipient’s exact details, or they don’t want the first box to arrive right away. That’s why it’s essential to create a purchasing process that’s exclusive to gifts, that takes these issues into account. For example, using Govalo the gift subscription is sent directly to the recipient’s inbox and they fill in their details and take care of the account management. This is especially important if there’s an onboarding process for your subscriptions like a quiz flow to determine preferences. By streamlining the process for the buyer, you leave little room for friction on their end or that of their recipient.
Create a gift subscription landing page
Your site is likely geared toward your usual customers, not those looking for gifts. Maybe this changes a little around the holidays, but generally your content will be speaking to your target audience. That can make it a bit more difficult for gift buyers, as they may require additional knowledge or insight into your products and how gifted subscriptions actually work. Create a landing page that speaks to these topics, explaining the different options available for gifts, how the gifting process works, and any reviews from subscribers who received a gift. It will have added benefits for your store’s SEO and in convincing the customer to purchase a subscription.
Offer multiple subscription options
Customers have all different needs, wants, and budgets. The same is true for those looking for gifts. That’s why it’s important to offer a few different options tailored to gift buyers. That might be offering a one-off gift box, alongside 3, 6, and 12 month subscriptions. You can encourage them to purchase a longer subscription by demonstrating the benefits of doing so - a cost saving, bonus items, etc. Subscriptions are all about convenience and flexibility, so you should apply that ethos to gifts also.
Include in gift guides and promote during key periods
When customers go into their gift researching phase, they’re likely looking at products. That is, before they hit those common issues we all face when gifting. They start with products, then can’t decide or don’t know what their recipient already owns. So, they look for gift ideas from the brand they’re thinking of buying from. It’s important that when they do this, your subscription is promoted as a great option. Include it in gift guides and any temporary collections or gift idea landing pages, as well as promoting it as part of your usual promotional plans for gifts.
For gift recipients
Create a simple, engaging onboarding experience
Whether a customer is new to your brand, or just new to your subscriptions, it’s important to create an onboarding experience that gives them a positive first impression. This means tailoring it to suit the fact that they’ve received it as a gift.
Start with the process of setting up their account - make this simple, and straightforward for them. No one likes to get a gift that feels like a chore, so the less effort from the recipient the better. Consider using a quiz flow to right away understand their preferences and familiarity with your brand. You can ask them if they’ve tried your brand before, any similar products they’ve tried in the past, their likes and dislikes, and anything else relevant to their subscription. This will give you some really great data with which you can personalize their experience.
Offer clear, flexible subscription management
Great subscriptions consider the changing needs of their subscribers. They’re meant to be convenient, so make sure this is the case for those subscribers who signed up after receiving a gift. Start by making sure account management is straightforward and clear, this means no options hidden away. Give the subscriber as much flexibility as possible once they activate their subscription - adding one-off products to their box, changing dates, etc.
Part of the subscription management will be ensuring that the subscription is relevant to the subscriber with every delivery. Do regular check-ins after each delivery, asking the subscriber to rate the products they received, and swap out any they weren’t so sure about.
Have a plan for when the subscription is close to ending
When the gifted period is coming to an end, you want to do all you can to retain that subscriber. Create an automated email flow that’s triggered from the moment the first delivery is shipped. It should be specific to the order being part of a gift subscription, so focussing on introducing your brand, talking about the products they’re receiving, and mentioning that you hope they enjoy their gift.
Add more emails into the flow that are sent throughout the gifted period - creating a separate flow for one-off boxes, then 3 months and so on depending on the options you offer to ensure they get a steady stream of content relevant to their subscription. When the subscription is coming to a close, you should then let them know how to carry it forward using their own payment details. Tailor these emails using the data you gathered during onboarding; you could even offer a small incentive such as a bonus product selected just for them based on their preferences.
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Gifting and subscriptions are two of the biggest areas of opportunity in ecommerce, with huge potential for merchants willing to put the effort into combining both. Gift subscriptions have the power to massively improve customer experience for those customers on the hunt for a great gift, as well as boosting retention, promoting your subscription service, and introducing your brand to new customers. Crafting the right experience is essential, and if you get it right you’ll have a gift product that’s primed to make a positive impact on your business.