Adoption of Hybrid Commerce to Better Serve Customers
In addition to being highly successful, innovative subscription businesses, what is another thing that BarkBox, FabFitFun, and Speedo all have in common? Answer: they all combine subscriptions with one-time offerings.
This is called “hybrid commerce,” and it refers to businesses that have both a recurring line-of-business and sell one-time items. Regardless of whether the company began with a focus on one-time sales and then added a subscription component such as Speedo did—or if it started out as a subscription business and then added one-time items—these companies use hybrid commerce to increase revenue, customer engagement, and market share.
Because at the end of the day, the more options you give to customers and subscribers to interact with your business, the greater your opportunity to increase customer loyalty, decrease churn, and earn revenue. And, with global retail sales projected to reach $27.73 trillion in 2020, brands that have a competitive advantage are the ones that will most easily survive the unavoidable onslaught of competition. Add to that the fact that 71% of adults in 12 countries use some kind of subscription service, and 74% believe consumers will choose to subscribe rather than own in the future—having a subscription offering certainly seems like a smart play.
For businesses focused on subscriptions, it’s probably easy to identify one-time products or services that complement your core offerings. BarkBox sells dog toys as add-ons to their monthly box. Loot Crate sells gift subscriptions (another terrific subscriber acquisition tactic) which are a one-time rather than renewing purchase. A company like Rocksbox might also sell jewelry boxes, to store the designer jewelry their subscribers receive every month. A monthly tea subscription might also sell teapots or a candy subscription could offer candy dishes. The options are limited only by your imagination.
The other approach is to add a subscription that adds value to the one-time product or service you sell. Speedo (which specializes in swimwear for competitive swimmers) created the Speedo On app which lets users log their swims and view their swim data instantly, along with additional features available to paid subscribers. A subscription web streaming service might sell digital video cameras and tripods. An IoT device might use a subscription to provide access to the device’s data.
The point is that hybrid commerce is very likely to be the way of the future for many companies as the world of e-commerce and the purchasing patterns of both businesses and consumers continue to change and evolve.
Hybrid commerce is just one topic in Recurly’s recent guide, “Subscription Predictions for 2020 and Beyond.” Get your copy today and see what other emerging trends you need to know about.