Why Subscriptions will be key to ANZ brands driving revenue | Yotpo

Last updated on April 22, 2024

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Apeksha Rao
Content Marketing ANZ
April 7th, 2024 | 4 minutes read

With customer acquisition costs skyrocketing, the need to double down on retention strategies has never been greater – and brands right across the world are finding an answer in Subscriptions. So much so, that by the end of 2023, 75% of D2C brands globally were offering subscription products. While the U.S. is leading the charge here, there’s no reason why more brands in Australia and New Zealand can’t use Subscriptions to spearhead their retention efforts — driving revenue and increasing customer lifetime value. You only need to look as far as men’s skincare brand Patricks, natural supplements co. Two Islands, or beverage maker Remedy Drinks for inspiration. 

Projected to be a $450 billion market by 2025, here’s how Subscriptions can help Antipodean brands grow revenue 5-8x faster.

Increased AOV
Subscriptions allow brands to upsell and cross-sell more successfully with data-driven recommendations. For food brand Ripple Foods taking the time to craft customised selling plans that incentivise customers to embrace subscriptions has yielded great results. On average, their subscribers spend 20% more on orders than non-subscribers.

“We wanted a subscription service that integrated seamlessly with Yotpo’s loyalty and reviews. In under 9 months, 30% of our sales, were coming from Subscriptions” says Chelsie Arizvu, Director of eCommerce at Ripple Foods.

Higher repeat purchases
By offering customers convenience and consistency, subscriptions unlocks a steady stream of recurring income as the teams at Jill & Ally discovered. While they kept putting off subscriptions believing it to be a heavy and costly lift for their web team, pulling the trigger on Yotpo Subscriptions led to the fashion brand increasing their return customer rate by 100%.

Increased gross profit margins
Across industries, brands have also been able to successfully lower the cost of distribution and boost direct revenue, which they have been able to funnel back into their operations. Supplements brand UMZU saw Subscriptions drive 79% of their total revenue, which is a compelling stat.

UMZU

Better forecasting and inventory management
Subscriptions also allows businesses to get greater control over their supply and demand, enabling them to plan effectively and reduce wastage. Take supplements brand Elderberry & Co. for instance, who reported a 52% reduction in their monthly costs since switching to Yotpo subscriptions.

The Elderberry Co. founder, Jenny Watson

Reduced churn
Building flexibility into a subscriptions program and empowering customers to modify their subscriptions anytime, fosters a sense of trust and reduces the likelihood of cancelling. Several brands have found this to be the case, from plant-based beverage brand Kiki Milk who recently decreased their churn rate by 30% to healthy snack brand Probar, for whom this number was closer to 41%. Closer home, men’s grooming brand Patricks was able to drop their churn rate by 29% and significantly boost their retention metrics since implementing Yotpo Subscriptions. 

Patricks mock up

Amplifying recurring revenue and LTV with Yotpo Subscriptions’ synergies

Using Yotpo’s SMS and Loyalty in tandem with Subscriptions unlocks the ability to market with greater precision and personalisation, leading to increased customer satisfaction and loyalty. 

Subscriptions and Loyalty

Using Yotpo Subscriptions and Loyalty together allows brands to be far more compelling with their offerings. The ability to redeem points with one click and refer friends allows brands to deepen their connection with customers. But the ability to offer free product redemption on subscriptions is a great way to boost loyalty participation as it lets shoppers earn and redeem points on subscriptions. This is only possible with Yotpo subscriptions. Here’s a quick look at the possibilities with our Subscriptions and Loyalty synergy:

  • Free product redemption on subscriptions – Yotpo is the only provider offering this
  • One-click points redemption
  • Refer-a-friend 

Learn how Makesey leveraged Yotpo’s Loyalty and Subscriptions synergy to drive an 88% repeat purchase rate among redeemers.

Subscriptions and SMS

The channel intimacy offered by SMS lends itself perfectly to the overarching goals of a brand’s subscription program. The synergy between subscriptions and SMS enables brands to better target customers with timely messaging and grow revenue. And here’s a quick look at the possibilities with our Subscriptions and SMS synergy:

  • Opt-in campaigns to grow subscriber base and boost slow product sales
  • Winback SMS campaigns for cancelled Subscription customers
  • Ability to manage and adjust subscriptions easily via SMS

Read how Tenderly Rooted achieved a 39x ROI on subscriptions campaigns via SMS.

Tenderly Rooted SMS subscription text

To explore how you can increase revenue and retention for your brand, talk to our local team about a personalised demo.