Why Launch A Member-Only E-commerce Store?

Why Launch A Member-Only E-commerce Store?

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With so many ecommerce platforms available, starting your own online store can be quite simple. Making your first sale is very exciting. It also marks the start of great things to come.

There are a number of models you can choose from to launch your ecommerce store. All of them will require you to find your customers, convert their interest into a sale and then retain their information to market to them in the future again.

However the difference between making a sale to a one-time customer is very different to selling to a client who has bought into your brand and supports you year in and year out.

Out of all the models available to sell your goods and services online, one of the top trends in 2017 is the members-only or subscriptions based model.

How does it work?

While some stores invite customers to browse without any sign up to a newsletter, others require an email address or a subscription fee for a set period of time. The member only model requires a monthly membership fee to gain access to discounted goods or services.

The monthly membership fee is automatically renewed making it an excellent way for retailers to predict future income. However, the terms and conditions of the renewable fee must be clearly communicated to avoid any confusion.

Related: 5 Ecommerce Myths That Are Sabotaging People’s Businesses

E.g. recently launched South African sporting gear and apparel brand, Commander HQ’s charges a monthly membership fee of R50 for which members have access to all the products in their store (latest ranges as well as end of ranges) at discounted prices of between 40% and 70%.

When a member signs up they’re debited immediately and then, unless they opt out of the deal, are automatically billed monthly.

What are the benefits of this model?

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For retailers it offers far more predictability in terms of income and future revenues. It helps to smooth out demand so you manage your operations more effectively.

Knowing how many members you have means you can adjust stock levels and you also don’t risk having a pile of unsold inventory.

The benefits of tracking customer engagements translates into better customer communication and an overall improved customer experience, two key elements for a successful member-based model.

Says Carey Mol, owner of Commander HQ: “This is such a great way for us and our customer’s to benefit. We charge R50 per month which equates to two cups of coffee and results in, for example, R1326 discount off our Columbia Bugaboo Interchange Jacket valued at R3550. The cost of the membership is covered by the discount received 

How do shoppers benefit?

  • Customers have direct access to top quality international designer brands they might never have considered buying otherwise.
  • Customers receive massive discounts and deals that never expire
  • Customers can spread the costs rather than making a single big ticket purchase. This is a huge benefit because as the cost of living soars, consumers have less disposable income to spend on luxury items.
  • When times are tough, shoppers can cancel their membership immediately.

Related: 5 Basics To Success When Starting An Ecommerce Business

Key factors for success

Transparency. You must be upfront about the cost, delivery, returns, refunds and payments. Because shoppers are more trusting of making an online transaction, you need to give them an easy opt out option, especially when they are debited monthly for a membership fee.

A number of big ecommerce stores in the USA like JustFab, Blue Apron, Adore Me, and Kate Hudson’s athletic wear shop, Fabletics have, in the last two years, faced big lawsuits because of not openly disclosing how members can stop their automatic payment renewal.

According to World Wide Worx, CEO Arthur Goldstuck, transparency is not only essential for your business to succeed in building trust and customer loyalty. It’s also the quality of service you offer, the cost of your products or services and the ranges available as well as the overall customer experience that as a whole will differentiate you from your competitor.

 

Carey Mol
Carey Mol spent most of her career alongside numerous reputable corporates in the mobile, digital and tech industry. She continued honing her skills within her current role as MD for Cellular Media Distribution (CMD), a digital agency based in South Africa. One of the key products that has been in development for the past year at CMD is Commander HQ, the membership-based online lifestyle and sporting apparel store that gives members incredible savings, on top international branded sports gear and apparel. Commander HQ, which still has other elements in development, is ahead of the curve in this country, though South Africans are becoming more adventurous, confident and open minded when purchasing online retail products and services.