Lunch with Littledata: Mapping the evolution of subscriptions with Awtomic

Awtomic Littledata

Subscription ecommerce is evolving more rapidly now than ever before—thanks in large part to the boom in subscription sellers. As with any rising new industry, though, some things are still a work in progress.

The future of subscription ecommerce is no doubt bright, but many new brands still face similar issues. Whether it’s costly construction for customer portals, poor tools for subscription management, or blind spots in critical analytics, jumping these roadblocks is a key first step on the road to subscription success.

To explore how brands can make that leap and build a great subscription store, as well as how the subscription industry has grown and where it should aim to go, we spoke with Emily Yuhas, CEO and Founder of ecommerce subscription platform Awtomic.

She shares how to set your store up for success from the start, gives her thoughts on the industry’s growth and future, and explains why diving deep into data is a must for any subscription seller.

Greg from Littledata: What’s the story of Awtomic?

Emily Yuhas: My sister has a brand where she sells body products on Shopify. Over the years, I had multiple conversations with her about what could be better about her process and how I could help.

One thing that kept coming up was how frustrated she was with her subscription app—and not only from a usability standpoint. So I audited the most effective methods that top premium subscription brands were using and the reasons that their programs had been so successful.

When I looked into how I would actually implement them for her brand, I realized that there wasn’t a good solution. The only solution really was to hire a developer to build it all custom.

That was surprising to me because a lot of the methods I’d seen really working—things like progressive discounts or personalized bundles, really easy customer portal experiences—those are pretty common. I realized each one of the companies that I’d seen using those had to reinvent the wheel and basically build things from scratch.

That’s what got me really excited when creating Awtomic—building those features into a platform that goes beyond “subscribe and save” and actually delivers really easy-to-use experiences for merchants and customers out of the box.

It allows our users to focus on their brand while we go out and do the research on what the most important tools are for subscription ecommerce. Then we make those easily available and constantly evolve as a platform to support our brands that way.

Greg: There are a huge number of new subscription services that likely have similar issues to your sister too thanks to the recent DTC boom. What has it been like for you to see that growth and have brands adopt your product?

Emily: Overall it’s really exciting. It goes to show how many merchants want to offer subscriptions because it’s such an effective way to build that recurring revenue to really create a community and relationships with your customers.

I think it’s also really interesting to reflect on how far we’ve come. Just a few years ago, subscriptions felt kind of scammy. If you think back even, say, five years ago—you have a lot of people who had a visceral reaction of, ‘Oh, I didn’t know I was signing up for a subscription. And then I got charged again. And then I had to call and stay on the phone for an hour to cancel. And then I had to cancel my credit card.’ That’s just terrible, right?

We’ve come a long way from that in a short amount of time. Now, there’s a lot more transparency—a lot more consumer trust. Subscriptions are becoming accepted as a great way to automate purchases of products that you love. I think that’s reflected in the growth of subscription services, the growth of merchants that want to offer subscriptions, and the overall growth of consumers who want to purchase subscriptions. So it’s a really exciting space.

What I constantly see when I look at the industry is how early we still are in it. When you compare the scammy days to where we are now, and then look forward to what it can become, we’re still not at a place where subscriptions are actually the most convenient way necessarily to purchase products—but they really should be.

I think there’s a huge amount of opportunity to make it a lot easier for people to purchase the products that they use every day.

“We’re still not at a place where subscriptions are actually the most convenient way necessarily to purchase products—but they really should be.

Greg: How should stores go about adding subscription selling—or improving their current subscription offering?

Emily: I think that a lot of merchants, when they add subscriptions, do it almost as an afterthought. They add the “subscribe and save” option and then just leave it at that.

There’s so much benefit to be had from starting from the point of thinking about your consumers and how they’re going to use your product. Do customer interviews. Look at historical orders. Understand things like how often customers get refills of your products. Ask yourself “Which of my products work best for subscriptions?” Not every product in your store is a sure-fire fit.

Think about things from your business’ perspective, as well. Ask “how many items do I need to sell together to reduce shipping costs?” I think those thought processes combined can build a really great subscription program.

A lot of times we come at things from a very transactional view and think about how we can drive more sales now. Instead, make that mental shift to consider the long-term relationship with a customer. You don’t want a customer who’s going to subscribe every week and then cancel after three weeks because they have too many items in their drawer. You want to find the customer who subscribes closer to every month and a half (or whatever their exact usage is) and stays for years. If you get buyers to the point where they’re actually getting your product when they want it and when they need it, that’s when they retain and you build that long-term relationship.

Greg: Awtomic offers a handful of advanced features. Can you recommend any that help merchants with customization that works better for their consumers?

Emily: Absolutely. We’re really excited about our build-a-box feature. It’s something that was a huge gap in the market—being able to sell a customized box of products and then make it easy for customers to manage it on an ongoing basis. A lot of times you’d see personalization on purchase, but then the buyer is stuck with that selection going forward and it’s difficult to make changes.

We focused on making that feature a really seamless experience with our app and we found that it works across a lot of verticals. We see it work really well with pets, household, beauty, drinks, or meal services. But what’s really great about it is it’s an example of a feature that works for both consumers and merchants and makes that relationship stronger.

Greg: Right. It helps subscribers get the exact products they want delivered via their subscription instead of thinking it’s easier to just go to the store and buy individual items.

Emily: Absolutely. We have some brands that come to us who have either had something like this in the past or know they need to offer it. But we also have a lot of brands who have been direct to consumer for many years and introduce it because it’s part of our platform, which we love. It’s just so easy. It’s not something they have to go seek out and do custom development for.

There was one case where I did a strategy session with a brand that had never considered doing this before. We set it up for her within a few minutes and that week I saw her average order value go from around $8 to around $30. It was just bonkers to see that happen so quickly all because it was something that resonated really well with her customers. They didn’t mind purchasing in larger quantities and she gave them a bit of a discount for that. Ultimately, it’s much better for her operationally and for her buyers.

Tip: Learn three tactics that can help better your subscription sales.

Greg: Are there any other subscription selling strategies you’ve seen stand out?

Emily: I would say the most important thing that still gets overlooked is transparency and flexibility. There’s a reason that you see a lot of sites say “cancel any time” or “skip or pause when you want to” because that’s really important for consumers. I’ve experienced it as a subscription enthusiast with products that I personally love. There’s just a reality that sometimes we go on vacation or forget to use everything we got in a shipment—things that are part of life.

It’s frustrating when I can’t go in and just say, “I don’t need this right now.” Maybe my situation has changed and I want to change the thing that I’m subscribed to. Maybe I just want a new scent of soap. Whatever it is, I should be able to do those things quickly and easily. It’s still the case with so many subscriptions that I’m on that I try to go manage them and I can’t even get into my account. Then when I finally get there, there’s no pause button.

“Your subscribers are a special class of customers and they should be treated that way.”

Those are the things that drive me nuts as a consumer and they make me feel negatively about a brand, which is such a shame because it’s a brand that I’ve already decided that I love. I think if you do nothing else, transparency and flexibility are the most important thing.

I’m also a huge believer in subscriptions as memberships. Your subscribers are a special class of customers and they should be treated that way. Brands that really lean into that end up retaining their customers longer. That can mean anything from giving subscribers exclusive access to upcoming products to special discounts across the store.

I think it’s really cool when brands are mission-driven as well. We work with coffee companies who source from very specific communities and they can share more about the people in the communities with their subscribers as special content, maybe even live videos. As we come out of the pandemic, you could even think about potentially organizing live events for your subscribers.

There’s just so much opportunity to engage your subscriber community—these people who have already expressed that they really like your products and your brand. The more brands think about their subscribers as long-term relationships that they want to maintain, the more successful they’ll be.

Greg: Does that approach help with lifetime value as well?

Emily: Absolutely. I think it helps with conversion, too, because buyers see if they subscribe to a product, they’re not just going to get a 10% discount. They’re going to become a member of this community and get all these other perks. Wine clubs have been doing this for a long time. If you’re a wine club member, you get your shipment, but you also get free tastings when you come to the winery and you get treated like a VIP. You can book tables where others can’t. You might get access to special dinners and other events. You can go visit other wineries associated with the one you joined. It’s a great model that’s been around for a long time that can apply to almost any brand really.

subscription buyer

Greg: How important is data in subscription selling—and to your users specifically?

Emily: Data is very important for subscription selling. Our users that are most successful with subscriptions care most about their data. It’s only going to become more important as brands need to lean into subscriptions and recurring revenue.

As we see marketing costs and cost of acquisition going way up, the reality is that subscriptions can absolutely be optimized. And like I said, a lot of folks come into it, just throw up the “subscribe and save” option and move on. But if you really start looking at the data, you can start to understand what products perform the best as subscriptions.

You can even see what products are good ones to be added to subscriptions, even if they’re just one-time add-ons. You’ll see what frequencies perform best. If your customers are subscribed monthly, you’ll see if they end up having a higher LTV. You’ll understand why people are canceling. Some of the most successful brands we work with will actually call their customers and ask them for a cancellation reason and how they could have been better.

Data helps you deeply understand why people are canceling and what products people buy together. Could those be sold as bundles and increase AOV? You’ll understand what discount incentives resonate with people. On our platform, you can easily even run experiments where you try different discounts and see if that impacts your conversion rate. You can see how people are engaging with your customer portal. Are they skipping often? Are they ordering now or are they swapping their products a lot? What are they swapping to? All of these things are data points that merchants really should be looking at on a regular basis.

Understanding their customers’ behavior and understanding the performance of their subscriptions will help them make their subscription program much stronger. Those who do see their proportion of subscribing customers go up. Ultimately, as soon as you get someone to a subscription, their lifetime value increases significantly.

Greg: Do you see your users taking that data and creating personas of their top buyers and then retargeting them?

Emily: I do. I think there’s so much opportunity to do this specifically with subscribers. I would say it’s actually really surprised me.

We often do strategy sessions with our customers. One thing we talk about right off the bat is thinking about your marketing, messaging, and how you can target subscribers specifically. A lot of brands have that one lazy subscription option on and just continue marketing as if they’re marketing one-time. But really understanding “who are the customers who become subscribers? How do I target them? What are the personas within?” That’s a really valuable way to increase subscriptions. For brands who do that, subscriptions pretty quickly become a really primary part of their offering.

Tip: Profile and target leads that match your best customers using Facebook’s Conversions API to run dynamic ads.

Greg: Right. It’s understanding the difference in kinds of customers to find out, like you said, people who are going to stick around, who are looking for that membership, who are looking to get a product on a regular basis and are willing to pay for a subscription.

Emily: Yeah, absolutely. I’ve started to see some behavior differences even in the types of products some of our brands will offer. Things like a discovery box or some kind of one-time purchase that indicates that the person is interested in trying something with the idea of potentially becoming a subscriber. Those are lead-ins to subscriptions that help identify different types of customers for you.

Greg: Are there any specific metrics that your users look to the most?

Emily: I would say the top-level metrics that people look at are overall subscriptions, number of buyers active/paused/canceled, involuntary churn, voluntary churn, revenue from subscriptions, and average order value.

But again, I think there’s so much opportunity to go deeper here. Those brands that do go deeper, they look using things like retention by cohort. That’s a huge one to look at. It helps people understand which customers are retaining, what they did, and why they stayed.

Being able to look at retention by product, buy by frequency—understanding how these things actually impact customers’ behavior and longevity. Looking at product performance, not only with subscription but which products pair well together for subscription or as one-time add-ons. Understanding cancellation rates and why people are canceling.Going deeper into the voluntary and involuntary churn.

Our platform has a lot of advanced functionality around reducing involuntary churn. We actually give merchants some tooling to experiment there with different numbers and intervals of reach-out attempts via SMS. So there’s a lot of optimization to be done there. Also, again, cancellation reasons give merchants the ability to constantly evolve as they get that feedback.

Another area is discounts and incentives. There’s the basic “subscribe and save 10%,” but you can go so much further than that. You can reward people for a number of products that they have in their subscription. You could reward people for longevity on the platform or how many people they’ve referred. I think all of these things are metrics that merchants can watch as they play with the different settings and experiments and get feedback from customers.

Tip: Go deeper on your data with the ultimate guide to subscription analytics.

Greg: Are there major challenges that you see facing a lot of subscription sellers right now or down the road that they need to be aware of?

Emily: A big one we already discussed is that we can’t just rely on that simple subscribe and save discount to convert and retain people anymore. That’s a very basic level entry point and it’s not going to be the thing that keeps people long-term. What I see is this lean into changing your mindset around not really thinking of these as transactional relationships, but thinking of them as long-term relationships and really building community and depth in that relationship. That’s what will set the brands apart. That will end up really winning this game.

Greg: You mentioned the lack of a development team in the beginning as a blocker for some subscription sellers. Do you have any thoughts on the impact of the no-code movement and how it could affect the future of ecommerce apps like yours?

Emily: I think overall it’s a really positive thing. In the past ecommerce brands have had to kind of be half ecommerce and half tech company. That just doesn’t make sense.

Development costs are extremely high. To have engineers on staff is incredibly expensive. What’s so great about Shopify and a lot of the no-code solutions out there, including Awtomic, is that they make it so that you don’t need developers, but you can still get a lot of the same power, capability, and even flexibility. It gives you the ability to still express your brand and uniqueness, but not have to be in the deep plumbing of how everything pipes through to orders and fulfillment and inventory.

I think our app and other no-code apps on Shopify make it so that you don’t need to invest in custom solutions when they shouldn’t need to be custom. That, I think, will have a big impact on which brands win as well. Actually, there’s been a really interesting trend I’ve been seeing where larger brands that already have custom solutions are looking for how they can get off those solutions and onto apps and platforms that will do it for them because of the platform benefits they would get.

In a sense, it’s free development. They don’t have to constantly invest in development costs themselves and maintenance. They also get flexibility from the platform as apps like Awtomic continuously do research and invest in improving the capabilities they get to unlock as they come online. They don’t have to have someone on their team go out and do the research, go design, go build with a team, maintain the thing forever, constantly change it, and have that lack of flexibility. They actually get more flexibility from being part of a platform.

I think ultimately the no-code movement’s most impactful effect is empowering ecommerce brands to focus on the things that they want to do and do best without having to effectively become tech companies to be able to offer those functionalities.

Greg: Is there anything on the horizon for Awtomic that you’d like to share?

Emily: We’re always thinking about how can we really deepen relationships between merchants and their consumers. So, we’re working a lot on bridging the gap between what it means to be a subscriber and what it means to be a member.

Of course, we’re also leaning into a lot of the features that differentiate us already, like our build-a-box and helping merchants sell more and become more operationally optimized. We’re really working to make the consumer experience as powerful and easy to use as possible.

I think that’s something that’s really unique about our team. We come from a user experience and tech background, so from the beginning, we focused a lot on the ease of access and usability of our portal. Constantly moving the needle on making our app experience really delightful is so important to us.

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