3 Ways E-Commerce Retailers Can Unlock Recurring Revenue This Holiday Season to Earn Year-Round

Season’s greetings from the busiest time of year — at least for brands and retailers. While gift shopping may be in the early stages for most of us, Black Friday and Cyber Monday (BFCM) preparations are well underway for merchants. And the stakes get higher with each passing year.

As the CEO and founder of a relationship commerce platform that powers subscriptions for 11 percent of adult Americans — and processes billions in annual recurring revenue for giants like L’Oréal and Dollar Shave Club — I can tell you that for brands of any size, these peak shopping days present a rare opportunity to influence year-round business growth.

But with so much to do in so little time, many retailers choose to funnel resources into immediate BFCM opportunities such as brick-and-mortar stores opening earlier and closing later, or e-commerce brands dialing up their holiday shipping logistics.

This means they often overlook the longer-term strategies they can set in motion to generate recurring revenue well beyond the holidays.

The brands at the forefront of retail’s recurring revenue are all capitalizing on an important shift. By 2029, it’s estimated that three in 10 purchases made by Americans will occur online, with shoppers continuing to gravitate away from traditional retail.

The holidays are the perfect time for brands to take advantage of recurring revenue opportunities like subscriptions to cultivate enduring customer relationships and make recurring revenue the gift that keeps giving throughout the year.

To that end, here are three actions brands and retailers can take now to boost immediate profits and set the stage for consistent year-round growth:

1. Adopt a business model that incorporates subscriptions.

Subscriptions have the potential to drive a 2.5x lift in customer lifetime value (CLTV) no matter the time of year. However, according to data from the leading merchants that use Ordergroove, subscriptions also create a valuable halo effect. When customers enroll in a new subscription, they tend to increase their spend with that brand by 60 percent or more over the next six months.

As I see it, all brands need is the right positioning and marketing to leverage subscriptions and maximize this peak sales time.

Prepaid subscriptions are a popular option for encouraging subscription gifting because they allow shoppers to pay upfront for a specific number of shipments for the recipient. But how can brands get these gift ideas on shoppers’ radars?

Offering exclusive deals for subscribers and early access to promotions during BFCM is how our merchants have ensured their subscriptions are at the top of shoppers’ holiday wish lists over the years. From October to December, merchants can use tailored messaging to create a sense of urgency and exclusivity.

The key is ensuring your subscription offer is as good, if not better than, any other sitewide holiday promotions to incentivize enrollment — and make sure you don’t undercut the value of the subscriber experience.

2. Innovate beyond the basic subscriber experience to build long-term loyalty.

Consumers have rightfully high expectations for their shopping experiences, especially around the holidays. With every subscription promising convenience and value at the very least, brands need to dial up the novelty, personalization, and overall subscriber experience to retain subscribers and succeed in this space today.

Seasonal subscription bundles tick all three of those boxes, making them a great way to transform casual holiday browsers into loyal subscribers. Whether they’re used to give subscribers an entire haul at a lower price, curate products just for them, or increase the perceived value of the subscription, bundles deliver a memorable experience that keeps subscribers engaged beyond the holidays.

Meaningful innovations — e.g., leveraging order history to craft relevant upsell offers or encouraging subscription enrollment with personalized messaging — can also help win back one-time buyers during the peak shopping season. These enhancements remove friction and deepen customer satisfaction, paving the way for year-round loyalty.

3. Ensure a smooth end-to-end shopping experience, from order placement to delivery.

A smooth online shopping experience is crucial during peak holiday times, and that starts with the UX on merchants’ websites.

With 40.5 million consumers choosing to snap up Cyber Monday deals on their mobile devices last year, mobile optimizations are a non-negotiable leading up to the holiday shopping rush to minimize cart abandonment and lost sales.

If there’s one thing I’ve learned from watching brands scale, it’s that maintaining a well-oiled supply chain is equally important. Fortunately, steady subscription sales make that easier to achieve. Using subscription data to predict demand and manage inventory accordingly can help brands mitigate common supply chain issues during the holiday rush and even ensure they have enough items on hand to accommodate last-minute shoppers.

Having these elements in place for the high-stakes shopping season sets brands up to honor delivery timelines, foster trust and satisfaction among customers, and keep them coming back long after the holidays.

Make BFCM the Start of Evergreen Recurring Revenue and Valuable Customer Relationships

BFCM lasts just a few days, but the impact of this opportunity to cultivate customer loyalty and recurring revenue will last forever — and the takeaways from the leading retailers using this time to influence year-round growth are clear.

As the future of retail evolves to further blur the line between online shopping and brick-and-mortar experiences, brands that focus on recurring revenue and customer loyalty will have the best chance to upsell and cross-sell, ultimately driving sustained growth and success.

And by prioritizing subscriptions, enhancing customer experiences, and ensuring a seamless online shopping journey, brands can position themselves for success throughout the year.

Greg Alvo is the CEO at Ordergroove, a company that powers subscriptions and recurring revenue for serious brands.