The supplement industry is rapidly growing. Estimated to be worth $177.5 billion at the end of 2023 and projected to grow at a rate of 9.1% between 2024 and 2030, this booming industry is yet to reach its ceiling. And its primary sales channel? eCommerce.
With new brands, new health problems to solve, and convenient sales channels, the relationship between dietary supplements and eCommerce is a match made in heaven for entrepreneurs and customers.
Here’s how experts predict the eCommerce industry will benefit from the boost in health supplements.
A number of trends are driving the uptake of health supplements. COVID-19 caused the first real spike. To build immunity, many turned to online shopping to source supplements that could strengthen their natural defenses against the virus.
77% of American adults consume dietary supplements, and the average American spends around $56 monthly. Of course, there are other ways to increase immunity and health, such as at-home products and healthy meal kits, but those haven’t grown at nearly the same rate as supplements. So that begs the question…
How have supplement companies dominated e-commerce?
The answer seemingly lies in three strategies that lend themselves excellently to the industry:
The Subscription Model
Bundles and Stacks
Smart Fulfillment
Strategy 1: The Subscription Model
The Subscription Model, or “Subscribe & Save,” is where customers subscribe to weekly, monthly, or seasonal purchases and receive discounts of up to 15% off. Think content streaming services like Netflix or Hulu, recurring subscription box companies like BirchBox, and, more recently, supplement and vitamin companies.
Companies that employ the subscription model offer recurring products or services rather than the traditional, one-time transaction. Brands and businesses that have utilized this approach have reported better customer relationships, improved aggregate data, and more diversity in product offerings.
Turn Customers into Subscribers
Most large companies report that new customers only generate 15 to 25% of their revenues, which means that return customers generate the bulk of the revenue. Focusing on return customers and subscribers reduces the acquisition costs of targeting new customers while cultivating brand loyalty.
Gather More Fruitful Customer Data
As reported by Shopify, modeling and storing subscription data allows your company to better engage with your audience and create targeted content along the customer journey.
Many large brands develop separate marketing strategies for subscribers and non-subscribers and ways to convert non-subscribers to subscribers, including email campaigns and targeted discounts for subscription and account creation.
Sell the Same Product in Multiple Ways
The subscription model gives brands the creative freedom to understand how their customers would prefer to engage with their products and services. Beyond the discount, supplement companies offer subscribers access to free delivery, early bird offers, free trials or samples, gifts with purchase, and much more.
Strategy 2: Bundles
Bundles, or stacks in the dietary supplement industry, are a bundled variety of supplements for one specific health goal. Popular supplement stacks include the ketogenic diet, weight loss, muscle gain, and more. Bundling products allows companies to cross-sell, provide a more convenient shopping experience, and give customers more flexibility.
Cross-Sell
Bundles are the perfect way for supplement companies to cross-sell products. By intelligently combining multiple products into one item, supplement companies bundle their popular and top-selling supplements with products that normally might not sell on their own (we’re looking at you, L-carnitine). Also, if you have multiple flavors of a gut drink, for example, you can bundle them together in a variety pack.
Convenience
Customers can purchase all the supplements they need with just one click. And if you are using the subscription model, their supplements will be auto-fulfilled based on their desired cadence.
Flexibility
Some supplement providers like G Fuel offer their customers the flexibility of building their bundles — BYOB but for health.
Strategy 3: Smart Fulfillment
Any supplement company can promise a lucrative subscription model with convenient and flexible bundling options. Still, implementing these are highly complicated without the proper inventory management and order fulfillment process. Most 3PLs and fulfillment providers don’t offer the customization and bundling options that supplement companies require. That’s why you must supplement your business with the right fulfillment provider.
Convenient Bundling
Creating and shipping customized bundles, kits, or bulk orders through traditional fulfillment methods can be highly complex and downright costly. By offering a subscription service, your brand can sell various items in various ways, so brand owners must be able to group orders quickly and pick many of the same products at once, making the fulfillment process quick and straightforward.
Safe Storage and Transport
Supplements must be stored in cool, dry areas or risk discoloration, odor, and deterioration. Ensure that your fulfillment provider can take the necessary precautions to protect your inventory in a safe, secure, and climate-controlled environment and take care of it during transportation.
Reliable Shipping
Supplements and vitamins are taken regularly and at set cadences, so it is of the utmost importance to have a reliable shipping carrier with built-in resiliency. This year, it has been shown that even the most popular carriers, FedEx, UPS, and Amazon, are subject to delays and unreliable shipping times.
Conclusion
The supplement industry received a huge boost during the pandemic. Without access to regular retailers and pharmacies, customers were forced to go online to source vitamins and other health-related supplements to boost immunity and overall well-being. Since 2020, it’s been a match made in heaven for suppliers and consumers. The variety of the industry alone speaks to the demand for health and wellness products and consumables; gut health, immunity, weight loss, holistic health products, brain fuel, muscle food — the entire gamut of human health can be found online and purchased at the click of a button.
Creative strategies help suppliers keep customers engaged, and e-commerce provides the perfect platform for this. From subscription models to bundled variety packs, they find new ways to ensure their customers are well taken care of. Experts have narrowed down three strategies that have led to the meteoric success of supplement businesses in eCommerce channels, and they include:
The Subscription Model
Bundles and Stacks
Smart Fulfillment
