Benefits of Subscription to Ecommerce Businesses
Business Can Forecast Further Into The Future
The average subscription length for Netflix is over four years, and the average subscription for membership sites is between 12 and 18 months. This means businesses using these models have a more predictable revenue stream and are able to plan more effectively, longer term. This helps with stability and future-proofing.
Customer Lifetime Value (LTV) and Customer Loyalty Are Both Improved
The knock-on effect of memberships and subscriptions is that your customer lifetime value skyrockets, and alongside it customer loyalty. Once customers are subscribed they tend to let services and deliveries keep rolling unless they become dissatisfied or their circumstances change. It also takes a conscious effort to cancel the agreement, whereas letting it continue is the lower effort option.
Inventory Management Can Be Streamlined
The predictability of customer purchases means businesses can calculate the right stock levels so they don’t either overstock, or run out of products.
Benefits of Subscription to Customers
It Makes Life Easier
If you have a cat and it eats a tin of food a day, you can set up a subscription to make sure you never run out of cat food. Netflix means you always have something to watch. The gym membership means you always have somewhere to go to keep fit. Subscription takes away things that you’d otherwise have to keep in mind and take care of.
Cost Saving
Often, ecommerce subscriptions are cheaper than buying items individually so signing up for a longer period means cost-saving in the long run.
Access To Exclusive Content
Brands can make subscriptions more attractive by offering content or perks to subscribers that other customers don’t have access to. This could be early access to new products or other benefits.
Challenges of Subscription to Ecommerce Businesses
Managing Customer Churn
It’s key that subscription businesses make their portals easy for customers to understand and use. Make it clear how they can amend, pause or cancel. Give them full flexibility and it’s more likely that they’ll stay. The worst thing you can do is make cancelling a nightmare for them. Once they get over the hurdles to cancel, they’ll never come back.
Managing Inventory
This is a double edged sword - we listed it as a positive earlier, but it does pose its own challenges - the fluctuating nature of subscriptions can make demand forecasting more complex.
Subscriptions with product options require inventory to maintain a certain product assortment for customers to choose from, by accurately anticipating demand for different product options.
Regulatory Obligations
This isn’t a massive headache, but something that needs to be taken into account and dealt with appropriately.
For example, ensuring compliance with regulations set by the Consumer Protection Financial Bureau. You must explicitly state if a subscription automatically renews unless the customer actively cancels it.
Types of Subscription Model
There are several different types of ecommerce subscription model - each one suits a different product or service offering. Here are the main varieties of subscription model, with some examples of industries that are well suited to them.
Replenishment
The replenishment subscription model delivers regularly consumed items to customers, normally on a pre-arranged cycle. Customers like this model because it means they never run out of essential items or need to remember to order them.
Retailers often offer discounts for subscriptions compared to one-off purchases so customers can save by receiving orders on a monthly or quarterly basis.
Great examples of items that work well are consumables like toilet rolls, meal kits and personal care products like razors.
Access
Access subscriptions provide exclusive access to products, services, physical spaces or content, for a recurring fee. Rather than focusing solely on delivering physical products, the access model grants subscribers special privileges, benefits, or enhanced experiences unavailable to non-subscribers.
Subscribers may gain access to exclusive events or merch, while American Express, for example, allows top-tier cardholders access to premium lounges at airports.
Access subscription models include content streaming platforms such as Netflix and Spotify, which offer access to a library of movies, TV shows, music, and podcasts for a recurring fee. Other access subscriptions cover things like gym access, newspaper websites, online learning hubs and software as a service.
Curation
Curation subscription models deliver a box or selection of items based on customer preferences or a given theme, while benefiting from the subscription brand’s expertise in picking the actual items.
For example, some beer subscription businesses enable customers to select ‘dark', ‘light’ or ‘mixed’ for their subscription box, then the business curates a selection of drinks based on that preference.
The main objective is to surprise your Shopify store customers and persuade them to keep the subscription by providing them with a curated selection of items they might not have otherwise discovered.
Hybrid
A hybrid subscription combines multiple aspects of different types of subscriptions together. For example, you could have a tiered fixed fee, priced per user, or a tiered fixed fee, pay as you go model. A business might offer a membership that gives access to exclusive content alongside the option to replenish certain products regularly.
Succeeding With Your Subscription Offer
Think Carefully About Your Pricing Strategy
There are lots of ways to encourage customers to opt for an ecommerce subscription over a one-off purchase. You can offer free trials, create a tiered pricing structure, offer discounts for subscribers over one-off purchases, and incentivise upfront payment - for example a 10% price reduction for paying for 12 months upfront. This also helps you lock in predictable revenue. Above all, whatever route you choose, make it clear to your customers so it’s easy for them to understand the benefits, select a plan and sign up.
Implement a Loyalty Programme
There are lots of loyalty schemes available for Shopify. Implementing one and tying its benefits in with your subscription offering can be a great way to lock customers in and add value for them.
Make Use Of A Subscription Platform
In a similar fashion to loyalty schemes, there are dedicated subscription platforms that integrate easily with your Shopify store. Most of them have a monthly subscription cost and sometimes take a percentage of every subscription transaction they generate. In order to make the most of your subscription offering, it;s key to choose the platform that best suits your business, products or services. Let’s take a look at some of them.
Does Shopify Support Subscriptions?
Shopify does support subscriptions, making it an ideal platform for businesses looking to implement recurring billing models. Merchants can seamlessly integrate subscription functionality into their stores, enabling customers to subscribe to products and services with ease. This opens up a world of opportunities for businesses to foster long-term relationships with their customer base.
Shopify App Subscription API
To facilitate the integration of subscription models, Shopify provides a robust Subscription App API. This API allows Shopify developers to create and customize subscription apps tailored to the specific needs of businesses. The Subscription App API ensures a smooth and efficient subscription management process, offering features such as billing automation, order processing, and customer communication.
Best Shopify Subscription Apps
There are quite a few options when it comes to setting up your subscription service for your Shopify store. Here are some of the most popular providers, their key features and how much they cost:
Recharge
Recharge stands out as one of the premier subscription apps on the Shopify platform. Known for its user-friendly interface and comprehensive features, Recharge empowers businesses to set up and manage subscription products effortlessly. With Recharge, merchants can offer subscription plans for physical goods, digital products, or services, providing flexibility for a wide range of business models.
Key Features of Recharge:
Seamless
Easily integrate subscription functionality into your Shopify store.
Customise billing cycles, trial periods, and pricing to meet your business needs.
Empower customers to manage their subscriptions through a dedicated portal.
Gain insights into subscription performance with detailed analytics and reporting tools.
Recharge specialises in setting businesses up with new subscriptions, as well as managing migrations from existing subscription providers to ensure a positive experience for customers. It also manages bundles, cross-sell and upsell, and will help to reduce customer churn. The software has a customisable portal so it fits nicely into Shopify stores without feeling bolted on.
Pricing
The Basic plan starts at $99, which Recharge describes as being ‘perfect for startups, indie operations, and the subscription-curious’. This gets you:
Basic subscription widget
Customizable customer portal
Simplified cancellation journeys
Gifting capabilities
Analytics dashboards
Industry benchmarks
Integrations with top ecommerce tools
The Pro plan, ‘the fully-featured package behind the industry’s top brand’ comes in at $499. As well as everything in Basic, you get:
Convert up to 13% more customers to subscriptions with one-click upsells and cross-sells at checkout. Accelerate growth even more with post-purchase offers.
Reduce churn up to 44% with smart cancellation prevention
Boost AOV up to 75% with bundles and cross-sells
Access to Javascript SDK and Storefront API
Cross-sell, upsell, and A/B test on your subscription widget (coming soon)
There is also a Custom plan, based on volume, for which prices are available on request.
Skio
Skio is another standout Shopify subscription app designed to streamline the subscription process for merchants. Offering a range of features, Skio caters to businesses of all sizes, providing a reliable solution for implementing and managing subscription models.
Key features of Skio:
Enable automated recurring payments for subscription products.
Easily handle subscription changes, cancellations, and upgrades.
Tailor the checkout experience to align with your brand and customer preferences.
Keep customers informed with customizable automated communication for subscription-related activities.
Skio boasts that some of its team have previous experience at Shopify and Recharge and has a best in class platform.
Features that differ from the standard ones that are common to most of the providers include a data platform that gives insights to help improve performance, and SMS functionality for direct contact with customers to increase LTV.
Pricing
Their dog plan is $500 per month if paid annually, or $600 per month if paid monthly, and it also takes 20 cents and 1% per transaction. Their cat plan is custom with prices available on request.
It’s not the cheapest of the available options but has a comprehensive suite of products.
Loop
Loop is a dynamic Shopify subscriptions app designed to transform your curated subscription box into a sustainable recurring revenue machine. With Loop, the process of adding subscription options for memberships, digital products, and physical products is simplified, requiring just a few clicks to seamlessly integrate into your store.
Key features of Loop:
Enable subscriptions for memberships, digital products, and physical products to cater to a variety of customer preferences.
Adding Loop to your store is a breeze, requiring just a few clicks to set up and start building your recurring revenue stream.
Empower your customers with the ability to pause, skip, or reschedule their orders effortlessly, ensuring a flexible and user-friendly subscription experience.
Transitioning from other subscription platforms to Loop is hassle-free, thanks to its seamless migration capabilities.
Benefit from a smooth and integrated experience with Shopify Checkout, ensuring a cohesive transaction process for your customers.
Incentivise subscriptions with tiered discounts, encouraging customers to opt for long-term commitments.
Loop has some nice advanced features including gamified rewards, automated cancellation flows and winback campaigns.
Pricing
There’s a 3 tiered pricing structure for Loop: $100 per month and 1% of subscription sales, or $400 and 0.75% of subscription sales with enhanced features. There’s also an enterprise plan for brands with over $25m GMV.
Bold Subscriptions
Bold Subscriptions empowers sellers with a range of tools, including APIs, webhooks, and developer tools, enabling them to tailor their subscription service to their precise specifications. This flexibility extends to incorporating unique functionalities such as SMS or smart device ordering, providing a customized experience for both sellers and customers.
Key features of Bold:
Bold Subscriptions provides an extensive suite of features, including customizable subscription boxes, subscription analytics, and support for various billing models.
Utilize tools like pause and skip options, offering customers flexibility and enhancing their subscription experience.
Seamlessly integrate with other Shopify apps and popular third-party tools for a comprehensive e-commerce solution.
Simplify the process of setting up and managing subscription products with a user-friendly interface.
Allow customers to automate the reordering of their favorite products at regular intervals, fostering convenience and loyalty.
Create subscription promotions and discounts to incentivize new subscribers and reward loyal customers.
Pricing
There are 3 plans, at $25, $50 and $75, with each tier offering more features and functionality. There is also a small percentage taken by Bold from each sale. All plans come with a 30 day free trial so you can see if it’s right for you before committing.
PayWhirl Recurring Payments
Paywhirl is a great choice for recurring subscription payments.
Effortlessly establish automatic billing cycles for your customers, selecting the frequency that best suits your business needs, all while seamlessly integrating with multiple payment solutions available on your Shopify store.
Key features of Paywhirl:
PayWhirl offers a variety of payment options, including traditional credit cards, ACH bank transfers, and even cryptocurrency for enhanced flexibility.
Implement tiered subscription plans with different levels of access or benefits, catering to diverse customer preferences.
Leverage detailed analytics to gain insights into subscriber behavior and improve subscription offerings.
Seal Subscriptions
Embark on the journey of subscription-based business growth and cultivate steady recurring revenue with Seal Subscriptions.
The Seal Subscriptions app provides comprehensive control over your subscribers, products, discounts, churn rate, subscription boxes, and cancellations, backed by an exceptional support team ready to assist in any situation.
Key features of Seal Subscriptions:
Explore the versatility of selling classic and prepaid subscriptions, complete with discounts, free trials, and more.
Enhance offerings with tiered discounts, customizable shipping options, gifts, and loyalty features.
Empower customers with easy access to subscriptions through magic links.
Gain valuable insights into your business through detailed statistics, a payment calendar, and more.
Personalize brand with white-label branding, featuring custom email domains.
Appstle Subscriptions
Explore the potent features of Appstle Subscriptions - it ecompasses thorough and effective subscription management tools, loyalty perks, 1-click checkout, churn control, build-a-box, and beyond.
Key features of Appstle:
Market standard and prepaid subscription plans, including free trials, customizable box options, and additional features.
Provides tiered discounts, personalized shipping options, gifts, and an array of loyalty features to enhance customer engagement.
Introduce a customer portal rich in features, enabling one-click logins and quick access to essential action links.
Optimize return on investment through strategic upselling, bundling opportunities, automated bulk processes, and an array of retention tools.
Shopify Subscriptions
Features
Shopify Subscriptions is a free plug in for Shopify stores, available on the app store. It makes it easy to set up and launch subscriptions, directly from Shopify admin. Your customers can conveniently pause or skip orders and update payment and shipping details right from their account.
While it offers a good way to get started with a subscription offering, other subscription software out there has more flexibility and features, in the event that your subscription offering becomes more sophisticated.
Some of its features include
auto-billed subscriptions (renew weekly, monthly or yearly) with discounts
customers can cancel, skip, or pause subscriptions
customisable email templates for order confirmations or payment reminders
access reporting to analyze your store’s subscription performance
transfer existing subscription contracts to Shopify Subscriptions
Pricing
Shopify Subscriptions is free.
Ordergroove
Features
Ordergroove integrates with Shopify amongst other ecommerce platforms, and is designed to help you launch and scale your subscription offer.
It lists its key industries as beauty and personal care, health and wellness, food and beverage, fashion and apparel, pet supplies, retail and home goods.
Pricing
Prices aren’t available on the website - you need to enter your details in order to schedule a demo.
Best Platform for your Subscription Website
Selecting the best subscription platform for your Shopify store depends on your business model, product offerings, and long-term goals. Consider factors such as pricing, ease of integration, flexibility in billing cycles, and the level of customer support provided by each app. Additionally, evaluate whether the app aligns with your brand's image and offers the features necessary to provide an optimal subscription experience for your customers.
While Recharge and Skio are exceptional choices for Shopify subscription apps, the platform's expansive ecosystem presents numerous alternatives to suit various business needs. As the subscription economy continues to thrive, exploring and experimenting with different apps can unlock new opportunities and help you achieve success with creating more loyal customers.
