How to Get into the Subscription Game with Shopify

| By Kelly Vaughn

How to Get into the Subscription Game with Shopify

The subscription business model is a trend that doesn't seem to be going away anytime soon. Generating over $5 billion in sales in 2014 and seeing a 200% year-over-year growth, subscriptions are stronger than ever. Technology is making it significantly easier to get started. Setting up a subscription model takes very little time and effort, and customers can easily subscribe to receive products from their favorite brands on a regular occasion. Customers are loving the convenience of not having to remember to reorder a product or visit a store when running low. With businesses seeing a 3X increase in lifetime value when offering subscriptions to their customers, you likely also want a piece of this profitable subscription pie.

What is a subscription model?

Instead of making a one-time purchase, your customers can subscribe to a regular delivery of a certain item or items over a specified period of time. For example, customers may subscribe to receive their products every two weeks, once a month, or once every three months. Quite often customers receive a small discount for subscribing.

What this does for you as the store owner is create a source of recurring revenue while making it easy for your most loyal customers to keep purchasing from you. They don't need to remember to visit your store and place another order; instead, customers will automatically be billed for their next order.

Is a subscription model right for me?

Sometimes this is obvious: if you're often receiving the same orders over regular time intervals from the same customers, a subscription model would most likely be effective. However, it's usually not this clear. You can often make a subscription model work with some creativity.

Let's go through some examples in various industries.

Healthcare: Progressive Nutracare sells supplements. Whether they are recommended by a doctor or by Google, people tend to take the same supplements regularly. This is an excellent opportunity for a subscription model: let your customers subscribe to their usual supplements so they automatically receive them on an ongoing basis.

Clothing: Frank and Oak offers a monthly styled clothing subscription. You give the stylists your size, and each month the stylists curate a box for you. You pay a $25 styling fee, which can be applied to any clothing you decide to purchase. If you don't want the clothing, you send it back.

Food: This is probably the most popular industry for subscription boxes. From snack boxes to monthly wine delivery to meal subscriptions, the subscription model is incredibly effective for businesses in the food industry. There's a limited life for the items in the box, so customers are always excited for their next box to arrive.

Some subscription solutions are possible regardless of industry. Shopify Plus customers can use a subscription model with Shopify Flow and Shopify Scripts to offer a free 2-day shipping option similar to Amazon Prime for an annual fee.

How do I set up subscriptions on Shopify?

The Shopify App Store contains a number of apps that help you offer subscriptions, including ReCharge Subscriptions, Bold Recurring Orders, and Paywhirl Recurring Payments. Each app has its perks, but some of the more popular perks (whose availability may vary) include:

  • Let customers purchase subscriptions and one-time items in the same order
  • Sync your subscriptions up with loyalty programs
  • Let your customers control when they want to receive their next order or if they want to cancel (no need to contact you!)
  • Offer a free sample, then switch their subscription to the full product
  • Let your customers build their own subscription box

If you need a nudge in one direction or another, we'll say that ReCharge has always been our favorite subscription app. The integration is seamless, and aside from the perks listed above, the app is highly customizable so your favorite Shopify development team (us!) can create a unique subscription solution for your store. But depending on your needs, one of the others may be more ideal.

How do I get the most out of a subscription model?

Here are some recommendations to grow your number of subscribed customers:

  • Add your subscription customers to their own segment on your mailing list. These are loyal customers who trust your brand enough to continue to receive your products on an ongoing basis. You can send them marketing emails specific to them to either offer them a discount code on a future order or get them to spread the word about their favorite subscription.
  • On the topic of spreading the word, offer a referral program. Offer your customers a discount for getting their friends and family to sign up for their own subscriptions. Your customers are your best form of marketing; put them to good use! They're already a loyal customer so they'll appreciate the discount, and in return you get some new customers.
  • Remember that customers also like having the option to subscribe to a product they frequently purchase because they can potentially receive a small discount for their loyalty. Depending on your subscription model plan, consider offering either a recurring discount or a subsequent discount after the first order.
  • Run regular reports on your most popular orders. If the same products are being ordered by the same people, send them a marketing email suggesting they subscribe to save some money.
  • Consider offering a more significant discount or a free sample or gift when becoming a subscribing customer. For example, if you sell a subscription to coffee, offer a free sample to get your customers started, then switch them to their full subscription after the sample has been delivered.
  • Subscriptions make for excellent gifts! Let your customers purchase subscriptions for another person. Either offer a fixed subscription (e.g. sell a 12-month subscription in advance) or use an app such as Gift Reggie to let your customers subscribe to an order on behalf of another person.

Subscriptions can be an incredibly powerful addition to your store. While the subscription model isn't for everyone, if it makes sense for you and your products, now is a great time to jump into the popular trend that will be rewarding for you and your customers.


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