If the growth, revenue, and success of a subscription eCommerce model haven’t tempted you into the $10 billion industry, then the ease of setting up subscriptions on Shopify certainly will.
In this week’s eCommerce guide, we’re sharing how to set up subscriptions for your Shopify store, including the top recurring payment apps and Shopify fulfillment tips for success.
Why set up subscriptions for your Shopify store
In 2010, the founders of Birchbox came up with a simple idea: a curated box of makeup and skincare samples delivered to beauty addicts every month, for a recurring $10 fee. Today, subscription boxes span all different products and services, including razors, coffee, alcohol, and even t-shirts.
An eCommerce subscription model charges customers a recurring fee in return for the regular supply of products. This may be the replenishment of the same or similar items, or the curation of new and surprise items.
Whatever the contents, subscription boxes have four key benefits:
- Customer lifetime value – the automated repeat purchase model increases customer lifetime value and profit per customer while significantly reducing churn.
- Predictive revenue – the contract nature of subscriptions makes it easy to predict future revenue and plan cash flow for other business expenses.
- Streamlined shipping – the regularity of shipments helps streamline your fulfillment processes, keeping costs simple and consistent.
- Happy customers – whether you’re introducing new products to the market or replenishing goods in the nick of time, subscription boxes delight customers.
How to set up subscriptions on Shopify
To benefit from the power of recurring purchases, you can set up subscriptions on Shopify in four steps.
1. Establish the basics
First, establish the basics of your subscription model, including:
Are you replenishing the same product, curating new products, or enabling customers to select a mix of products?
Are you delivering products on a weekly, monthly, or bi-monthly basis, or are you letting customers to set a custom frequency?
Are you charging customers upfront or will you use recurring billing? Will you have a free trial period? Will you allow customers to gift a subscription? What is your minimum committment period?
You might test different contents, frequencies, and payment options as your subscription sales grow, but for now, establishing the basics is crucial for the next steps.
2. Download a Shopify subscription app
Shopify and Shopify Plus do not store payment information; therefore, they can’t handle recurring orders or payments themselves – you need an app.
A Shopify subscription app adds subscription functionality to your Shopify store by updating the product pages with subscription options, redirecting purchases to a subscription checkout, storing payment and subscription information, and generating recurring orders and payments.
There are several Shopify subscription apps, but the two most effective and popular are Bold and Subscriptions by ReCharge. Both apps come with essential subscription features, including:
- Different subscription types – including mystery and build-your-own boxes.
- Mixed cart subscriptions – to allow subscription and one-time purchases at the same time.
- Customer portals – to manage subscriptions, edit frequency, and swap products.
- Cancellation flows – to incentivize customers to stay.
Bold is the number one ranked subscription box and recurring orders app for Shopify, and you might recognize the name from one of the other 18 Bold Shopify apps.
The Bold app really shines across four key areas:
- Custom subscriptions – for customers to create their own recurring orders.
- Gift subscriptions – for facilitating gift purchases.
- Comprehensive analytics – on absolutely everything.
- Payment gateways – spanning multiple providers.
Bold is a great option if you want to add subscription options to existing products or where subscriptions form an important but not key part of your business model.
Subscriptions by ReCharge is a little more advanced than Bold and comes with high-functioning integrations with your store and existing apps.
The standout features of Subscriptions by ReCharge are:
- Dunning management – for preventing and managing failed payments.
- Automation – to offer free trials, samples, and discounts upon certain actions.
- API – to customize the subscription journey as much as you want.
- The customer portal theme engine – for matching your portal to your Shopify theme.
Subscriptions by ReCharge is ideal if you want subscriptions as the focal point of your business, and you want to take customization to another level.
3. Set up subscription fulfillment
Delivering subscriptions on time and to a high standard is crucial for retaining subscription customers especially if customers pay up-front.
While your Shopify app will re-generate orders for you, it’s up to you or your Shopify fulfillment partner to ship them accordingly. Therefore, it’s important to:
- Directly integrate your WMS or fulfillment partner with your Shopify store, so orders are processed as soon as they are re-generated.
- Provide customers with timely tracking information, so they know when their next subscription is arriving.
- Ship items in 2-days or less so customers aren’t waiting for orders to arrive long after payment – especially when replenishing products.
Tip: If you’re not confident in your abilities to fulfill Shopify subscriptions in-house, test the waters in Shopify with outsourced fulfillment, using a select number of products.
4. Promote and market your subscriptions
The long-term commitment of subscriptions means you need to work a little harder with your product promotions and marketing to earn customer trust, reduce risk, and convert hesitant shoppers.
Great subscription marketing tactics include:
- Social proof – using influencers in your eCommerce marketing strategy to share positive reviews about your subscriptions on social media, blogs, and YouTube.
- Risk reversal – using referral schemes and discount codes to reduce the perceived risk of subscribing to your products.
- Ads – placing social media and search engine ads that showcase your subscription products and tempt customers to test short-term subscriptions.
- Value – using free shipping, trial subscriptions, and discounts to make subscriptions valuable to your customers.
Subscription models increase customer lifetime value and make shopping with you even easier for customers. And, you don’t have to have a big budget, tech team, or fancy tools to get started.
All you need is a Shopify store, a subscription app, an experienced fulfillment partner, and the right attitude. Good luck!