Why your Shopify Store needs a Subscription?

Now more than ever, there has never been a better time to invest in a subscription-based model for your Shopify Store. Subscriptions are the fastest growing area in commerce that offer exciting opportunities for your brand to build a community of customers who share your values and engage with your brand.

What is a subscription-based model?

A subscription-based business model is a business model that charges customers a recurring fee to access a product or service, typically on a monthly or yearly basis. Offering a subscription-based model to your customers offers your brand the opportunity to build strong customer relationships with a purpose and create a meaningful community of repeat customers.

Are Subscription Businesses Profitable?

Over the last few years, the subscription e-commerce market has grown exponentially, with some regions experiencing a growth of almost 100%. Subscription-based models are so big that Global subscriptions are projected to grow 70% year by year and hit $478B by 2025.Recharge Graph

Increase Customer Lifetime Value (LTV)

Repeat customers are 50% more likely to make another purchase than new customers, and on average, spend 33% more.

Reduce Churn

Subscriptions maximise the time you have with customers and provide a seamless experience for your shoppers to do business with you. On average, acquiring new customers can cost you 5-10 times more than retaining existing customers.

Allowing for flexible checkout options, skipping shipments or swopping out products avoids passive churn and increases customer loyalty.

Increase Average Order Value (AOV)

Subscription-based models offer new opportunities to cross-sell and upsell. In 2020 alpine, merchants saw an increase of 6% across verticals, meaning customers are engaging more than ever with subscription brands.

How to Build a Subscription Business?

Launching a subscription business can be highly lucrative–if done right. The first step is choosing the subscription model that best suits your business.

Choose the right subscription model.

There are three types of subscription models to choose from; curation, replenishment and access. These models come with their own set of perks and drawbacks, and you must do your research to determine which one is the best fit for your business.

  • Curation is the most popular subscription model. (55% of merchants choose this subscription type). Here, merchants curate a box of one or more products packaged together and shipped at a regular cadence. Replenishment is The second-most popular subscription model (32% of merchants choose this subscription type).
  • Replenishment offers the same product consistently. It’s also referred to as “subscribe-and-save” and works best for consumables products (ones that most people use daily).
  • Access is the third and fastest-growing subscription model (13% of merchants choose this subscription type). Access is used to offer a membership or gate availability. This model is multiplying because of the wide variety of benefits merchants can offer their subscribers.

Choose a subscription platform

Choosing the best subscription platform can be daunting when you first step into the world of subscription-based models. Thankfully, we already have you covered. Read our blog on which Subscription is best for you here.

Build a Subscription plan

What offerings do you plan to allow for your recurring subscriptions? Are your logistics and shipping in order? Ensuring that you can support regular purchases regularly is vital to ensure a smooth transition into subscription-based business models.

Set Up your Subscription Emails and Flows

Automations, Drip Campaigns, Flows, Triggers, whatever you decide to call them, creating automated emails for your subscription-based business models is necessary. Email flows offer more personalisation than only using notifications and Adhoc emails, which will lead to better engagement, turn your existing customers into subscription customers, increase conversions and reactivate inactive subscribers. 

Get Started

Once you have completed your setup, it’s time to turn on your subscriptions, try out a test order, go live and most importantly, let your customers know!

Best Shopify Apps for a Subscription Business

ReCharge is the powerhouse of subscription apps on Shopify. With their impressive customer service, one-click integrations and the ability to look after your data, it comes as no surprise that ReCharge features highly on our app recommendations. ReCharge has extensive integrations with Klaviyo, SMSBump, Octane.ai, Gorgios and LoyaltyLion so that from email to a conversation to customer retention, the experience is always consistent and streamlined. You can read more about why we always recommend ReCharge in our blog here.

How subscription based business are performing

Fresh Patch

Alongside a year on year increase of 218% in revenue from email marketing. Blend continues its relationship with Fresh Patch, the team looks forward to continuing to help Fresh Patch get the best from email marketing for their Shopify store with Klaviyo. Read our Case Study on Fresh Patch and a partnership with Blend Commerce did for them.

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Marketing Strategist

Our problem-solving enthusiast and Marketing Strategist, Carmen, has expertise that lies in the realms of analytics and strategy, where she’s been known to work magic and famously knows all the answers. What truly sets Carmen apart is her unquenchable thirst for knowledge. She’s continually adding new skills to her arsenal, all with the goal of making Blend an even better place and providing comprehensive solutions for our clients when it comes to their overall marketing strategy, whether on-site or through marketing.

Published: July 25 2021

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