Learn how to set up a food subscription box model for your eCommerce store.
It’s 2023! Food subscription box model is one of the most promising ways food businesses are generating profit.
If figures by Statista are anything to go by, the meal box subscriptions market is going to grow more than three times its value in 2021 (15.21 billion USD) to 64.44 billion USD in 2030.
That means, if you’re an eCommerce business into food, you should set up your subscription meal box, or be ready to get left behind.
How you set up the foundation of your Shopify food subscription business decides whether your business will thrive or derail at some point in future.
From our work with hundreds of Shopify subscription businesses over the years, we’ve learned how to set up subscription businesses the right way.
In this blog, we share those learnings with you.
What is a food subscription box model?
Food subscription box services have made a big impact and now account for over a quarter of all subscriptions. While this increases competition in the food subscription sector, it also creates a hugely lucrative opportunity for Shopify stores in this business.
Consider these figures to understand the food meal box industry:
- The food meal service market is forecast to grow to $ 64.4 billion by 2030
- 17% of Americans subscribe to a meal delivery service
- 90% of food meal box subscribers refer others to the service
- 26% of Gen X and 29% of millennials have used food meal box services
How to set up a food subscription box model for your Shopify store?
Follow this step-by-step guide to set up your food subscription box model business. In addition, you will have to take care of many more aspects, but these are the building blocks that will get your meal box subscriptions started.
Step 1: Choose the type of subscription model
The first step to setting up your food box subscription is to choose a subscription model that suits the nature of your products and business. Here are some factors you must consider:
- Consider what your customers want. If you’re launching a new meal box subscription model, you could conduct a survey with your existing customers to understand their preferred type
- Identify which type of subscription model would work best for your products. For example, a customized subscription box model might work best for food
- If you already have a subscription model and want to change it, identify the aspects that are working well. Then double down on what’s working and change the elements that aren’t. This will help you create your unique subscription model
Types of subscription models:
1. Curated subscription box: Curated boxes are one of the most common types of subscriptions. The contents in each subscription box are somewhat handpicked and curated. The subscribers are given food items based on a theme or given the option to select the things they want to receive.
2. Customized subscription box: In the customized subscription box model, customers can choose the products they want to receive. Some customized boxes also offer flexibility, allowing customers to change, add or remove products from the boxes. This is a popular type of subscription used by meal subscription services.
3. Replenishment subscription model: Replenishment subscription model might not be the most suitable for food meal subscriptions but they can be an option. If you offer food boxes that consist of food items that customers reorder or refill frequently, for example, dry fruits, salads, meal plan ingredients, etc. then this model can be applicable. Replenishment subscription models automatically send refills on the scheduled date or when customers notify brands about it.
Step 2: Figure your products / meals
The next step is to set up the meals you want to sell. These are your products. The meals you offer are completely up to you and can also be your USP.
Customized meals: For instance, you may want to design a weekly meal plan that allows subscribers to add up to seven different meals in their plan. These could get repeated every week. In this case, you could put together 10 to 15 different options and subscribers could choose any seven. This type would be perfect for a customized subscription box meal plan.
Curated boxes: You could also offer curated meal box subscriptions. Here, customers do not get to select the dishes, but rather, you curate the meals for them. You can curate different types of meal boxes to offer variety to subscribers. For example, these could be based on cuisines or ingredients.
Theme/ cuisine-based boxes: A lot of meal box subscriptions narrow down to one type of cuisine. While it may appear that focusing only on one cuisine is eliminating potential customers, it actually makes your meal subscription service stand out from the competition. Given the abundance of food subscription boxes now available, it’s crucial to stand apart while still meeting a known demand.
Step 3: Set up different delivery frequency options
All subscribers may not want to subscribe for daily meal boxes. Offering options of delivery frequencies, such as daily, twice, or thrice a week, can give subscribers flexibility, freedom, and convenience. In return, your revenue increases because you’re catering to a wide range of customer preferences.
Besides the delivery frequency, you would also have to consider the time — lunch or dinner — as it is a food delivery subscription. Offer customers the option to choose both meals or any one. Again, offering this convenience means a good customer experience.
Step 4: Identify your subscription value proposition
The market is chock-full with meal subscription services. It means, unless you stand out, you might not be able to make the cut. That’s where your value proposition comes in. What are the perks, benefits, and overall advantages you are providing to subscribers?
Here’s how to create your value proposition:
- Define your value proposition before you start promoting your food subscription box model
- Define your objectives, goals, and brand voice
- Identify what your intended audience wants and expects from you
- Examine the value, advantages, and benefits you can provide to subscribers
Your value proposition will depend on the following factors:
- Financial advantages including savings and discounts from your meal boxes
- Community involvement, special events, etc.
- Exclusive access to promotions, new meal plans, seasonal food, etc.
- Feedback and reviews from customers so they can have a say in their food choices
Having a clear value proposition will also help you charge more for your meal boxes because you’d be offering something unique and special that generic food boxes don’t. You could focus on a pain-point or problem of customers to figure out your value proposition.
Step 5: Decide the pricing strategy for your meal box subscriptions
The selling price of your meal box subscription will be based on many factors. For example, cost of ingredients, labor, packaging, transportation, etc.
Hence, you can apply different strategies. Here are some options:
- Fixed cost: fixed cost pricing is a simple pricing strategy where prices remain constant for all your meal plans
- Tier-based pricing: varying costs for various customers. The tier-based pricing structure performs well when you have a wide range of subscribers
- Variable cost: it is determined by the products and delivery components. Prices of some food products may vary depending on factors including availability, season, freshness, etc. The variable pricing strategy works effectively for food meal boxes. For instance, customers can be charged more when they add additional items
Step 6: Dunning management
In subscriptions, customers pay periodically, for example, monthly or quarterly. But at times they might miss payments. The reasons could be, they forgot or their saved payment details are redundant, or their payment could get declined for some other reasons.
This is why you need to set up dunning management—it helps send instructions and messages, in real-time, to retrieve payment failures. Dunning management also helps retain customers that choose to stop their subscriptions.
Dunning management helps generate more income, save time, and reduce churn. You require an efficient subscription app that includes dunning management features, for example, Appstle Subscription and Loyalty app.
Step 7: Choose an efficient delivery partner
One of the most critical factors for your meal subscription service is delivery. As you will be selling meal boxes that have to be fresh and delivered on time, you must ensure your delivery partner demonstrates efficiency and capability.
Consider these factors when choosing delivery partners:
- Proper handling and product safety
- Accountability and prompt delivery
- Company standing and dependability
- Location and coverage specialization
- Technological prowess. For example, do they use apps and can their app integrate into your subscription app
- Their capacity to scale as your business grows
Step 8: Set up automated communication
Communication is the key to engaging your food meal box subscribers. But as your business grows and scales and the number of your subscribers increase, you will have to rely on automated communication to help you manage tasks.
These are some of the messages you could automate:
- Automate messages about order status
- Install an automated dunning management system
- Reminders for payments
- Message about delivery time and changes
- Thank-you messages
Step 9: Create a marketing plan for your meal box subscription
To attract and retain customers, you will need to put together a marketing plan. With so much competition in the market, you need a marketing strategy to run a profitable subscription business. Include the following elements in your plan for personal care subscription marketing.
- Offer incentives to new customers, such as offers and discounts
- Create a rewards or loyalty programme and combine it with the subscription model
- Create campaigns using a variety of platforms, including social media, SMS, and push notifications
- Share user-generated content on various platforms, such as social media
- Collaborate with micro and macro influencers in the personal care industry
- Run a referral campaign for your current customers
- Plan offline gatherings exclusively for your subscribers
- Monitor and optimize your marketing plan
Get started with your food meal box subscription model
To have a competitive edge in the food subscription box market, you will have to get many aspects in sync on your Shopify website. And for that, you will require an efficient Shopify subscription app that provides the required features and scalability capacities. To ensure your Shopify subscription model has all the features, explore Appstle Subscriptions and Loyalty app.