According to UnivDatos, the compound annual growth rate of the global subscription market is expected to be 73% from 2021 to 2028. The estimated value by the end of this time period is also slated to reach $2.64 trillion. The revenue potential alone is enough to convince many to use subscription plans for their eCommerce platform, but it has a lot of other benefits too.
If you’re debating adding a Shopify subscription app, this is the right post for you!
What is Subscription E-Commerce?
Globally, there are around 7,000 subscription box companies. These days subscription plans are taking over the E-Commerce world. But what is it? In a nutshell, it’s a convenient, personalized, and low-cost way to try new products monthly (or weekly, depending on the business) for a fixed amount. Customers get what they want regularly, and merchants on eCommerce platforms like Shopify get recurring orders with the subscription. It can also turn customers into lifelong customers and bring in predictable but greater Monthly Recurring Revenue (MRR).
What A Subscription Plan Should Offer
As attractive as the revenue potential of adding a subscription platform is, you can’t ignore the other benefits.
1. Predictable Recurring Revenue
A subscription plan’s greatest benefit is the recurring revenue. Customers sign up to receive products monthly, and businesses develop a steady and predictable revenue stream. When your revenue becomes predictable, it streamlines other processes for the merchant. Everything from forecasting to inventory planning will become easier. In addition, an eCommerce subscription like a Shopify subscription app will ask for the payment upfront (usually at a discounted price). This is great for the cash flow and provides new businesses with peace of mind.
2. Accurate Performance Tracking & Forecasting
The untapped potential of subscription programs is how they can help in accurate forecasting and track performance effectively. Forecasting is easier because of the recurring revenue system. Businesses can get a solid handle on what their profits will be from the number of customers signing up for the subscription service.
3. Inventory Management
With subscription eCommerce, inventory management gets easier. A subscription app for your Shopify store will make it managing your inventory a piece of cake because you’ll be able to purchase and know the exact amount of products you need to sell it forward.
4. Easier Customer Acquisition
Getting a customer is five times as hard as retaining one. It’s another reason why Shopify subscription apps are so popular. Subscribed customers mean you’ve already acquired them, and you’re not starting the new month with zero customers. Take AppstleSM as an example, it is a tool that can be used in eCommerce stores and on other websites as well. This lets people have the option to subscribe through multiple platforms and increase customer acquisition.
5. Better Customer Loyalty & Retention
Subscription apps for Shopify and other e-commerce platforms have a recurring nature. This creates a virtuous cycle and ensures regular purchases. Both of these things offer a deeper insight into the customer’s behavior. Businesses can use these insights to create even more personalized plans which will have the customers coming back.
It’s easier to retain customers with a subscription because they tend to be more loyal. This is because a subscription plan offers Customer Lifetime Value (CLTV). It also enhances customer relationships and prevents churn. Repeat customers also spend 67% more than new customers, which is why customer retention is an even bigger opportunity than customer acquisition.
6. Upselling & Cross-Selling Opportunities
Once a customer has signed up for a subscription service, it’s about keeping them. That comes from providing a good customer experience. These customers are also the prime target for selling additional merchandise. A good subscription app should let you make significant supplemental revenue through targeted upselling and cross-selling opportunities.
Subscription Business Models
There are various subscription business models, and which one is right for you depends on what kind of product you offer. Shopify subscription apps like Appstle℠ Subscriptions and Loyalty offer a build-a-box service so you can have all the benefits of a subscription app and customize it as per your needs.
1. Replenishment Subscriptions
In a replenishment subscription, a customer pays a set fee monthly for a replacement of an item. The selling point of replenishment subscriptions is the convenience rather than the excitement of the product. The most famous example of this is the Dollar Shave Club which is currently earning more than $100 million on an annual revenue run.
2. Curation Subscriptions
Curation subscription is what comes to mind when people think about subscription plans and boxes. It’s a package full of carefully picked items to surprise a customer. It can be a standard box or catered to the customer’s likes and dislikes. People find this exciting because of the personalized nature of the box and due to the opportunity of discovering new products. For example, Birchbox is a beauty subscription box that curates beauty products according to a beauty quiz every customer takes first. It earns $181 million annually in revenue.
3. Access Subscriptions
Access subscriptions let customers view and select specific services in exchange for a monthly or annual fee. This is used mainly by SaaS software providers. They usually have multiple pricing models and various levels of benefits.
Appstle℠ Subscriptions and Loyalty – A Shopify Subscription App That Does It All
If you’re starting an eCommerce business through Shopify, why settle for any Shopify subscription app when you can pick AppstleSM? The Appstle℠ Subscriptions and Loyalty is a comprehensive app with several features that have made it the best subscription app for Shopify. You can offer products and services to your customers regularly. The Appstle℠ Subscriptions and Loyalty is available at amazing prices with a 30-day free trial. You can also go with our conventional subscription options or build-a-box option. It can also be used on eCommerce stores and your own website to build a subscription plan.
Were you on a different app and want to switch to AppstleSM? We’ve even made migration easy for merchants. Start seeing recurring orders only with our Shopify subscription app. Become a partner or contact us for more information!