It is no secret that the COVID-19 global pandemic will have long lasting implications for the economy and the world at large. As the situation is rapidly changing, so is consumer behavior.
Shoppers who once strolled for hours in shopping malls are having to browse online instead. Moviegoers who frequented cinemas and theaters are scrolling through their streaming devices for new entertainment.
As many of us continue to be in lockdowns, nonessential businesses are being ordered to close making both shopping and essentials more difficult to shop for. Naturally, this pandemic has caused a large shift in online shopping. In fact, globally, 49% of consumers shop online more now than they did pre COVID-19. However, it has also caused shifts in buying patterns, specifically for businesses who offer subscription products.
Prior to COVID-19, subscription-based businesses generated between $12 billion and $15 billion in sales. While many retailers have been negatively impacted by the pandemic, subscription businesses have shown growth across multiple verticals.
A survey conducted by Coupon Follow showed that 20% of US consumers have purchased subscription boxes during COVID-19, specifically those in self-care, wellness, food and meal kits.
Other studies, including those from Recurly illustrate that although the pandemic caused discretionary spending in the first month, April saw a growth of 85% in new subscriptions and a overall growth of up to 145% in Consumer Goods.
With subscription-based businesses continuing to grow even during unprecedented times (and researchers theorizing subscription services will make up 75% of DTC brands by 2023) this is the time for businesses, both small and big, to look into subscription models or add-on subscriptions.
Aside from the growth of subscriptions in the past year, there are several benefits to offering a subscription model or subscription products. These are:
With any Ecommerce store, predictable revenue is often hard to determine. Customers can churn quickly causing you to spend more time and resources to acquire new customers. Not to mention that acquiring a new customer can cost 5-10 times more than retaining an existing customer.
By using subscriptions, past customers are repeatedly purchasing, allowing the store to generate consistent revenue and become more profitable.
But what type of subscription model is right for your store?
If you’re a new business looking to start off a new subscription store, then you’ll want to research three different models to get you started.
The most common of the subscription business models, these boxes usually provide curated products. However, its true unique selling points are sending new items with uniquely personalized experiences. At the moment, there are many popular stores that dominate the market making it more difficult to penetrate.
However, new platforms like Cratejoy have allowed smaller businesses to test the subscription box ecosystem.
This model is built for convenience and cost savings. Replenishment subscriptions allow consumers to automate the purchase of essential items, usually at a discount. This is commonly seen in razors, diapers, vitamins, pet food and much more.
Because these products are essential, there are generally higher conversion and retention rates, as the process is mostly effortless for consumers.
These subscription businesses offer access to unique products, lower prices or member-only perks for a monthly fee. Normally this model offers exclusivity to consumers which in turn can allow for greater customer loyalty.
For stores that already offer one-time products, but would like to transition into recurring subscription products, there are a variety of tools and resources that can help you explore the subscription ecosystem without having to commit to one revenue model or pivot your store.
Regardless of which model you choose, it’s important to ask yourself these questions:
And most importantly:
Luckily, to help you cut down time and get you closer to your end goal – making money with subscriptions – we’re sharing our list of the best subscription tools specifically for Ecommerce stores.
The Best Subscription Apps for Ecommerce
The Best Subscription Billing Platforms
The Best Payment Processors with Recurring Bill
The Best Subscription Commerce Platforms
Analytics for Subscription Businesses
Best Add-Ons for ReCharge, Stripe or Braintree
If you’re a store that is currently operating on an Ecommerce platform like Shopify and doesn’t want to make the switch to a subscription platform, there are a variety of subscription apps that can be integrated with leading platforms.
These tools allow you to transition one-time products into recurring subscription products, while allowing for a seamless experience both for the consumer and yourself.
Although there are several subscription apps designed for leading Ecommerce platforms, we wanted to focus on those that offer:
Let’s take a look at three tools that will help your store easily transition from one-time products to recurring product subscriptions. These are:
Dynamic Recurring Billing Platform
ReCharge offers a seamless and effortless solution to transform your one-time products into recurring subscription products. With a powerful merchant and customer portal, subscriptions can be easily managed, analyzed and customized.
While the program integrates with leading Ecommerce platforms like BigCommerce, Magento, and WooCommerce, the company has continued to build a comprehensive solution and seamless experience specifically for the Shopify platform.
With Shopify’s new checkout API integration, ReCharge does not currently support self-service setup. Upon install requests, merchants will be added to a waitlist and onboarded accordingly.
For all other platforms, Recharge Payments offers a 60-day free trial. Plans begin at $60USD per month with plus 1% + 5¢ per transaction. Its Pro plan which features a custom domain, enhanced analytics, customized customer portal and Avalara integration begins at $300USD per month with plus 1% + 19¢ per transaction.
Customizable Subscription Program
Bold Commerce specializes in a variety of Ecommerce apps, including subscriptions. The app provides more flexibility for subscription models that require upsells, discounts and single purchases allowing stores to fully customize their subscription model and process. Bold subscriptions also offers stores the option for prepaid and gift subscriptions.
Subscriptions currently integrates with over a dozen payment gateways on Bigcommerce, Commercetools and Woocommerce. However, it only integrates with Shopify Payments on Shopify.
Bold subscriptions offers a 60-day free trial. Their plan begins at $49.99USD per month + 1% of orders containing subscription products.
UPDATE: Both ReCharge and Bold Subscriptions have been recently upgraded to integrate with Shopify’s new API that allows partners and developers to build new subscription experiences directly within Shopify’s native checkout. This is a groundbreaking update that will allow consumers to experience a one-time checkout regardless of whether they’re purchasing a one-time or recurring product.
Prior to this update, both ReCharge and Bold Subscriptions used their own Shopify emulated checkouts to process subscriptions.
Enterprise Level Subscription App
Ordergroove provides an all-in-one solution for mid-sized to enterprise level businesses looking to build their recurring revenue stream. Powered by their trademarked Anticipate AI, the app provides personalized offers to reduce churn rates and increase subscriber retention across your stores’ most valuable channels.
Request a demo for pricing.
For any store that is looking to add simple subscription options, recurring billing or auto-invoicing there are also a few subscription billing softwares that can help.
Although originally developed for SaaS businesses, more Ecommerce stores (specifically those operating with headless commerce) are searching for more flexible subscription options that meet their customers’ needs.
Both Chargebee and Recurly are subscription billing platforms that offer more complex solutions. They also offer:
SaaS Subscription Billing Software
Chargebee is a subscription billing software that allows end-to-end recurring billing, subscription management and auto invoicing. Although built originally for SaaS businesses, the company has shifted to providing an Ecommerce subscription solution as well.
Like other leading subscription billing software, Chargebee can synchronize data with Shipstation, WordPress and Shopify. It is also fully customizable via API & webhooks, which makes it an excellent choice for headless subscription commerce.
Request a demo for pricing.
Headless Subscription Billing Management
For subscription-based businesses who are operating on headless commerce, Recurly is a robust subscription billing and management platform that has experience integrating with a variety of tech stacks.
Building on leading subscription apps within the Ecommerce space, Recurly also offers one-time purchases and subscriptions in the same checkout flow. This allows stores to offer subscriptions and one-time products in the same transaction.
Recurly offers a free trial. Request a demo for pricing.
Along with subscription billing platforms, there are also several common payment processors like Stripe and Braintree that have introduced recurring billing over the years.
Although some of these platforms are more basic in subscription offerings and lower cost, there are some more advanced options for users already using 3D Cart, Magento, Bigcommerce or Woocommerce.
Both Stripe and Braintree are payment processors that offer recurring billing. They also offer:
Already a leading payment processing platform that integrates with several Ecommerce platforms, Stripe also offers businesses the opportunity to accept recurring payments.
Although the platform can be easily integrated within any SaaS or marketplace to manage recurring orders, many popular subscription apps like ReCharge and sticky.io already use the platform for recurring order payment processing.
For all recurring charges, Stripe charges 0.5% on their most basic plan. For a custom built scale plan, Stripe charges 0.8% on recurring charges.
Similar to Stripe, Braintree is an online payment gateway created by PayPal that allows Ecommerce transaction processing, including those with repeat payments. Both small and large businesses can set up custom pricing plans for customers that include discounts, add-ons, promotional periods and rewards.
Braintree also helps reduce churn rate with its own Account Updater, a feature that updates users’ card details automatically whenever information changes.
Request a demo for pricing.
If you are a relatively new business or looking to start a new subscription store (specifically a subscription box) you might want to consider an all-in-one solution designed specifically for the subscription model.
Although many Ecommerce add-ons, recurring billing platforms and payment processors offer options that can easily handle subscriptions, there are some benefits to sticking to a platform that was built specifically for subscriptions such as:
To give you a better idea of the subscription platform ecosystem, we’ll take a look at the following most popular offerings:
Subscription Marketplace For Small Businesses
Although there are many Ecommerce platforms that provide subscription tools to convert one-time products into recurring subscription products, Cratejoy was specifically created to be a marketplace for smaller subscription box brands.
The platform offers a variety of options including listing on the marketplace, using Cratejoy’s checkout and back-end only or an all-in-one solution that includes a custom website and subscription tools.
If you’re a small business looking to get your feet wet with the subscription ecosystem, Cratejoy can be an affordable option.
All listings on Cratejoy are free, but carry a 11.25% + $0.10 transaction fees. For businesses looking to use their subscription checkout only, the fee is $19USD per month and a 1.25% + $0.10 transaction fees. For businesses looking to build their website on the Cratejoy platform, the fee is $39USD per month and 1.25% + 0.10 transaction fees.
Subscription ECommerce Platform
While Cratejoy offers a marketplace for subscription businesses, Subbly is specifically focused on selling subscriptions either through its hosted platform or by embedding its checkout on any existing website like Wix, WordPress, Squarespace and even Shopify (although this will not be as streamlined).
The platform offers over 50 features including flexible subscription billing, build-a-box solutions, order management and much more.
All plans offer a 14-day free trial. For checkout only, Subbly offers a $14USD per month plan when paying yearly. The platform also offers a website and checkout plan for $29USD per month when paying yearly.
For automations, inventory tracking & management, white labeling (removing the Subbly logo) and cart abandonment, businesses must purchase these as add-ons.
Enterprise Subscription Ecommerce Platform
sticky.io is a unified Ecommerce platform specifically designed for advanced order management and recurring billing. Built for enterprise stores, specifically those who choose headless commerce, the app organizes and manages multi-channel selling while offering customized checkout experiences that integrate with any front-end storefront.
This is particularly useful for enterprise level subscription brands that require unique subscription and checkout customizations.
Request a demo for pricing.
Perhaps you’re wondering whether you should start offering your customers subscription products?
With any Ecommerce store, we always suggest exploring platforms that can lend advanced reporting and actionable insights. By exploring strengths and weaknesses of your store (primarily through data), you can develop new retention strategies that fuel your store’s growth.
Many of these analytical tools are also beneficial for stores that are currently selling subscriptions by offering several reports not available through Ecommerce platforms or subscription tools like:
Our top 3 tools for delving into subscription and retention data are:
Pricing and Retention Solutions for Enterprise Subscriptions
Although primarily designed for mid-sized and enterprise subscription business, ProfitWell helps all businesses identify their subscription model strengths and weaknesses through free financial reporting.
By analyzing recurring revenue growth, cohorts, segments and comprehensive benchmarks, businesses are able to make faster and smarter decisions to further growth and drive retention.
ProfitWell Metrics is 100% free forever. For all other products, request a demo for pricing.
Hyper-Segmented Analytics
If you’re looking for more advanced reporting and analytics outside of the Shopify dashboard, Peel Insights offers automated analysis of over 35 key Ecommerce metrics. The tool can be easily set up for any Shopify store and can integrate with ReCharge to analyze customer retention and subscriptions.
All plans start with a 30-day free trial. Peel’s most popular “Medium” plan begins at $99 per month and includes 501-2k orders per month. For 80k orders or more, stores will require a custom plan which is over $799 per month.
Prebuilt Customer Segments
For stores looking to delve into customer data, create advanced segmentation and sync across multiple marketing channels, Tresl is an excellent option. The tool also provides a wealth of insight for stores that are considering a subscription model by offering 30+ prebuilt customer segments and actionable insights.
For small businesses generating up to $200k USD annually, Tresl offers a $79USD per month “Small Business” plan that includes 1 year of data analysis, $5,000 users/segment and email channel integration. It’s “Growth” plan, recommended for businesses generating up to $1M USD annually, offers 2 years of data analysis, 25,000 users/segment as well as email channel integration and priority data processing for $239USD per month.
If you’re looking to use or already using ReCharge, Stripe or Braintree for your subscriptions, there are a number of add-ons that can improve your retention rates.
For these apps, we’re particularly focused on:
Our top choices are:
Subscriptions Churn Prevention
This app is a must for any store using ReCharge, Stripe or Braintree for subscriptions. By using a mix of charge attempts, high-quality email outreach, support escalations and SMS, Churn Buster is able to recover more failed payments while preventing customer frustration.
Churn Buster pricing is based on monthly recurring revenue and offers a 14-day free trial.
Build-A-Box for ReCharge
Looking to offer customers the option to build their own box subscription? Rebundle is a Shopify-centric app made for ReCharge that offers customization at a consistent subscription price.
Developed with a clean, intuitive design it seamlessly integrates into any Shopify store.
To offer up to 5 bundles to 1000 customers, Rebundle charges $100USD per month. For stores looking to offer unlimited bundles to unlimited customers, both the Premium plan at $150USD per month and the Premium Plus plan at $180USD per month are more appropriate. All plans require a $1,000USD setup fee.
Pre-Shipping Reminders for ReCharge
Specifically designed for stores using ReCharge, ARPU offers pre-shipping email reminders 3 days before a subscriber’s next billing cycle. Not only does this help reduce churn rate and increase revenue, but ARPU also offers upsells within its emails to help increase average order value.
ARPU offers a 14-day free trial and $0.05 per active subscriber (with a minimum of $40USD per month). Custom pricing is offered for stores with over $10,000 active subscribers.
With subscriptions growing, this is an opportunity to assess whether you’d like to start a new subscription store or offer recurring subscription products.
With any subscription model, it’s important to think critically about your store and the resources available to you.
For example, will you have the logistical capacity to handle both one-time and recurring products? How will you market these subscriptions to new consumers and past purchasers?
It’s important to keep in mind that building a subscription model or moving to subscription products can be challenging, yet there are several tools (as mentioned in here) that can help you make the transition.
