Subscription eCommerce

The CEO of Carthook, a popular Shopify plugin that enables stores to offer upsells at checkout, previously ran an online store business. He famously stated, “If I were starting my online store again, I would insist with my partners that we sell everything as a subscription.”

Subscriptions provide many advantages: a steady revenue stream, reduced advertising costs, and higher lifetime value (LTV) per customer. They are a retailer’s dream. Although not all products are suitable for subscription, many are. Even seemingly non-obvious products, such as fashion, can sometimes be transitioned into subscription models. For example, some companies send customers curated boxes each month—products they can keep or return—upon paying a fixed monthly fee. Essentials like medications, cleaning supplies, personal hygiene products, coffee, and other consumables that are replenished regularly are also prime candidates for subscriptions.

Subscription offerings can range from simple to complex. Some products can be offered as either one-time or subscription purchases, often with a discount. For instance, toothpaste can be a simple subscription: a checkbox plus a dropdown for delivery frequency. Apps like Recharge Payments and Bold, which integrate with Shopify, can set up these simple subscriptions quickly.

More complex subscriptions may involve customization. For example, a Keurig coffee maker allows customers to create personalized boxes with different coffee flavors. Customizing and editing these boxes requires additional development, but many companies find the investment worthwhile, as it significantly increases sales of coffee pods.

Unique strategies can further boost subscription revenue. For example, since most subscribers cancel within three months or less, offering prepayment options at a 20% discount for the entire year can encourage longer retention. Another effective tactic is trial-to-subscription conversion: allowing customers to purchase a discounted sample, which, if they don’t cancel, automatically converts to a full-priced recurring subscription.

In summary, online subscription stores often generate higher revenue due to lower customer acquisition costs, increased LTV, and more predictable cash flow.

For more information or tailored advice for your business, feel free to reach out.

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