Recently, Shopify has introduced a product subscription extension that helps businesses create automated subscriptions with code-level customizations. This means that Shopify merchants who want to offer subscriptions without coding still need third-party apps. Based on our experience helping brands offer subscriptions in their Shopify store, we will share key considerations for online retailers, from small businesses to global brands with 3PL integration requirements. While our examples are based on the Shopify ecosystem and the ReCharge app, the key ideas can be applied to any cloud ecommerce platform and subscription solution.

Businesses That Can Benefit from Subscriptions

While subscriptions may be traditionally associated with print media, ecommerce platforms (sometimes known as online store builders) like Shopify give businesses the flexibility to take their retail models further with powerful features such as sales and marketing channel integrations. In 2020, the pandemic has brought a sea change shift to online retail with traditionally offline-first businesses building online stores to reach existing and new customers. A Shopify store is not only for single unit retail items, but can be used for services and experiences, as well as subscriptions and recurring payments. You can also offer subscriptions alongside single unit retail items. Below are some businesses that could make use of subscription models:

• Food and Beverage: grocery boxes, snacks, coffee and tea, pet food
• Restaurants: weekly home-cooked meal ingredients
• Print Media: publications and magazines
• Bookstores: monthly book club or surprise bundle
• Content Creatives: get paid directly for your work
• Home Essentials: cleaning agents
• Health and Wellness: skincare products, nutritional supplements
• Experiences: workshops and classes

How Subscriptions Can Work on Shopify

Currently, merchants looking for subscription solutions can find various third-party subscription solutions on the Shopify Marketplace and Shopify’s subscription overview information as well as a product demo in their June 2020 ReUnite online event. While some subscription solutions may specialize in recurring payments, others may offer subscriptions as part of a wider set of ecommerce services that may or may not suit your business needs in your target markets (including ones that require language localization).

While subscriptions may save both merchants and customers time by offering automatic purchases, these automations need to be integrated into your existing store operations to offer a positive customer experience. We generally advise that merchants consider the following when considering solutions:

Storefront Integration: how does the subscription service display to shoppers when browsing, or when logged in to their Shopify account?

• Logistics: how will the solution integrate into your existing order fulfillment?
• Inventory: how are recurring orders made and is your inventory updated?
• Communication: how does the app send notifications to customers?
• Offers and Discounts: can discounts or coupons be applied to subscriptions?

• Integrations and Customizations: what is the extent of support for third-party app integrations or code-level modifications to match your store?

We will discuss each of the above considerations in later sections of this post, using the ReCharge app and screencaps as an example for features discussed. Note that depending on your chosen subscription solution, information display, order handling, and customization options may differ from what is described in this post.

Useful Features for a Subscription Solution

The ReCharge Merchant Console to set subscription discounts and intervals

In addition to the high-level considerations for a subscription solution, key details in an app can increase its user-friendliness and effectiveness. Based on our experience working with and customizing ReCharge for our clients in Hong Kong, below are features that we felt stood out for this third-party solution:

• Extensive Merchant Console: includes orders, customers, rules, integrations, and analytics
• Intuitive Customer Portal: for customers to update, add, or cancel subscriptions
• In-Store Integrations: displaying subscription offers and logins directly into your existing Shopify store
• Automated Sales Cycle: optional e-mail automation for notifications
• Multi-language Support: interface for translation and text input throughout the subscription checkout and customer portal
• Store Styling Customizations: make code-level customizations to your subscription interface to match your store

Storefront Integration and Customer Experience

ReCharge uses English by default by allows translation into other languages such as Chinese

Ideally, your subscription solution should automatically allow you to display a subscription service in your Shopify store. You can expect subscription information to display in:

• product pages that have subscription options
• checkout and payment
• a customer’s store account

If using ReCharge, merchants can offer customers a percentage discount (automatically calculated) as well as a delivery interval for subscriptions, which is usually displayed right under the regular product price. The subscription options can be directly selected from the ReCharge merchant admin console in your Shopify account. Once a shopper has selected the subscription option, they will be brought to a checkout that is powered by ReCharge, which can be modified to match your online store theme for consistency. A customer who has completed the checkout will then be billed based on their subscription cycle and receive email notifications when items are shipped out (if this feature is activated). Finally, a customer can also see and modify their subscriptions from their Shopify account on your store. If a customer has made a subscription on your Shopify store without opening an account, they will automatically be given a subscription account, which they can access from your online store.

Order Fulfillment Logistics for Online Subscriptions

When you are planning to launch your online subscriptions, your logistical integration should be your first point of consideration. How does your business currently do order fulfillment and is the method scalable? For example, if you are manually printing shipping labels, what order volume can you manage to ensure customers get their deliveries in a timely fashion? As a general rule, the more automated your order fulfillment process is, the more you may be able to benefit from a subscription model, as you can grow your business without additional costs.

If you are a larger business, do you have in-house inventory management and delivery solutions, or are you using 3PL solutions that need to be integrated? Depending on your subscription solution, an order can be passed through your Shopify store, which may already be integrated into your order fulfillment system. If you are managing larger inventories and need to handle SKU numbers, please also read the inventory section to better understand how a subscription solution like ReCharge can support your existing operations.

Inventory Management for Subscriptions

Inventory management becomes key to a successful subscription model. When you are looking for a solutions provider, pay special attention to how they:

• Create orders
• Check inventory for availability
• Handle out-of-stock situations or refunds

In general, a third-party subscription solution on Shopify is helping your store create recurring individual orders. How each solutions provider does this may differ.

ReCharge creates dummy clone items in your store and uses them as a way to reference and order the original item in stock. Once a customer has joined a subscription, ReCharge will check before every order is placed that there is enough inventory in your main store to deliver the goods. If there is not enough supply, ReCharge can automatically notify the customer and there will be no charge. This type of automated handling is essential for a smooth handling of high volume orders and customer expectation management.

Automated Communication for Orders, Cancellations, and Refunds

Optional ReCharge order notifications

Clear confirmation, notices, and update options are essential for managing customer expectations and building trust.

To begin, look for a subscription service that enables you, and ideally your customers as well, to easily cancel or modify a subscription because it will remove manual work as well as potential frustration. Next, check what communication options your subscription provider offers and whether they allow you to turn certain customer notifications on and off or create your own custom messages. Finally, see what additional features the service has, such as showing customers a record of past transactions or offering retention strategy features.

Using ReCharge as an example, both customers and merchants have an interface to cancel or make new subscriptions, as well as skip the next delivery. The app also allows merchants to create rules such as a minimum lock-in period and turn on automatic notifications for customers who have made changes to orders or account information. Notably, the app offers a powerful customer retention feature that asks customers cancelling a subscription for the reason and displays relevant alternatives (such as skipping a next delivery if they selected an “I have enough” option).

Offer And Discount Coupons For Subscriptions

Your third-party subscription service should ideally mirror the same types of tools your Shopify store has to make sales, such as discount and offer coupons. It is likely that your third-party provider will not automatically link up to your active Shopify store codes, but there some solutions providers have easy workarounds by offering code creations.

Merchants using ReCharge could create two identical codes, such as “NEWYEARSALE” in the main Shopify store console and the same code in the ReCharge admin console coupon section. For a customer, they will enjoy the same discount whether they select a single item or a subscription even though these are two separate codes.

Third-Party Integrations and Code-Level Customizations

ReCharge app integrations

Finally, in order to deliver a cohesive brand experience, you might consider making design customizations to the ReCharge interface to match your brand as well as add integrations to other ecommerce apps in your store.

To ensure that your customer experiences your subscription as an extension of your store, you will want to see if you can customize sections that are displayed to your customer. This could include on the product page, checkout page, or even subscription customer portal. For example, you will likely want to see if you can add your logo, brand colours and store font to the checkout. Some solutions providers may have an interface for you to make these changes or upload images while others may require code-level changes. If you do not have engineers on your team, you may want to consider hiring one for a one-time setup to create a seamless shopping experience between your regular purchase items and subscriptions.

Popular ecommerce apps will usually have a section that lists their third-party integrations, so look for ones that support the other third-party solutions you may be using. Examples can include a newsletter app that has an out-of-the-box integration or an enterprise 3PL that requires custom integration. For example, if your subscription and e-mail services can be integrated, you can offer customers a more consistent set of e-mail notifications and newsletters. Run an actual order with your subscription app to see how data is passed to other apps that should be integrated to see if it meets your needs.

Next Steps

As consumers increasingly turn to online shopping, subscriptions will become increasingly valuable for businesses to attract and retain customers.

Where possible, use a free trial and create a subscription to fully understand how an order is made, taken from the inventory, passed on for shipping and fulfillment, and modified. You can check how well a service integrates into your storefront, the interface provided to both merchants and customers and customizations available for display language, code-level changes to the design, and third-party integrations. Finally, explore how more sophisticated features such as coupon code handling, order rules, and upselling or cancellation handling can help increase sales as well as customer retention.

To get started, explore the various subscription solutions available at Shopify’s online marketplace. If you have a developer, then you can also check Shopify’s Subscriptions API migration guide.

If you would like to offer subscriptions for your Shopify store or use ReCharge, feel free to reach out to us directly via chat to discuss your options!

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