Table of Contents
Understanding the Concept of Subscription Products in Ecommerce
The Magento Approach to Subscription Products
WooCommerce’s Answer to Subscription Products
Shopify’s Subscription Products Management
BigCommerce’s Apps for Subscription Products
The Challenges of Setting Up Subscription-Based Products On Your Ecommerce Store
How Much Value Do Subscriptions Add to Your Ecommerce Store
How Subscriptions Increase Monthly Recurring Revenue
Consider Checkout Champ to Offer Subscription Payments
In the digital marketplace, the subscription-based business model is rapidly gaining popularity. Companies that offer a continuous supply of products or services in exchange for recurring revenue need ecommerce platforms capable of supporting these transactions. Magento, WooCommerce, Shopify, and BigCommerce are the four leading platforms, each offering unique ways to handle subscription products. But how exactly do they do it, and which one is the best for your business? Let’s delve into each platform to understand their approach to subscription products.
The allure of subscription models lies in their ability to create a win-win scenario for both parties involved. On one hand, customers relish the convenience and cost savings of receiving their favorite products automatically, without the need to re-order every time. On the other hand, merchants rejoice in the predictable, continuous revenue stream that these recurring purchases generate.
To cater to this business model, ecommerce platforms have risen to the challenge, providing features tailored to manage subscription products. These include capabilities for automatic billing, which takes the hassle out of payment collection for the merchant and ensures a smooth purchasing experience for the customer. Another crucial feature is membership management, which allows the tracking and organization of all active subscribers.
Additionally, these platforms often allow for subscription customization, enabling merchants to offer different plans and pricing tiers to cater to a wider range of customer preferences. Last but not least, automatic renewals are a cornerstone feature of subscription handling, ensuring that both the supply of products and the flow of revenue remain uninterrupted.
By understanding the nuances of subscription products, merchants can tap into their potential to foster customer loyalty and boost recurring revenue. As we explore how the big four ecommerce platforms – Magento, WooCommerce, Shopify, and BigCommerce – handle subscription products, this foundational knowledge will guide us in appreciating their distinct approaches.
While Magento is a powerful ecommerce platform known for its customization and flexibility, it does not natively support subscription products out of the box. Instead, it relies on extensions available from its vast marketplace to provide this functionality. Among these is the “Subscriptions and Recurring Payments” extension for Magento Cloud. Priced at $849, this comprehensive tool brings a range of subscription management capabilities to your Magento environment.
However, it’s worth noting that the installation of this extension requires the expertise of a developer, adding an extra layer of cost and complexity. Similarly, other extensions available for handling subscriptions on Magento come with their own costs and installation requirements. Despite these challenges, the extensive feature-set and flexibility of Magento, coupled with powerful extensions like the aforementioned, equip merchants to effectively manage their subscription products, while also providing the scope for tailored customization.
While WooCommerce operates as a free plugin for WordPress, managing subscription products requires an additional, yet powerful plugin, the WooCommerce Subscriptions. This plugin, though requiring a small investment, is feature-rich, serving as the backbone for managing subscription products in the WooCommerce ecosystem. With it, you can set up recurring payments, offer a taste of your products through free trials, and even create various subscription variations – all without any heavy lifting.
The plugin is highly customizable and offers the unique ability to present customers with several subscription options for a single product, elevating customer choice to new heights. Subscription renewals can either be handled manually, giving you full control, or be automated for a hassle-free experience. But the features don’t stop there! WooCommerce Subscriptions also includes comprehensive reporting tools, allowing you to keep a keen eye on your subscription activity, aiding in decision-making and strategy planning.
While Shopify’s all-encompassing ecommerce platform is a favorite among many merchants, it doesn’t directly support subscriptions. However, with the integration of apps like ReCharge Subscriptions, managing subscription products becomes a breeze. With ReCharge, you can wield tools for establishing recurring orders, designing adaptable subscription rules, orchestrating customer communications, and beyond. All of this functionality fits smoothly into your Shopify environment, providing a unified and simplified experience.
Shopify’s recent move of introducing subscription APIs deserves a special mention too. This step has allowed for a more ingrained, native handling of subscriptions within the platform. So, while you may need to extend your hand to third-party apps for managing subscription products, Shopify makes sure the experience is as seamless and integrated as possible.
BigCommerce, with its native support for subscription products, also relies on external apps to further enhance its capabilities. One such example is Bold Subscriptions. This app allows you to create subscription options with customizable frequencies, provide discounted pricing for subscription purchases, and offer incentives for customer retention.
However, installing and setting up these apps on BigCommerce can be a challenging task, requiring technical expertise to ensure everything works as expected. Another app, PayWhirl Recurring Payments, makes managing subscriptions easier by enabling automated billing and payment schedules, customer account creation, and email notifications. It also has a widget system for easy integration. However, customization of the widget may require advanced knowledge of HTML/CSS. Nevertheless, with the right apps and a bit of setup, BigCommerce can provide a robust, feature-rich environment for managing subscription products.
Setting up subscription-based products on any of the big four ecommerce platforms – Shopify, Magento, BigCommerce, or WooCommerce, can be a challenging endeavor, especially for new merchants. A major hurdle that’s common across all these platforms is the necessity of integrating a third-party application service to handle subscriptions. This adds an additional layer of complexity as it often requires customization of the checkout process or site elements to ensure smooth functionality.
Another limitation that merchants may face is the restriction to a single payment gateway, imposed by some of these apps, thus constraining flexibility in payment options. One-click upsells – a powerful tool for converting one-time purchases into subscriptions, might not be available across all platforms, potentially missing out on valuable revenue opportunities. Despite these challenges, understanding these potential obstacles can equip you to tackle them head-on and make the most of the subscription-based business model on your chosen ecommerce platform.
Adding a subscription service to your ecommerce store can greatly enhance your bottom line. McKinsey reports that the subscription ecommerce market has grown by over 100% annually over the past five years, indicating a robust potential for revenue generation. Subscriptions work particularly well for consumable goods or services that customers need or use regularly. For instance, specialty coffee, gourmet foods, beauty products, and digital services like software or media streaming are ideal for subscription models.
They offer a consistent, predictable income stream and help to retain customers longer, thus increasing lifetime value. A study by Zuora also found that businesses with a subscription model grow their revenue about 5 times quicker than their S&P 500 counterparts. Moreover, subscribers are more likely to purchase additional products, providing upselling opportunities. Therefore, by integrating subscription functionality into your ecommerce platform, you can tap into this growing market, boost your revenue, and build a loyal customer base.
For example, a skincare brand that adopts a subscription model can provide their customers with a monthly supply of their skincare products. This will not only create a predictable income stream for the business but also save the customers the hassle of re-ordering every time they run out, making them more likely to stick with the brand..
In essence, subscriptions transform sporadic shoppers into a predictable source of income. Imagine this: A customer who purchases from your online store may or may not return for future shopping. But, a subscriber is a guaranteed monthly transaction. This stability bolsters your cash flow and provides a clearer financial forecast, essential for sustainable business growth.
Plus, it’s easier to budget for customer acquisition costs when you can predict a customer’s lifetime value with higher accuracy. Furthermore, customers on subscription plans are less likely to churn, as they enjoy the convenience of automatic renewals and consistent product delivery. This nurtures brand loyalty and cultivates a lasting customer relationship. By leveraging the power of subscriptions, your ecommerce store can experience a steady increase in monthly recurring revenue, accelerating your journey towards profitability and success.
Looking for a seamless solution to offer recurring subscriptions on your ecommerce store? Consider Checkout Champ. As an integrated solution, it effortlessly replaces your store’s existing checkout, simplifying the journey towards launching subscription products. With its support for recurring payments, Checkout Champ provides a sturdy foundation for your subscription-based business model. What’s more, it enables your customers to conveniently convert a one-time purchase into a recurring subscription at checkout – a valuable feature that can amplify your subscription base. It fits perfectly into your site, enhancing the checkout experience while providing you with the flexibility and power to grow your recurring revenue. Don’t let the challenges of implementing subscriptions on your ecommerce platform deter you. Embrace Checkout Champ and tap into the lucrative subscription market with ease.