The 2024 Subscription App Arms Race

The 2024 Subscription App Arms Race

With Shopify's announcement of discontinuing 3rd-party subscription checkouts in 2024, the hunger games for subscription apps have officially begun. This announcement is sure to wake up the Recharge & BOLD merchant base. I'm estimating 5-10k Shopify merchants will have to leave their legacy 3rd-party subscription checkouts, and start planning their subscription app migration in 2024. To help merchants decide, it will be key for subscription apps to outline a unique selling proposition and communicate it very clearly. And with 30+ subscription apps on the Shopify app store aggressively fighting for merchants' business, the air is thick with competition.

This subscription app arms race provides opportunities and challenges for both merchants and apps, so let's see what info we have to help us capitalize in 2024.

2023 moments that define 2024:

  • Shopify announced the discontinuation of 3rd-party checkout order processing as of October 2024, affecting thousands of brands. By my estimate, about 5-10K brands on Bold + Recharge are being forced to migrate, given that even "staying" with their current subscription app still requires a migration to the Shopify Checkout. Not all merchants are thrilled with this, from John Roman, CEO of Battlbox:

"I understand the move to discontinue 3rd party checkouts, but I find it very odd that Braintree is not allowed. Puts a few dozen larger merchants in a precarious spot. I wonder if this is a move that Stripe lobbied for." - John Roman, CEO of BattlBox

  • Although Recharge made migrations between both versions of the Recharge app pretty seamless (both Recharge versions are virtually identical), Bold is yet to provide feature parity for their merchants to migrate from the "Bold Subscriptions" to the "Bold Subs for Shopify Plus" app. Bold is in a tougher spot than Recharge here, however, both user bases are seriously assessing every possible edge for growth in 2024, including other subscription apps.
  • Dollar Shave Club and Chubbies picking Ordergroove over Recharge. Overall, it was a massive win for Shopify to land those brands, but it can be seen as a setback for Recharge, being the enterprise-level incumbent. The Chubbies move has backfired since tho, resulting in a MeUndies v Ordergroove lawsuit over "unusable app". Will losing both deals shift more of Recharge's focus towards enterprise? Leaving mid-market and SMB up for grabs to other subscription apps? We'll see in 2024. Recharge however is not looking to pick a vertical to compete in, more on that later.
  • The feature arms race went into full overdrive in 2023. New flagship retention and analytics features were released almost every quarter from the top app players. Advanced churn analytics, customizable dunning, conditional cancelation flows, and surprise & delight functionality have all become the new table stakes for subscription apps in 2023. Even Recharge, although lagging with product updates in 2022, kept pace with nimble and hungry startups in 2023.
  • Shopify's own subscription app. Although Shopify's own apps for email, reviews, returns etc, are very basic and won't be a threat to the flagship subscription apps, it will put pressure on the 10+ low-cost leader subscription apps to step up their game, which will only put more pressure on the mid-market apps.

This arms race brings clear wins for merchants. Being showered with new features in 2023 was a welcome sight for many brands. However, in 2024, merchants are looking for every possible edge to grow, with many brands seriously considering a new subscription app. I regularly chat with merchants who are already on Shopify Checkout and who are unsure if their current subscription app is their best long-term choice. I suspect I'll be having a lot more of these conversations this year given the 3rd-party checkout October deadline. So what's in store for 2024? Let's dive in...

2024 App Predictions: Who Ends Up On Top?

Recharge: the giant awakes

With Dollar Shave Club and Chubbies going to Ordergroove and the urgency to migrate thousands of their own merchants to Shopify Checkout before October, their team has a lot on their plate this year. Will Ordergroove continue winning deals over in 2024? Will Recharge merchants fall victim to "greener on the other side"? 2024 will be a critical time for Recharge to refine their competitive strategy and clearly communicate their unique value proposition to their existing merchants and to new ones.

I recently chatted with Recharge's newly minted SVP of Marketing - Jen Gray (ex: SVP of Marketing FilevineAdobe). Her hire, in itself, is a move in the right direction, showing that Recharge is serious about beefing up their marketing this year. This is what Jen shared when I asked about Recharge's plan to compete in 2024:

"We want to be the best at data. We don't see the feature arms race as the solution. We want to provide merchants with directionality for their business, not just be a bag of tools. We don't want to just say "we have 20k merchants, come work with us". We have 20k merchants, and we have data on what works, and what doesn't. These core insights will be foundational to the product. Recharge has always been a product-led company, and I find myself in a lucky position to get to tell that story now." - Jen Gray, SVP of Marketing @Rechange

This level of clarity coming from Recharge was very refreshing. To speak of Jen's caliber, coming from someone just three months on the job, Jen lays out a genuine insight: Recharge is in a completely unique position to every other app given the amount of subscription data they have access to. With the right people and funding (is $277M in 2021 be enough?) 2024 might just be the year for Recharge to use this data and set themselves onto a breakaway trajectory from competitors.

With 2023 also being the year that AI and LLM hit the mainstream, it's hard not to get excited at the prospect of Recharge rolling all their data into an AI-powered feature set. However, despite much of the initial ChatGPT, ML, and LLM hype, we have seen a very slow rollout of "AI" products to market.

It's tough to predict where this "data" approach takes Recharge. Will this "best at data" strategy start slow and safe? Starting with improved analytics and industry benchmarks? Is this what Jen means by "directionality"? So far "industry benchmark" features from platforms have been quite lackluster, if not outright useless, think Recharge's own Analytics > Benchmark tab, Klaviyo's benchmark reports etc. Perhaps the new conversational AI was the missing X factor?

What I want to see is Recharge go full Shopify Sidekick. It would be flipping hard not to get excited about an AI-powered subscription assistant trained on thousands of merchants and contextualized by the brand's own data.

Both the slow and safe and sidekick strategy are gambles, but I personally would love to see Recharge take the innovative and truly creative Subscription AI assistant route.

Regardless of how Recharge plays this "best in data" card, I believe that by simply making this messaging loud and clear to existing and new merchants, is enough to create a serious uphill battle for the rest of the subscription app companies chasing Recharge.

However, I'd feel like I'd be letting Recharge off the hook too easily if we ended it there. Despite all the recent feature rollouts and the potential for a pretty exciting future, the general merchant consensus is still fairly apathetic, if not negative towards Recharge. Recharge issues still ring true for many merchants: feature limitation, clunky bulk editing, outdated design decisions, data & reporting issues, etc. All this left a lot of merchants with a "half-baked" taste over the years. I'm not sure if Recharge has an internal NPS they monitor, but from my experience of talking to merchants, the general sentiment its mostly passives & detractors. This, combined with some deeply ingrained human psychology of "grass is always greener," means that 2024 will likely continue to be an uphill battle for the industry leader.

BOLD: the comeback kid?

BOLD Subscriptions is planning a strong comeback in 2024. Bold has had big shakeups with multiple rounds of layoffs in the last 3 years. The company made serious C-suite changes in 2023, bringing in a new CEO (ex: Intuit, Paypal) to replace one of the co-founders. Shopify was Bold's initial springboard for growth as one of Canada's fastest-growing companies, but the company pivoted looking at a larger future off-of Shopify with their headless Checkout, which over the years has led to many of Bold's Shopify apps getting shelved or sold off. From 20+ Shopify apps and +700k app installs in Bold's Shopify heyday, Bold now only lists 8 Shopify apps on their website now - "Bold Subscriptions" being the standout with over $2.8B in processed GMV.

While Recharge took all of 2022 to rebuild their original app on Shopify's Checkout with identical feature parity, making migration from Recharge v1 to Recharge on Shopify Checkout the easiest migration available, it's a different story with Bold Subscriptions.

Although Bold lists "Bold Subscriptions" and "Bold Subscriptions for Shopify Plus" as two separate apps on their website, both take you to the same Bold Subscriptions Shopify page, the Shopify Checkout Subscription app Bold released in October 2020.

"Bold Subscriptions for Shopify Plus" (what is now on the app store), was internally called "BSubs 2" and initially designed and developed as an enterprise-level subscription app, built around API-first deployment and modular setups. To give them proper credit, "Bold Subscriptions for Shopify Plus" can easily compete with Recharge and the other flagship apps on the robustness of their APIs and enterprise-level support. However, what Bold never planned on being forced to migrate "Bold Subscriptions" merchants to an enterprise-focused "BSubs 2" app. To this day, the original and the more popular "Bold Subscriptions" has more out-of-the-box features and integrations than "Bold Subscriptions for Shopify Plus". It's understandable given BSubs 2's API focus, but it's unfortunate given that current merchants on Bold Subscriptions are expecting feature parity between both apps before migrating. Nevermind all the other sparkly features other subscription apps have been spamming their inboxes with.

In 2023, the new Bold Commerce CEO re-prioritized the Shopify market, and hence Bold Subscriptions got a second lease on life last year. My suspicion is that the 3rd-party order processing discontinuation announcement lit a fire under Bold's team, forcing them to build a subscription app for brands to migrate to and save as much subscription merchant GMV as they can before the October deadline.

Although 2023 was generally pretty quiet for Bold Subscriptions compared to the rest of the field, in Q4 of 2023 Bold Subscriptions rolled out some new integrations as well as very solid pre-paid functionality. Pre-paid functionality in Q4 2023 is certainly a few years late to the party, but this is a sign of life from Bold Subscriptions.

Jay Myers, Bold co-founder, decade-long thought leader in the subscription space, and rightfully known as a forever-optimist, was excited to share updates coming to Bold Subscriptions ("for Shopify Plus") in 2024.

"We're working on a stacked first half of 2024 of improvements: convertible subscriptions, dynamic discounts, improved pause functionality, massive improvements to analytics and reporting etc. We also have some really exciting updates coming around upselling subscriptions in the second half of the year but we're not saying too much..." - Jay Myers, Co-founder @Bold Commerce

All this is great news for Bold merchants, and I personally would love to see Bold make a great comeback, being an ex-Boldie myself and being close with the Bold team. However, will this feature set be enough for Bold to stop their merchant bleed in 2024 before October? Will plugging the bleed be enough for the new CEO to keep pouring resources into their subscription app? Only time will tell.

Bold Subscriptions survival doesn't excite me. What excites me is the slight but real possibility that Bold Subscriptions can compete with the best again. Jay's product vision and merchant-first attitude, a spark of BUILDER Culture, and some prairie work ethic, I believe are the ambers needed to create a class-leading app again. What else is there to do?! Its -20c out!

Ordergroove will likely continue to stay aggressive on the sales side, and work on building the airplane on their way down. It can be an effective startup strategy, but will this work in the enterprise space? I'm not so sure, if their MeUndies lawsuit is a sign of more things to come.

Yotpo Subscriptions shared a very ambitions vision in 2023 for all of Yotpo apps to come together under a Retain Forward "retention platform", with Yotpo Subscrptions playing a cornerstone role in this. However, will they manage to unify all their apps to be greater than the sum of their parts? A very difficult product challenge in & of itself, and with the tragic eruption of the Israel-Palestine war in late 2023, it's hard to imagine that their Tel Aviv based product team won't be affected.

Loop Subscriptions

Loop Subscriptions has been crushing it in 2023, especially when you consider all the marketing obstacles of promoting an overseas app to the North American market.

Loop is really playing their card right however, under the leadership of a very sharp and hungry CEO. Loop has been the one app setting the pace for the current feature war, and as of right now, Loop is the most feature-rich subscription app on the market. To add insult to injury, Loop is also offering the cheapest pricing out of all the top subscription apps - leveraging the cost savings of their Gurugram based headquarters (India's tech & finance hub). Currently, Loop is also the head and shoulders subscription app winner in value for money.

Piyush Jain, an experienced technical founder with great hunger for the North American market, has managed to deliver a quality product with a focused feature set, and solid emphasis on product design. A true full package we haven't seen before from other overseas apps, with Applstle - with 15k subscription merchants being the biggest overseas subscription success story thus far. Much like what's been working for Loop thus far, prodigious development of innovative features, they are doubling down in 2024. From Loop's CEO:

"In 2024, we we will be taking our segmentation + engagement game to next level. We will be launching tools to help brands increase LTV with loyalty 2.0 / memberships products with product enhancements + deep integrations in Q2'24. We are also seeing traction in enterprise sector with two massive DTC brands migrating to Shopify + Loop as we speak. We hope to see more updates in modifying Shopify checkouts / payments tokens in 2024!" - Piyush Jain, CEO Loop Subscriptions

Loop is also quickly establishing itself as People's Choice of subscription apps, getting shoutouts from the likes of  Moiz Ali (founder of Native, known for his no-bs approach) and Nik Sharma of Sharma Brands. I do not believe there is a "The Best Subscription App" since every merchant has different needs, but don't sleep on Loop. I suspect that Loop will likely be the most profitable winner of the mass app migrations in 2024 and in a very strong position for 2025.

Stay Ai is staying... (pun intended)... under the radar, aiming squarely at the premium enterprise neiche being the most expensive subscrption app on the store currently at $499 + 1% + 19¢/order as the only available price plan. Stay is playing cards close to their chest, but are likely looking to steal some large clients from Bold & Recharge with some cutting-edge retention functionality in 2024, which is already top-class from Stay. I'm excited to see them roll out more retention features and how those will undoubtedly be iterated on by competitors before end of 2024.

Skio's team has continued to thread the difficult needle of product and marketing in 2023. Although they have toned down their marketing after some fair public criticism over shady sales practices, they made the smart move to let their product and customers do most of their talking. This move in itself is a sign that the team not only possesses solid engineering chops but is also quickly leveling up its marketing, which will be key for them in 2024.

Last but not least, Awtomic, the sleeper of premium subscription apps, is quietly continuing down the "if we build it they will come" strategy. Although marketing efforts have been a struggle for this senior product-focused team, if you are looking for the best-designed, most polished subscription app, this is it. In 2023 they launched one of the most robust Surprise+Delight+Reward feature sets available right from any app right now. From Emily Yuhas, CEO:

In 2024 we look to deepen our investments in a world-class build-a-box, customer portal and unique gifting and product shuffle features. Overall, we're building functionality that arms advanced operators and data-minded marketing teams with the tools and insights they'll need in 2024 and years to come. - Emily Yuhas, CEO of Awtomic

Overall Subscription App Landscape:

With 30+ listed subscription apps on the store, another 10+ unlisted apps, and feature releases coming almost every few months, it is hard to keep up with it all. There seem to be 10+ competitors trying to compete for each SMB, mid-market, and enterprise segment. Makes my head spin! I'll be continuing coverage as best as I can with video reviews of all the flagship apps throughout 2024, so give me a follow if you want to stay on top of the Shopify subscription app landscape.

For Merchants: Opportunities & Challenges

First and foremost, if you're considering migrating to a different subscription app - think twice and execute once. I've seen too many brands migrate two or three times over the course of a year only to end up with a lot more grey hair, a year behind, and pretty much exactly where they started. Assess your short and long-term subscription strategy and app feature needs, test at least 3 top apps, and do not hesitate to postpone a migration if you are not 100% confident. Or hire an expert like myself.

Upgrade Opportunities in 2024:

With all the warning labels aside, there are real improvments that can be implemented with a new subscription app:

  • Better subscriber conversion features like tiered subscribe & save, build-a-boxes, gift subscriptions, robust pre-paid plans and subscrpiton upsells
  • Improved churn and retention features like built-in conditional cancelation flows, A/B testing of surprise & delight offers, gamification of upcoming orders, etc
  • Better admin tools like more granular churn analytics with per-cohort and per-order number churn data
  • Improved customer experiences with better designed, easier to access customer subscription portals and post-purchase experiences
  • Better rates & pricing on a new app can be found for the feature set you are looking for
  • Better rates & pricing for your existing app can be negotiated if you are considering a migration

All these CAN be building blocks to your 2024 retention strategy, however, you have to remember that "migrating to a new app" is not a strategy. Data, planning, investment and itiration is what you'll need to profitable roll-out any of these tools. My good friend Matt Hollman nailed it when I asked him about 2024 advice to brands:

"...This is a literal arms race, but I encourage brands to check-in with their current app before jumping ship over a feature. The goal of any brand should be using their subscription app as a tool to leverage subscriptions; the app doesn’t lead the way, your offer does." - Matthew Holman, Subscription Perscription Podcast Host, QPilot Co-fourder

Migration Challenges To Plan For:

As I said before, selecting a new subscription app & migrating is a risky process requiring careful due diligence. Here are some challenges to make sure to include in your decision-making:

  • Defining short & long-term subscription feature needs can be tricky if you do not have a clear retention strategy
  • Its time consuming to look into 10+ apps to shortlist your top 3
  • Installing & testing apps is best done on a development store, which takes time
  • You will likely be oversold to and promised things that might not happen
  • Migrations are rarely simple, and never as simple as salespeople lead you to believe
  • Delays are natural; give this discovery and migration process at least two months
  • Choosing an ill-suited app might mean you have to migrate again, sometimes taking you right back to where you started

My Migration Playbook:

  1. Define your short-term & long-term subscription acquisition & retention strategy.
  2. Define "Needs & Wants" subscription app features (note operational needs like order creation formats, SKU breakdowns for build-a-boxes, how pre-paid orders are handled in your 3PL)
  3. Shortlist 3 apps and install & test all 3 apps on a development store
  4. Consider technical changes/updates needed to be done to your: order fulfillment, Klaviyo, SMS, referrals, analytics apps etc
  5. Compare and score all 3 apps openly with the salespeople - give them a chance to clear up any misconceptions
  6. Evaluate each app beyond the surface level of pricing and features; consider other factors like customer support quality and alignment with your strategic goals
  7. Develop a migration plan with a clear timeline, tasklist and crystal clear responsibilities for each task - do not fall for the trap of "the app company said they'll handle everything"
  8. Give subscribers transparent updates about subscriber portal downtimes and plan re-training email campaigns to introduce them to their new subscription portal
  9. Do not hesitate to delay or postpone a migration; you only get one shot at it

If this seems like overkill, I've seen brands lose 30% of their MRR during migrations or be stuck running two subscription apps for months, creating a support nightmare. Changing subscription apps is like swapping airplane engines mid-flight, things have to go to plan, and if they do not, that freefall feeling is not fun. However, if you plan, take your time, and execute well - upgrading your recurring revenue engine can seriously boost your conversion, CLV, and overall business profitability.

Final Thoughts

We're headed for a very competitive year, with front seats to some of the most intense corporate drama of our careers... I'm here for all of it. Stories of champions, underdogs, and legendary second chances are all happening in front of us, all a part of this massive level-up for this industry. Kurt Elster, fellow agency owner summed it up nicely:

"With the end of third-party checkout processing, we're on the cusp of significant improvements for merchants once this is behind us." - Kurt Elster, Unofficial Shopify Podcast Host

The way I see it: when we zoom out and broaden our timescale, one pattern from this time will be unmissable: that of great innovation.

As for me, It'll be a busy year of being hands-on with merchants, upgrading subscriptions setups, migrating brands to new apps, and putting out more deep dive content than ever before! Stay tuned, and never hesitate to reach out

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