The pandemic didn’t entirely create the subscription boom seen over the last 15 or so months, but COVID-19 was undeniably an accelerant. Consumers stuck at home shopped for subscriptions the way they might once have roamed the aisles in brick-and-mortar retailers. An average of 34 percent of these “subscription-curious” consumers have added at least one new subscription to their personal roster since the pandemic began, according to PYMNTS latest Subscription Commerce Index.
The Index, sticky.io Chief Product Officer Lyn Tran told PYMNTS in a recent conversation, tells a story that has been unfolding across retailers for the last year. Consumers are shopping more online for subscription offers and services and turning to direct relationships with manufacturers 62 percent of the time. Tran said that what the consumer wants is access to unique products and perhaps a shot at alleviating some of the boredom that comes along with being on lockdown for over a year.
Smart retail players, she said, are noticing and adapting their offerings to this trend in consumer preference and pushing subscriptions to market.
“The brands that get it are being proactive in their actions to convert and retain these subscription-curious consumers,” Tran said. “They are taking action to deliver a quick and simple onboarding experience that makes it easy for them to complete the signup within a couple of minutes.”
The Importance Of Choice
That sign-up process, Tran said, gives consumers a lot of choice in perfecting the offering to their actual needs. A focus on selection, she noted, should ideally go well beyond the initial sign-up process. It should also be a feature of subscription services done right going forward. Merchants should continue to offer consumers choice and control even after the initial sign-up. That choice might be to level up their subscription or adjust it downward depending on the specifics of their needs. Or they could even press pause for a prescribed period.
Offering options, she said, means that consumers can do something other than simply cancel when the program they signed up for no longer works for them. The most successful merchants, she said, are flexible in their offerings because, over the long run, flexibility tends to have a reliable track record for increasing conversion rates and retention over time. The challenge, she said, is big — delivering unique, personalized offerings that consumers are excited to regularly receive and interact with as routinely as they need and as flexibly as they want.
And it is often a high bar to clear for digital-native and digital newcomer brands alike, Tran said, as they both come to the emerging omnichannel subscription playing field with very different strengths and relative weaknesses.
The digital natives, she noted, come armed with a lot of technological sophistication and clever data modeling strategies that make them “masters at using data to decide what product to build, how to curate the right offering, the right subscription model and pricing for their specific customers.”
What they don’t often have, she said, is a lot of name recognition to back all of that up — meaning the audience-building process is a slower go. However, they are very clever about maximizing their advertising exposure while minimizing their spending.
The non-digital native vertical brands are, as a rule, more established, Tran said, and typically widely recognized with a wider repertoire of products. Their push into subscriptions is a play to sell directly to their consumers and tap into all that product data currently invisible to them.
Those brands, Tran explained, are starting to experiment and gain that customer data, finding ways to leverage those insights to build strong omnichannel operations end to end. For these brands, subscriptions are ultimately about strengthening their future as omnichannel power players.
“They’re using subscriptions to extend their reach and begin to build direct relationships with their consumers,” Tran said.
Because the future of commerce, the data increasingly indicates, is defined a bit more each day by merchant reach and how far they can extend it. Subscriptions, the latest data indicates, are increasingly favored as not just a means to extend that reach — but hold on to it once it’s grabbed.