Inflation is rising, but our July 2022 Subscription Commerce Conversion Index indicates subscribers are more focused on their user experience than saving money. Learn how to offer subscription value without reducing prices.
As inflation rises, consumers’ subscription preferences are heading in an unexpected direction away from frugality.
Our July 2022 Subscription Commerce Conversion Index, a collaboration with PYMNTS.com, details changing consumer buying habits and subscription merchant trends. The study, which surveyed 2,142 U.S.-based consumers, found that subscription consumers place features such as enjoyment and flexibility over saving money.
Although it was once a top reason to subscribe, only 20% of surveyed consumers took on a new subscription primarily to cut everyday costs. Meanwhile, a whopping 66% of subscribers enrolled in new services for convenience and enjoyment.
While user experience preferences continue to evolve, the index highlighted several valuable features that can increase subscription revenue because they’re features today’s subscribers expect.
Time is money for consumers, and convenient payment features save subscribers both time and money. 81% of subscribers view the ability to pay for subscriptions how and when they want as a top priority. When it comes time to make the initial subscription purchase, consumers want to see their top payment method offered — and they may not follow through if they don’t. The index’s top-performing merchants offer an average of 6.8 payment options, while the bottom 30 merchants offer just 5.6. Additionally, although subscribers aren’t actively cutting costs, they’re still more aware of their spending. 73% would prefer the merchant to send a notification before debiting a payment.
In a turn of events, enjoyment beat out convenience and cost to become the top driver of subscriber engagement, with consumers categorizing enjoyment as “quality, variety, access, novelty and fun.” Subscribers most focused on subscription enjoyment tend to hold 4.1 subscriptions in industries most related to beauty and clothing. It’s important to note that global developments such as supply chain delays and shortages may impact the enjoyment-focused subscriber negatively if they don’t receive their orders in a timely manner or find their products unexpectedly out of stock.
According to the index findings, merchants are offering more plan flexibility and fewer sign-up discounts, indicating the importance of adding value instead of reducing price. This is especially apparent in the food and beverage industry, with 87% of merchants offering multiple plans during the initial subscription and 70% allowing product customization in each order. The ability to pause, skip or cancel without penalty is another growing feature that many consumers are starting to expect from their subscriptions.
More than 21 million subscribers enjoy Amazon’s Subscribe& Save program — a number equivalent to 8% of the U.S. population. Their subscription service is often used as a model for success with a seamless user experience that brought the ecommerce superpower to where it is today.
The brand’s frictionless features include buy-now-pay-later, try-before-you-buy, free return shipping and customizable subscription products. Their model is centered around making the consumer’s buying journey as simple as possible.
Amazon’s success is proof that convenience is paramount. The data suggests that subscription competition will tighten even further, and merchants who continue to improve their user experience — most notably convenience, enjoyment and flexibility —will come out on top.
The July 2022 index concludes that consumers are more likely to buy into a subscription with an enticing user experience than one that offers more discounts. They want a simple buying journey along with seamless shipping and communication.
As subscription competition grows tighter, merchants with the most tactical and timely approach will overcome new subscription challenges and conquer the competition. Adaptable brands use data to stay up to date on consumer trends, ultimately helping them become more appealing to today’s ever-evolving consumer.