As inflation impacts the subscription economy, merchants must offer more convenience and affordability than ever before to lock in subscribers. Read the highlights and helpful statistics from the November 2022 Subscription Commerce Conversion Index.
August 16, 2023
The average consumer expects inflation to continue until April 2024, leading 60% of shoppers to cut back on nonessential purchases and thin out retail subscriptions. As consumers reevaluate their subscription holdings, those offering the most convenience, flexibility and value are most likely to be kept.
Subscription rates are down, but merchants should not be deterred — our November 2022 Subscription Commerce Conversion Index, a collaboration with PYMNTS.com, found that subscribers are likely to stick around for a seamless user experience, flexibility and other convenient features, regardless of inflationary pressures.
The demand for convenience and affordability isn’t necessarily a new shift, but these features will be even more crucial to merchants’ success as consumers continue to tighten their belts. One dollar buys 11% less than it did in February 2021, and most consumers’ incomes are struggling to keep up with raising prices. More conservative consumer spending is the result of these higher prices and stagnant incomes.
Merchants can appeal to this money-saving mindset by offering features like free shipping, coupons or subscribe-and-save deals. According to the index, these features are among the most important to consumers right now. Most notably, 89% of surveyed consumers consider free shipping extremely important when deciding on a new subscription.
The future of subscriptions may look bleak, but that’s not necessarily the case. The subscription index notes 80% of American households currently have a subscription and 28% of retail subscribers are looking to add another. To secure these active subscribers, merchants will need to offer a seamless user experience consisting of simple checkout, shipment notifications and other features to keep subscribers updated and happy with their orders.
More specifically, consumers want convenient features like inventory status availability (80%), relevant product recommendations (71%) and a quick “add to cart” button (78%). Overall, subscribers want to feel in control of their shopping journey and avoid instances that weaken the customer experience.
Amazon Subscribe & Save continues to dominate the subscription economy thanks to its wide array of options and desirable subscription features. In fact, the service offers all five top digital features: free shipping, coupons, product details, product reviews and inventory status.
Subscription merchants willing to offer these features and more will stay competitive with the ecommerce giant as consumers weigh their options.
As subscribers consolidate their purchases, only the most adaptable merchants will continue to thrive. Brands must utilize data from their own customers and external subscription studies to make informed decisions on how to improve user experiences and offer the most valuable features. The November 2022 Subscription Index highlights changing consumer demands and popular subscription features to conquer inflationary pressures and beat out large competitors like Amazon.