Learn how to offer the feature-rich experience consumers crave. Read the April 2023 Subscription Commerce Readiness Report to get the details on subscription cancellation patterns and conversion trends.
April 20, 2023
While the growth of retail subscriptions may be slowing down, their presence remains steady in the ecommerce industry. Consumers aren’t cutting them out completely but instead are adopting a “less is more” attitude, prioritizing high-quality products and flexible features.
Our Subscription Commerce Readiness Report, a collaboration with PYMNTS.com, reveals the reasons consumers are unsubscribing as well as how to prevent churn with the most favorable feature offerings.
Approximately 24% of consumers hold at least one retail subscription — a number that’s remained relatively stable since the start of 2022. However, shoppers are growing more selective. The average number of subscription holdings per subscriber is now 2.9. This is a significant drop from March 2022’s 4.1 subscriptions.
Millennials and bridge millennials lead the pack with 39% of each group holding at least one subscription, while older and younger generations are cutting back more quickly.
Of those currently holding subscriptions, 6% plan to cancel after their current payment period ends. As consumers watch their wallets amid inflation, they’re honing in on the brands that offer quality over quantity.
Our past studies listed many consumer features as optional add-ons rather than necessary elements, but this report concludes that merchants must offer these features to prevent cancellation and stay competitive in coming months.
More than 22% of consumers list convenience as their top reason for subscribing, and they’re quick to jump ship if merchants don’t offer the convenience they expect. When asked to name their top three reasons they would discontinue a subscription, a large percentage of consumers listed the inability to pause or skip (27%) and change subscription frequency (23%) as grounds for unsubscribing.
A flexible subscription experience is a critical advantage, and merchants who prioritize these related features will reap the benefits. Of the report’s top 30 most successful merchants, 97% give subscribers the option to pause or modify their subscriptions. On that same note, 0% of the bottom 30 merchants offered this feature.
The research shows that, on average, 68% of all subscription businesses offer a variety of plans to subscribers upon initial purchase, but only 46% allow existing customers to modify their subscription plans, and just 54% allow the option to update delivery frequency. Giving consumers options before and during their subscription experience can give your business a competitive advantage over inflexible brands.
In the era of growing security protection measures, consumers are more skeptical of online payments and recurring purchases. Give shoppers reassurance with features like satisfaction guarantees, product reviews and clear subscription renewal policies.
Especially as the Federal Trade Commission cracks down on deceptive subscription renewal tactics, it’s important to give customers complete clarity around their purchases — such as the rebill date, subscription frequency, cancellation policy and other essentials. A top reason subscribers may cancel their subscription is if it’s renewed without their approval (31%).
Customer loyalty is the key to success as shoppers become more selective. Earn consumers’ recurring business by awarding loyalty with special perks. Subscribers want to feel appreciated, whether it’s with free shipping, discounts or other offerings to show your gratitude.
Loyalty rewards were once optional for merchants, but our data shows that consumers are now expectant of these offerings. In fact, the most common reason cited by subscribers for cancelling a subscription, with 40% of votes, was the discontinuation of free shipping. Terminated loyalty offerings weren’t far behind, with 27% of consumers backing their importance.
It’s 2023, and the bare minimum subscription offerings don’t cut it for consumers anymore. Merchants must prioritize convenience, transparency and loyalty rewards to stay in subscribers’ good graces.