The State of Subscription Commerce

By Anneliese Delgado

The sticky.io team has a subscription obsession, and not just as consumers (although who doesn’t love receiving herbal tea or toxic-free laundry detergent every month). We’re constantly examining why consumers subscribe, how merchants can retain subscribers longer and more ways to simplify subscription management for both merchants and their customers.

So when the November 2021 results of our quarterly Subscription Commerce Conversion Index hit our inboxes, it felt like the holidays came early for our clan of subscription nerds.

This 38-page index, a collaboration with PYMNTS.com, reveals consumer buying habits, subscription features customers expect and how merchants can build brand loyalty. Before unpacking the newest findings, let’s take a quick look back at how subscriber behaviors evolved throughout 2021 because of the pandemic.

April 2021 Index: Understanding the “Subscription Curious” Consumer

Research revealed consumers stuck at home went on subscription sign-up sprees to explore new subscription possibilities. While their curiosity made them quick to sign up, they were also quick to unsubscribe if the product failed to thrill. More than one-third of surveyed participants subscribed to at least one new subscription service over the past year. The study also found some merchants struggled to provide an exceptional subscription sign-up experience.

Download the April 2021 index here  

June 2021 Index: “Subscription Curious” Consumers Go All In  

Merchants who devoted their efforts to engaging “subscription curious” consumers benefited because this segment became the primary source of all new subscriptions in the United States, while the number of new subscribers stayed flat. Merchants also chose quality over quantity when it came to subscription features. Free shipping and pause features were just two of the offerings merchants restricted.

‍Download the June 2021 index here

September 2021 Index: Subscribers Grow More Discerning

Despite 61 million people across the U.S. subscribing to at least one subscription, consumers’ appetite for retail subscriptions began to wane. About 19% of consumers with retail subscriptions said they planned to pull back to save money or buy the same product at their local retailers. Research found consumers with direct-to-consumer subscriptions were less likely than others to cut back on their subscriptions. At the same time, merchants worked to turn on the charm. More subscription merchants leveraged discounts, guarantees or refund policies to acquire and retain customers.

‍Download the September 2021 index here 

Takeaways From the November 2021 Index

The November 2021 edition of the Subscription Commerce Conversion Index found U.S. consumers spend $15 billion on retail subscriptions each month. Despite some consumers’ previous plans to cut subscriptions, the average retail subscriber now has five subscriptions in Q4 2021 — an average of 1.3 more subscriptions than in Q3.

See these key findings from the latest index:

Growing Demand for Quality Products

Access to higher quality items now is the biggest driver of retail subscriptions. Ten million people — or 12% of all retail subscribers — report using subscription services primarily to access high-quality products they can’t find elsewhere.

Convenience No Longer Queen

November’s edition revealed consumers did not select “convenience” as the top motivator for subscribing to retail services. Convenience is now the second-most important reason retail subscribers give for using subscription services.

Long Live Free Trials

Free trials have always been the key to converting new subscribers, and they are gaining importance. The share of retail subscribers who first acquired at least one of their subscriptions by using a free trial has been steadily increasing since Q1 2021. About 80% of retail subscribers who subscribed after the pandemic now say they first used at least one of the subscriptions they acquired via free trial, compared to 73% and 65% in Q3 and Q1 respectively.

The D2C Advantage  

Nearly two-thirds of retail subscribers are purchasing products directly from brands. Direct-to-consumer (D2C) retail subscription providers have improved their overall user experiences for the fourth consecutive quarter. Plus, more D2C subscribers than ever report using D2C subscriptions for better pricing, better customer service and better access to product-specific coupons and discounts.

A Lot to Lose

Retail subscription commerce providers could lose as much as $2.2 billion per month by failing to offer a better subscription commerce experience. Top performers, regardless of size, should offer services such as refunds and pause features to build subscriber trust and deliver convenience.

Unwrap More Facts

Read the entire November 2021 Subscription Commerce Conversion Index and get more insights on the growing demand for retail subscriptions.

Interested in starting your own subscription program? Read the "Ultimate Guide for Starting and Scaling Your Subscription Business."