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Subscription Retail Services Report: Canceling Cancellations

Subscription Retail: Canceling Cancellations

Rare and dreadful “black swan” events like the COVID-19 pandemic inevitably impose new patterns of living and working as aftereffects. Add subscription commerce to the list of industries unsettled by the pandemic, which is now combating the unheard-of disruption with creativity, patience and a slightly higher tolerance for risk.

The Consumer Subscription Retail Services Report: Using Pause Features to Curb Subscription Cancellation edition, a collaboration with Recurly, notes the ingenuity of subscription merchants and their partners as the mass displacement of workers wreaks havoc across all payments, from monthly rent to streaming TV to consumers’ favorite subscription boxes.

Recent disruptions have compounded the already troublesome issue of frequent cancellations. “Our research shows that approximately 58.3 million U.S. consumers – 23.4 percent of the population – canceled at least one subscription during the past six months,” the report states, adding that, “A disproportionate number of those cancellations – 43.5 percent, to be precise – were initiated by millennials, who make up only 29 percent of the population.”

The Subscriber Mindset

Despite the flux that subscription merchants are accustomed to during business-as-usual times, they were just as blindsided by the COVID-19 pandemic as every government and business on earth. Moving forward with empathy and intelligence will be the key to survival for many.

Among the most popular features that subscription vendors are leveraging to counter the pandemic-induced wave of cancellations is the humble “pause,” which allows consumers to temporarily suspend a streaming channel or other service, with the option to resume at will.

“Our research finds that 66 percent of consumers who have been using consumer retail subscriptions for less than six months say they either already use pause features or would be at least somewhat interested in using them,” the report states. “Consumers who use streaming services also show a strong interest in using pause features, with 44 percent saying they either already use them or would be at least somewhat interested in them.”

“It is in the digital media subscription market where we see the smallest share of users expressing interest in features that can temporarily suspend their subscriptions, as 42.6 percent report they either use or would like to use pause features,” the report states. “As much as 48.9 percent of consumers who use education and training services either use or would be ‘very’ or ‘extremely’ interested in using pause features. This speaks to the nature of seasonal subscription services: Consumers who use them demonstrate a strong desire to temporarily suspend them and resume plans when their services become applicable to their lives again.”

Measure and Accommodate

From “serial subscribers” who sign up fully intending to cancel before the free trial ends, to educational users whose need is seasonal, the inaugural Consumer Subscription Retail Services Report from PYMNTS and Recurly will periodically examine the space, especially as subscription commerce – indeed, all commerce – reorganizes and retools for post-COVID market realities.

“Subscription services can be a major investment in terms of both time and cost. Even a quarterly subscription service requires consumers to commit to a steady flow of payments over a three-month timeframe, and current events remind us that a lot can transpire in three months,” the report concludes. “Consumers’ personal and financial situations can change during that time and render them unwilling or unable to continue making their routine payments. Providers that do not take active measures to accommodate their changing financial and payment needs risk losing them to competitors who can.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.