Five Features Merchants Are Using To Drive Subscription Conversions

From fitness to car rentals, companies in all types of industries are turning to subscriptions, as the business model allows them to deliver products and services while retaining customers. Before companies can serve customers with subscriptions, however, they have to find ways to give them the ease and confidence to sign up for their offerings.

Even as the subscription model is becoming more attractive to merchants, according to the PYMNTS Subscription Commerce Conversion Index, rolling out and keeping up a subscription service isn’t always an easy task. Retailers need to offer not only excellent service, but also the features that let customers subscribe with speed and ease.

In Q3 2018, merchants used product ratings, product details and messaging in a bid to drive subscription conversions. Although the implementation of free shipping declined, the absence of this feature could provide merchants with the opportunity to boost their revenues.

These are some of the features that merchants implemented in Q3 – and how they adapted them to their businesses:

Nearly all – or 93.3 percent – of merchants implemented product details. On its main page, for instance, fitness subscription service Localfit explains how the service is priced and how many gyms participate in the program. It also explains how the service works: The company provides customers with a prepaid debit card that gives them access to thousands of gyms when they sign up. After a customer finds a facility through the app, the company loads the money needed to visit a particular club. Once the customer arrives, she presents the card to get into the fitness club.

Almost the same share – or 92.2 percent – of merchants implemented messaging. To help merchants (and not just those who have subscriptions), technology providers are rolling out new tools. Shopify, in particular, created a mobile app called Shopify Ping. With the tool, merchants can manage tasks through messaging without needing to switch between apps and tools. It brings together messages from social media, a merchant’s storefront and email — among other channels — into one interface. 

Just over four in 10 – or 41.3 percent – of merchants implemented product ratings and reviews. Stitch Fix, for instance, has a service called Style Shuffle that helps shoppers choose clothing and accessories in an effort to drive “enhanced personalization.” As of the first quarter of FY 19, it the company reported that 75 percent of active clients have played the game, and have created more than one billion readings. The data “translates into more personalized suggestions for shoppers going forward,” according to reports.

Approximately three-quarters – or 66.5 percent – of merchants implemented plan options. Those options can come in the form of different membership tiers. In April, Financial Services USA, for instance, unveiled a luxury vehicle subscription service called the Mercedes-Benz Collection that offers multiple tiers. Subscribers can choose from a wide variety of Mercedes-Benz cars and trucks, including SUV, sedan, coupe, wagon, cabriolet and roadster models. The companies noted that each tier will allow access to higher-performance Mercedes-AMG models.

Only half – or 46.4 percent – of merchants implemented free shipping in the third quarter to join companies that have also already unveiled the offering. Boxed, among other companies, rolled out free shipping as a benefit in April with a paid membership tier that will offer customers rewards and discounts. The offering, which is dubbed Boxed Up, offers perks like free priority shipping for orders over $20. (In the free tier, Boxed customers must spend a minimum of $50 to score free shipping.)  In addition, the membership provides rewards based on what customers spend, price matching for competitors and “VIP customer service.”

Over the third quarter, merchants implemented features such as messaging, product details, reviews, free shipping and plan options to help encourage consumers to sign up for their subscription services. But merchants also turned to features such as mobile optimization, free trials and passwords, as they look to build sustainable services to stand out from the many companies tapping into the subscription business model.