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When Subscription Merchants Innovate With Plan Features

When Subscription Merchants Innovate

To make life easier for their customers, many businesses are adopting the subscription business model. From consumer goods and hardware to eCommerce and internet of things (IoT), innovators are allowing shoppers to have products and offerings regularly delivered to them.

According to the PYMNTS Subscription Commerce Conversion Index, the key features that drove the performance of subscription offerings for goods and services included free shipping, free trials and product ratings and reviews. Goods merchants had the upper hand with product ratings and reviews; more than half (54 percent) offered them, compared to only 30 percent of service merchants.

From Perennial to Green Piñata Toys, eCommerce innovators are tapping into the subscription business model to deliver goods to customers on a recurring basis. Here are just some of the ways these companies (among others) are implementing features to enhance their subscription offerings in the digital age:

Approximately three-quarters – or 76 percent – of goods subscription services implemented cancellation. Subscription pet food company Pet Plate for instance, provides customers with “complete flexibility to skip, pause or cancel,” per CEO Gertrude Allen in a PYMNTS interview. The frequency of meal delivery varies, largely depending on the weight of the dog. Small breeds might get a box every month, but larger dogs might receive a shipment each week. Consumers can visit the company’s website to learn about its products and services and to sign up for a plan.

Two-thirds – or 66 percent – of subscription services for goods implemented plan options. Perennial, for instance, is creating foods and beverages for consumers age 50 and older, with delivery options ranging from every two weeks to up to every 12 weeks. Currently, the company has a non-dairy nutrition beverage with protein, vitamins and fiber that is said to aid in bone, brain, gut and muscle health. The goal, Co-Founder and Co-CEO Sara Bonham told PYMNTS in an April interview, is that people will consume it every day, perhaps adding it to their oatmeal or drinking it after they work out.

The same share of subscription services for goods – 66 percent – implemented free shipping. BURST Oral Care, in one case, allows shoppers to purchase a brush with free shipping through the company’s website. Customers then subscribe to $6 replacement heads that are sent every 90 days. The company accepts payment via PayPal, Apple Pay and credit cards. But BURST’s biggest point of differentiation is its network of dental professionals, who have an in-depth understanding of what makes a good product. The company also claims its toothbrush has the longest battery life on the market, at four weeks.

Fifty-four percent of goods subscription services implemented ratings and reviews. Green Piñata Toys, for instance, offers expert recommendations based on a child’s age. The system also knows which items customers have rented in the past, tapping into that knowledge to personalize future selections. Parents can approve whatever recommendation the site gives or can make their own choices. “Every parent knows their child best,” Shiva Kashalkar, the company’s founder, told PYMNTS in an April interview. The company offers more than 250 toys from brands ranging from PlanToys to HABA and Crocodile Creek, and accepts credit and debit cards for payment.

Nearly half – or 48 percent – of goods subscription services implemented plan changes. Customers of baby food subscription service Raised Real, for example, can choose the quantity and frequency of their deliveries and can make changes at any time. The company offers food in ready-to-steam and pre-portioned packages, with ingredients from organic and sustainable farms. The company provides “amazing nutrition” and “functional benefits,” Co-founder and CEO Santiago Merea told PYMNTS in an April interview. He added that each meal is tailored to different aspects of a child’s development, from their brains to their muscles.

From Pet Plate to Perennial, digital merchants are letting consumers regularly receive products ranging from pet food to plant-based beverages. And while more industries are tapping into the subscription business model with varying degrees of success, it appears that subscription-based companies are thriving overall in the digital age.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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