Subscription Commerce

NEW REPORT: How Pricing Combats Subscription Fatigue

In the subscription business, offering flexibility is increasingly important for retaining customers. After all, no one likes being overwhelmed with product deliveries they don’t want or can’t use, which can — in many cases — prompt them to cancel their subscription altogether.

According to the most recent Subscription Commerce Conversion Index, flexibility is the third most-valued feature offered by a subscription provider. PYMNTS found 100 percent of top subscription performers offer easy cancellations and 95 percent allow subscribers to change their plans.

Understanding that consumers want the flexibility to adjust their plans as they see fit, subscription merchants are feeling the pressure to demonstrate the value of their service while also giving consumers the control they crave. In an effort to meet this consumer demand, some entertainment providers  including Apple, Netflix and AMC Theatres — are expanding the services offered in subscription packages.

The July Subscription Commerce Tracker™ looks at the tactics companies are employing in an effort to build long-lasting relationships with consumers.

Notable Headlines From The Space

Based on recent developments, bundling is gaining popularity among subscription merchants looking for ways to win over customers.

Tech giant Apple, for one, recently launched a subscription-based content-bundle service that enables subscribers to access music, videos, TV, news and movie content. The service will launch in 2019 and is designed to allow subscribers access to Apple’s various services, including iTunes, Apple TV and iCloud through a consolidated platform. By bundling its offerings, Apple is looking to compete with Amazon, which offers bundles via its Amazon Prime subscription. 

However, bundling is just one of several ways subscription services are disrupting the media and entertainment industries. Others, such as AMC Theatres, are launching tiered plans to their consumers. The movie theater chain recently introduced a new subscription plan tier called AMC Stubs A-List, which the company says will allow consumers to view up to three movies per week at an AMC location. The new plan also offers subscribers concession perks, like free refills on a large popcorn and access to an express line. 

Even at-home entertainment services are looking to offer new tier plans to give consumers more options. Streaming giant Netflix, its premium plan allowing subscribers to view content in 4K on up to four devices simultaneously, is reportedly testing a new subscription plan called Ultra. The plan would offer many of the same features as the premium plan, but with high-dynamic-range (HDR) streaming.

Deep Dive: Subscription Software

In addition to consumer-facing markets, the business-to-business (B2B) sector is seeing disruption from subscription models. For example, many businesses no longer have to pay upfront fees for perpetual licenses to access Software-as-a-Service (SaaS) products. Instead, they can pay monthly or annual fees to access software (and its latest updates) through a cloud-based platform. By some estimates, roughly 80 percent of software vendors will shift to a subscription-based business by 2020.

This month’s Tracker includes a Deep Dive that explores how software subscriptions are becoming a cost effective and secure solution for businesses, and a benefit to subscription vendors.

Subscribing To A Healthier Smile

Subscriptions are also delivering value in the dental care market. At least, that’s the goal for electric toothbrush manufacturer Goby, which offers subscription plans for replacement toothbrush heads. In the July feature story, Goby Co-founder Ben Goldberg discusses why subscriptions might be the best solution to encourage consumers to invest in healthcare products.

Download the Tracker to read the feature story, Deep Dive and the rest of the latest news.

About the Tracker

The Subscription Commerce Tracker™, powered by Recurly, is a bi-monthly report that explores how companies use subscription-based commerce to build long-term customer relationships and steady revenue sources. The report includes notable developments in the market and the companies that are rapidly innovating the space.

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