The subscription commerce market has grown by more than 100 percent each year for the past five years. While many businesses are wholly built on subscriptions, some are offshoots of existing brick-and-mortar retail chains or traditional eCommerce enterprises. Bloomingdale’s, Google and Nike are just some of the established companies branching out into the subscription space, along with retail businesses like nutritional supplement vendor The Vitamin Shoppe, boasting two subscription plans.
The industry faces its share of challenges, however, including the increasing trend of subscriber churn. While customer retention affects every business, it is especially impactful for subscription-based firms, as each customer represents a long-term revenue stream. Understanding why customers cancel is key, so many businesses use exit surveys to gather feedback and work toward countering this churn.
In the November Subscription Commerce Tracker, PYMNTS explores the latest in the world of subscriptions, including a new subscription option from Lyft, The Vitamin Shoppe’s latest foray into supplement subscriptions and how churn is keeping industry players up at night.
Developments From Around The World Of Subscriptions
One of the companies feeling the squeeze is Sony, which recently announced that its PlayStation Vue subscription television streaming service is set to close in January 2020. Expensive content deals, paired with a highly competitive market, are driving the company to shutter the service, which had reportedly been searching for a buyer in recent months. Originally launched in 2015, the service only managed to obtain a subscriber peak of half a million.
Blue Apron is also facing struggles, announcing that it had just $99.5 million in revenue as of Q3 2019, a decline of 17 percent quarter over quarter and 33 percent year over year. This is the latest development in a series of bad news for the meal-kit pioneer, with its share price plummeting from $140 to less than $10 since its 2017 IPO.
Other businesses are fine-tuning their subscription offerings. Lyft recently unveiled plans to replace its $299-per-month All-Access Pass with a simplified $20-per-month plan, Lyft Pink, which gives users a 15 percent discount on rideshares. The move is in response to complaints surrounding its previous program’s complexity — it offered free rides with a multitude of qualifiers and exceptions. Lyft Pink is expected to roll out later this year.
For more on these and other subscription news items, download this month’s Tracker.
How The Vitamin Shoppe Supplements Its Storefronts With Subscriptions
The Vitamin Shoppe is one of the heavy hitters in its field, with more than 700 retail locations around the country. The nutritional supplement retailer made strides in the subscription space with the launch of a replenishment-by-mail program in 2017, and the recent debut of a personalized daily vitamin pack program.
For this month’s feature story, PYMNTS spoke with Stacey Renfro, The Vitamin Shoppe’s chief digital and customer experience officer, about the unique challenges of combining retail commerce and online subscriptions, as well as how the chain plans to develop its programs going forward.
Deep Dive: Subscription Businesses Face Cancellation Woes
As subscription-based businesses grow more popular, customers can choose to be pickier about which services they utilize. While this development is good for consumers, it’s leading many companies to face unprecedented levels of cancellation and churn.
This month’s Deep Dive explores why subscribers cancel, and how businesses can leverage customer feedback to convince them to stay.
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