It has revealed at the same time the value of the subscription model in a whole new light by allowing consumers to get steady supplies of their favorite goods and services direct to their homes without braving store aisles only to find limited inventory. Certain segments of the market have surged, with millions of new subscribers for movie and TV streaming platforms, meal kits and other product boxes.
The subscription economy is not immune to the wider economic headwinds, however. Many consumers are wary about their finances, and some feel they are already juggling too many subscriptions. In the current climate, it is more important than ever for subscription businesses to offer flexible plan features — and this includes the ability to temporarily “pause” accounts. In the latest Subscription Commerce Tracker®, PYMNTS examines how the pandemic is affecting demand for subscription services and how providers are adapting to these shifts.
Developments From Across The Subscription Commerce Space
In the early days of the pandemic, many consumers found themselves stuck at home with plenty of time on their hands, which appears to have contributed to a surge in new subscriptions to video streaming, gaming and digital media services. One survey found that 27 percent of U.S. consumers subscribed to new streaming services, and that the average number of streaming subscriptions held by consumers rose from three to four.
At the same time, subscriber churn has remained a challenge. The survey cited above also found that 17 percent of consumers had canceled streaming subscriptions during the pandemic, for example. The economic downturn may in some ways intensify feelings of “subscription fatigue,” which is prompting a growing number of subscription-based services to allow users to temporarily place accounts on hold. In fact, some providers are taking a proactive approach and alerting subscribers with inactive accounts, including Netflix. The company recently announced that it will ask such users if they would like to pause service.
This does not mean that businesses are pausing plans to offer innovative subscription services, however. One startup is seeking to meet demand for what has become an essential accessory: face masks. MaskClub will ship subscribers one cloth mask per month in a wide range of styles, including popular superhero and cartoon themes. For each mask shipped, the company says it will also donate a medical-grade mask to first responders or medical workers.
For more on these and other recent headlines around the subscription space, read the Tracker’s News and Trends section.
Online classes are another key growth area for subscription, as manifested by the success of providers like Peloton, which has stood out for its robust online fitness offerings. This demand extends to children’s education, with millions of students around the world home from school indefinitely due to the pandemic. Yet, devising subscription options in this space is not as simple as A-B-C. Providers must also take into account platform security and the concerns of parents, Amir Nathoo, co-founder of the online class marketplace Outschool, explained in a recent interview with PYMNTS.
To learn more about how the company is going about designing unique subscription plans, check out the Tracker’s Feature Story.
The Complex Trajectory Of The Wider Subscription Market
The subscription market has grown to become almost as broad and diverse as the economy itself, encompassing meal preparation kits, class passes, fashion boxes and much more. These various segments have fared differently over the course of the pandemic, but one thing has united them: the need to adapt quickly to meet shifting consumer behaviors and expectations
To learn more about how different subscription providers are navigating the changing economic landscape, visit the Tracker’s Deep Dive.