Merchants are taking the battle for consumer engagement seriously and broadening subscribers’ range of options, a critical pivot reflecting the reality that pricing is taking a backseat to fun and convenience in subscribers’ minds, even given the pressure that inflation may be exerting. Many subscription services are making it easier for consumers to simply pause their subscription instead of canceling it altogether, allowing customers to keep their profiles and preferences intact but save on membership fees until they are ready to pay again. PYMNTS’ research found that there has been a 40% rise in the number of merchants offering the ability to pause since May 2021.
Merchants are not just attempting to keep customers connected by helping them save on fees: 48% now allow consumers to adjust their plans at will after signing up for a specific plan. This represents a 9% increase in merchants offering these customization options in April 2022.
In the Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, we examine the shift towards customization among merchants and explore how consumers engage with subscription services against the backdrop of inflation. The report is based on a census-balanced survey of 2,142 U.S. consumers and reveals the features subscription services should offer to retain subscribers and keep them engaged. The survey was conducted between April 8 and April 28, 2022.
The Index analyzes 56 specific features relating to the shopping experience, such as product recommendations and free shipping, as well as consumers’ perceptions about comfort, trust and core user-experience indicators such as efficiency at checkout and onboarding. This edition explains how subscribers’ preferences vary when different motivations have compelled them to subscribe.
Three key personas dominate customer preferences. Our study found that three factors influenced purchasing decisions and emergent personas: enjoyment, which includes quality, access, novelty or fun; convenience, which includes ease of use or time-saving efficiency; and cost. The relationship between costs and consumer choice is complex. While 60% of consumers cite cost-related elements as one important driver of engagement, it is not the sole decider of why a customer will choose a subscription — just 20% stated that they pursue subscriptions mainly to save money.
Our Index ranks merchants according to their ability to improve overall subscription experiences for consumers and remove friction from each touch point. We found that middle-performing merchants and the 30 bottom-performing merchants made meaningful improvements in their efforts to better their subscribers’ experiences, with the latter improving their scores by nearly 8% and the former by 11%. Top performers showed little or no improvement in their scores.
Convenience and enjoyment are the principal drivers of retail subscription choice. Despite inflation’s importance to consumer choice, enjoyment and convenience have become more important to consumers over the last quarter. Our report found that how consumers judge the experience connected to their subscriptions has become an important consideration for consumers as they choose or abandon a subscription service.
Consumers awash in subscription choices and sign-up offers are now specifically seeking features that provide enjoyment and lasting, reliable convenience — things that make them happy and their lives easier. We found that 65% of retail subscribers enroll due to these two factors, with just 20% stating that they took on a new subscription primarily to save money.
Food and beverage merchants are leaders in providing subscribers with a range of customization offerings. If consumers are unhappy with their current subscription, merchants are ready and willing to let them tailor their experiences according to their budgets or preferences.
We found that food and beverage providers demonstrated the most significant improvements in offering consumers customization options. Eighty-seven percent offered multiple plans when subscribing, and 70% offered the ability to customize the products included in the subscription.
If inflation continues to rise and consumers’ prioritization of convenience and enjoyment continues, subscribers may end up looking for the best experience and the best deal, unwilling to compromise on either.
To learn more about the impact of inflation and user experience on subscriber loyalty, download the report.