42% of Consumers With Retail Subscriptions Shop Less Often at Physical Stores

Retail subscriptions represent a key growth segment for online merchants. Not only do 4 in 10 millennials satisfy most or all their shopping needs via retail subscriptions, but sizeable shares of other generations do as well.

The more subscribers rely on their subscriptions, however, the more they demand from providers. Consumers who rely most heavily on retail subscriptions also tend to have the least patience for bad experiences. Scheduled delivery and auto-fill subscribers are 9 percentage points more likely than other subscribers to cancel due to inaccurate product reviews. They are also 5.9 percentage points more likely to cancel if merchant cancels a subscription order due to a product being out of stock.

These are just a few insights explored in “The Replenish Economy: A Household Supply Deep Dive,” a PYMNTS Intelligence and sticky.io collaboration. This study examines retail subscriptions’ impact on consumer shopping habits. It draws on insights from a survey of 2,011 consumers conducted from Sept. 5 to Sept. 21 and a research study of 188 retail subscription merchants conducted from Sept. 1 to Sept. 12.

Other findings from the study include:

Retail subscription consumers shop less at brick-and-mortar stores.

Forty-two percent of subscribers say they shop in person less frequently or have stopped completely. Those with subscriptions from industry juggernauts Amazon Subscribe & Save and HelloFresh are among the most likely to say so, at 48% and 47%, respectively.

Subscriber loyalty depends on flexible plan options and features.

Retail subscribers demand flexibility, and merchants can quickly lose customers by missing the mark. For example, 17% of subscribers who prefer scheduled delivery and auto-refill subscriptions for everyday shopping items would terminate their subscription if merchant would not refund a disliked item.

Retail subscription conversion rates are up, but retention rates have fallen.

Between July and September, subscription providers saw a modest increase of 1.7% in their conversion index scores. Their retention index scores dipped by 3.5%. Merchants have strengthened their ability to win consumers but are struggling to retain them.

As the retail subscription market matures, subscribers are becoming more accustomed to flexibility. What once was a market differentiator is becoming a basic expectation. Download the report to learn more about how retail subscription merchants can increase conversion and retention by offering more flexible plan options and other key features.