Over a Quarter of Consumers Cite Free Cancellation as Key Factor in Choosing Beauty Subscriptions

Subscription commerce, loyalists, retail, subscriptions

In recent months, the momentum of retail product subscriptions has waned, as consumers grapple with headwinds from economic challenges and a rising cost of living. Yet, within this challenging landscape, a small group of subscribers, termed “loyalists,” has emerged as a crucial cohort for retail subscription merchants.

Thats according to “The Subscription Commerce Readiness Report: The Loyalty Factor,” a report by PYMNTS Intelligence and sticky.io. The study, derived from survey responses from over 2,000 consumers with retail product subscriptions and 200 subscription commerce providers across nine industries, takes a closer look at the current state of the retail subscription market.

Loyalists, who tend to be high-income individuals, generate the lion’s share of merchant revenue. On average, they spend $65 per month on subscriptions and maintain them for an average of 30 months. 

Nevertheless, the report highlighted a critical challenge for merchants: the looming risk of losing their most profitable subscribers. Specifically, two in 10 loyalists have expressed the possibility of canceling at the end of their current subscription period, primarily due to frictions encountered from the merchant’s end.

To address this concern, merchants can prioritize features that appeal to this lucrative segment, such as  free shipping, flexible subscription policies and transparent information regarding recurring charges, in order to retain and satisfy these valuable subscribers.

The study reveals that flexibility features and customization are key drivers for loyalists. In fact, features such as the ability to cancel a subscription any time at no cost, make changes to the subscription frequency and pause or skip the subscription are important to consumers when signing up for different retail subscriptions. Additionally, nearly one-third of subscribers are likely to cancel their plans if they cannot pause or skip a delivery.

Further data analysis across subscription segments reveals that for consumers considering beauty product subscriptions, having access to free and flexible subscription cancellation is the most important feature they consider. This trend is similar for prospective subscribers in the food and beverage and pet supplies segments. 

subscription commerce, flexibility features, retail

On the other hand, for those opting for alcoholic beverages subscriptions, the ability to make changes to the subscription frequency and personalize products by adding or removing items from the subscription box rank highest in terms of importance. 

The report also highlighted a growing gap between top-performing and bottom-performing subscription merchants. Top-performing merchants have witnessed significant improvements in conversion and retention scores, while bottom-performing merchants have achieved smaller gains. The implementation of key features that enhance subscriber experiences, such as free shipping and flexible subscription options, plays a crucial role in contributing to this performance gap.

In essence, the value subscribers place on flexibility and customization in their subscription experience is crucial for merchants navigating today’s economic uncertainties. Retail subscription merchants must prioritize these features to enhance the subscriber experience, drive conversion and attract and retain loyal subscribers.