Retail Subscribers Twice as Likely to Sign Up for Enjoyment Over Cost

Retail subscriptions are popular, and cost is a significant driver of membership. Providers must know what to offer customers to keep them happy and LTV high.

The most lucrative retail subscription customers are discerning consumers who fall into two groups: multi-model subscribers with a balanced portfolio of different subscription types and VIP subscribers attracted to special membership tiers. Subscribers in these groups represent the greatest lifetime value (LTV), on average, among the various subscriber groups we identified.38%: Share of retail subscribers who are multi-model

PYMNTS’ latest data reveals that understanding the subscription preferences and behaviors of multi-model and VIP subscribers is critical for capturing and maintaining their interest.

These are just some of the findings detailed in “The Impact of Subscription Models on Consumer Choice,” a PYMNTS and collaboration. This report examines the motivations driving consumers with different subscriber personas, trends in subscriber longevity, and the value and importance of user experience in retaining subscribers. It draws on insights from a census-balanced survey of 2,145 United States consumers conducted from June 20 to July 6.

Other key findings from the report include:

Multi-model subscribers lead in terms of the potential value they represent.$2,867: Average LTV of VIP retail subscribers

Multi-model subscribers account for 38% of all retail subscribers and boast the highest average LTV, at $3,021. Although they comprise fewer than 1 in 10 subscribers, VIPs also represent an exceptionally high average LTV, at $2,867.

Younger subscribers know what they want and are ready to pay for it.

Younger consumers dominate the multi-model subscription persona, with 45% of millennials, 44% of bridge millennials and 42% of Generation Z making up this persona. Similarly, a sizable share of millennials and bridge millennials fall under the VIP subscriber category. Younger consumers tend to focus on premium and balanced subscription portfolios, unlike older generations, who tend to opt for standard subscriptions.73%: Portion of VIP subscribers highly likely to add more subscriptions

Many subscribers are likely to add more subscriptions and stick to the subscription models they know when doing so.

VIP subscribers are not only a lucrative subscriber base but are also disproportionately likely to expand their subscription portfolio, with 61% favoring another VIP subscription. The trend of sticking to familiar models is prevalent across other subscription persona, too, with sizable shares of box and discount-refill subscribers also indicating a preference for adding more of the same to their subscription collections.

Subscription providers must realize the differences between subscriber personas and what motivates their choices to keep subscribers happy and gain new ones. Download the report to learn what the most lucrative subscribers want from their retail subscriptions.