Looking for loyalty among millennial subscribers and their closest cohorts? Look to your feature set and make sure it’s flexible and delivers value to these choosy consumers.
At a high level, PYMNTS found that estimated total monthly expenditure on subscriptions declined by 46% in March compared to six months earlier, so the trend is there. Conversely, from subscription boxes to streaming services, these subscribers can also be retained — with effort.
In the May Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, we surveyed a census-balanced panel of over 1,900 U.S. consumers and found that there is indeed a wave of cancellations — the Great Unsubscribe — not completely unexpected nor inevitable for those subscription services that keep it fresh.
Broken Engagement
Consumers of all age groups started using subscriptions in creative ways in the depths of the pandemic as product shortages and COVID-19 variants made stores seem scary. The most engaged subscription consumers are younger, but we found them in a decluttering mode in recent months as economic uncertainty pushed out the pandemic as the big worry.
“Generation Z consumers exhibited the highest rates of subscription cancellations in the past year of all age groups at 17%, followed by millennials at 16%, bridge millennials at 14%, and Generation X consumers at 11%,” the index found.
While friction explains some of this movement, belt-tightening is also clearly a factor.
Data show that “for approximately half of millennials, bridge millennials and Generation X consumers, not having to remember to shop regularly is central to their concept of convenience and a key motivation when they sign up for subscriptions,” and some are willing to now part with the ease and pocket time savings.
The Young and Discerning
As product appeal and direct-to-consumer (D2C) convenience drive much of the subscription sector, to keep those pandemic-era millions in subscribe mode, brands and merchants need to slice the data finer for higher forms of personalization and delight to blunt the cost factor.
PYMNTS found that 17% of consumers who nixed subscriptions “did so because their services supplied them with more of the product than they needed, and another 28% stated that they no longer wanted the products their services offer. Both issues might be addressed through the introduction of a simple recommendation engine or plugin or by offering subscribers the option to customize delivery amounts with each order based on their needs.”
Of highly desirable features not found in all subscription offerings, two are core. Eighty-two percent of subscribers see availability of preferred payment method as nonnegotiable, while 81% said it’s the ability to cancel subscriptions immediately without penalty.
Ironically, the presence of an easy unsubscribe feature could hold off fence sitters, while a just as easy “reactivate” feature is being used more, particularly in streaming.
Get the study: Subscription Commerce Conversion Index
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