Online stores are seeing a big boost from retail subscriptions as the convenience and tailored experiences offered by digital retail subscriptions lead to a drop in-person shopping for many consumers.
According to a recent PYMNTS Intelligence study, retail subscribers lean toward more of the same subscription type they already prefer, with more than 40% of them reporting making fewer visits to physical stores due to their subscriptions.
This shift in shopping habits presents a significant opportunity for online merchants to innovate their retail subscription offerings and capitalize on evolving consumer expectations, according to “The Replenish Economy: A Household Supply Deep Dive” study, produced in collaboration with sticky.io.
The study further reveals that young consumers are more inclined to heavily depend on retail subscriptions for their day-to-day shopping needs compared to older generations.
Millennials lead this trend at 39%, closely followed by bridge millennials at 38% — both surpassing the overall average of 31%. Following them are Generation Z subscribers at 31%. In contrast, only 24% of Generation X subscribers and 17% of baby boomer and senior subscribers mainly rely on subscription services.
Consumers who heavily rely on retail subscriptions also tend to be the least tolerant of unsatisfactory experiences. For instance, subscribers who opt for scheduled delivery and auto-fill services are significantly more likely, by 5.9 percentage points, to cancel their subscriptions if a merchant cancels an order due to an item incorrectly listed as in stock.
The probability of cancellation increases by 9 percentage points if there are misleading or inaccurate product reviews and ratings. Moreover, payment choices also influence these consumers’ decisions. They are 2.9 percentage points more inclined to cancel if a buy now, pay later (BNPL) option is unavailable at checkout and 2.4 percentage points more likely to cancel if digital wallet options are missing.
To cater to consumers’ increasing demand for payment flexibility, the report suggests that online merchants should offer multiple payment options. “Accepting modern payment methods such as BNPL and digital wallets can enhance the customer experience and improve subscription retention rates,” the report noted.
Additionally, focusing on offering control and transparency in the subscription process as well as offering features like adjustable subscription frequencies, customer approval before renewals, and clear communication of any changes in subscription terms can significantly increase customer satisfaction and retention.
Overall, online merchants have the opportunity to capitalize on this retail subscription trend by offering flexible and engaging subscription experiences that meet evolving consumer expectations. By addressing subscriber concerns, providing payment flexibility, and ensuring transparency in the subscription process, online merchants can attract and retain subscribers in this growing and lucrative retail landscape.