Merchants Stand to Lose $2.2 Billion By Not Offering Consumers a Better Subscription Experience

Consumers in the United States first acquired a taste for the benefits of retail subscription commerce in March 2020 — and now, 20 months later, they still cannot get enough. They now spend a collective $15 billion on subscriptions to retail products each month, whether for artisan coffee, custom beauty boxes, dog toys or any of a growing assortment of products available via online subscriptions, and there is no sign of cutting back.

The November Subscription Commerce Conversion Index: The Exclusive Access Effect Edition, a PYMNTS and sticky.io collaboration, provides a first-hand account of why consumers are still stuck on their retail subscription kick. We surveyed a census-balanced panel of 2,424 U.S. adult consumers about their use of subscriptions in the past 20 months to learn more about the key drivers behind the continuing surge in retail subscription commerce, what they expect subscription providers to offer and actionable insights into how these providers can gain a bigger cut of the cake.

Key findings from our research include:

-Access to higher-quality items is now the biggest driver of retail subscriptions. Ten million people — or 12% of all retail subscribers — report mainly using subscription services to access high-quality products that they cannot find anywhere else. It is therefore clear that providers will need to offer their customers unique products, in addition to high-quality user experiences, to keep their competitive edge going forward.

-Retail subscription commerce providers could lose as much as $2.2 billion per month by failing to offer a better subscription commerce experience. Many providers are falling short of offering the subscription features that their customers have come to expect, especially in the way of trust-boosting features like guarantees or refund policies.

-Eighty percent of all retail subscribers in the U.S. first used their subscriptions via a free trial. Fewer subscribers than ever are canceling subscriptions after the free trial period expires, with just 5.8% doing so. This underscores how important it is for retail subscription providers to offer free trials to convert — and keep — more customers.

Unique products, free trials and guarantee or refund policies are key, but they are just part of a much broader and more complex story about consumers’ ever-changing expectations of their subscription service providers. The Subscription Commerce Conversion Index: The Exclusive Access Effect Edition details what subscription merchants must do to stay ahead of the curve.

To learn more about the key factors driving the continued surge in retail subscription commerce in the U.S., download the index.