After experiencing a record-breaking growth over the last two years due to the Covid-19 pandemic, it’s now time for subscriptionpreneurs to look ahead and find out how the consumer behaviors of tomorrow will influence the subscription commerce industry in 2022.
We released four editions of the Subscription Commerce Conversion Index in 2021. Packed with insights from subscriber surveys and habits of top-performing subscription merchants, the research ultimately revealed how subscriber behavior evolved throughout the year.
Read on to learn how to leverage this data to outshine the competition and cater to your subscribers in 2022.
A New Take on “Cancel Culture”
The subscription commerce industry experienced its own form of cancel culture during the beginning of 2021. That’s when we saw a spike in “subscription curious” consumers. This group would test and try various subscriptions, then quickly cancel if the product failed to thrill.
Back in Q1, only 52% of consumers who signed up for a new retail subscription during lockdown actually kept it, highlighting the pervasiveness of the “try then unsubscribe” habit.
Today, subscription merchants can breathe a small sigh of relief because nearly one-third of all consumers have at least one retail subscription service and they plan to keep these subscriptions. The November 2021 edition of the Subscription Commerce Conversion Index found the share of subscribers planning to cancel their plans dropped from 19% in Q3 to 14% in Q4.
The latest index also found the average subscriber now spends $37.73 per subscription per month and holds five different retail subscriptions on average at any given time.
Shift From Convenience to Exclusive Access
While consumers have more retail subscriptions than ever before, their motivations for signing up have changed. In Q1 2021, 14.8% of surveyed consumers said convenience was their primary reason for buying retail subscriptions. Only 10.2% of consumers said the same in Q4.
In fact, the latest research shows convenience is no longer the top reason consumers use subscriptions. They are now hitting the “subscribe” button primarily to access high-quality items they can’t get in stores. Millennials and bridge millennials in particular are the groups most likely to use retail subscriptions to buy products they can’t get elsewhere.
While convenience is no longer the primary factor driving people to subscribe, that doesn’t mean consumers developed patience for a cumbersome sign-up or checkout experience. Going into 2022, subscription merchants should focus on delivering a seamless buying experience.
Top-performing merchants offer guest checkout so customers can immediately buy without setting up an account. One of sticky.io’s clients, Fish Fixe — which also appeared on ABC’s “Shark Tank” show earlier this year — does this very well.
Allowing customers to self-manage their subscriptions by enabling pause, restart, and order-editing features will help set your business apart from the competition.
The Direct-to-Consumer Edge of the Subscription Commerce Industry
Subscription merchants still weighing the merits of a direct-to-consumer (DTC) model should pull the trigger in 2022. Not only does the DTC model give merchants more control and flexibility around how they sell products, it’s also a great way to attract and retain more subscribers.
The latest index found consumers primarily want to buy directly from merchants to access better products. Better pricing, excellent customer service and exclusive rewards are other key motivators — and DTC demand isn’t slowing down.
The share of subscribers who receive their subscriptions directly from merchants is higher now than any point since Q1, at 64%. Moreover, 51 million U.S. consumers use at least one DTC retail subscription and that figure is predicted to increase in the future.
Free-Trial Demand Persists
Who can say no to free? Not retail subscribers, apparently.
The share of these subscribers who first acquired at least one of their subscriptions by using a free trial has been consistently growing since the beginning of the year.
About 80% of retail subscribers who subscribed since the onset of the pandemic now say they first used at least one of the subscriptions they acquired via free trial, compared to 73% and 65% in Q3 and Q1 respectively. The latest index also found free trials are especially important for converting millennials and bridge millennials.
Owning the Future of the Subscription Commerce Industry
Top-performing subscription merchants are poised to provide free trials, flexible subscription self-management options, and high-quality products in 2022.
Building customer trust will also be essential, so be sure to update product details, publish clear guarantee and refund policies, and safeguard sensitive customer information. The latest index found that some merchants struggle to offer these features and capabilities. The ones who excel will conquer the future of the subscription commerce industry.Read the entire November 2021 edition of the Subscription Commerce Conversion Index courtesy of sticky.io and PYMNTS.com