There are needs and there are wants. And in the vast world of consumer products, we often like to taste new things before deciding which items are kept and which are not.
Retail subscriptions help consumers discover products they’ve never tried — or even heard of. This discoverability is a key attraction of subscription commerce. Combined with a greater focus on adding value, it maintains the momentum of this segment of e-commerce.
“We’re seeing consumers have an insatiable appetite for the kinds of things they’re willing to experience,” sticky.io President and CEO Brian Bogosian told PYMNTS’ Karen Webster.
Consumers “buy the things they want rather than the things they need, and look for ways to add value, have more choices, [and experiment] with new things,” Bogosian believes merchants need to exercise some carpe diem spirit because “flexibility in billing is eventually becoming an important part of e-commerce and subscription success.”
Merchants who are successful in growing subscriptions pay attention to consumer data, using analytics to make subscription boxes more likely to stay.
“They see [from platform data] the personalization aspect of what consumers look at when they browse and providing them with much more robust packages that people see the value in,” Bogosian said.
Research supports this. According to The 2021 Subscription Commerce Conversion Index, a collaboration between PYMNTS and sticky.io, “The most common reason D2C subscribers give for subscribing directly to brands is that it gives them access to better products,” with 50% direct subscribers. -Consumer (D2C) subscribers citing this as a motivator for using D2C subscriptions.
Get the study: The 2021 Subscription Commerce Conversion Index
Enriching experiences
Experience is central to the appeal of subscriptions, and brands and merchants who understand the impact of product selection and features on relationships win.
“Smart merchants are highly focused and understand who their consumers are and provide ways to extend customer lifetime value and increase the revenue they receive from individuals,” Bogosian said. “I like some of the options of things that have been offered to me by various merchants, and we see our customers doing the same with their consumers.”
This brings loyalty into the equation, as consumer expectations of brand relationships are now firmly rooted in the notion that consumers expect to be rewarded for repeat business.
He said: “Loyalty and rewards is an important aspect, as it falls under the banner of value.”
“There is a great opportunity for merchants to continue to leverage this ability to use this first arrow point in the market with this consumer to experiment with other offers and deliver special value,” he said, adding, “You don’t get those types of opportunities in direct e-commerce.
The fundamental differences between “one and done” e-commerce transactions and one-to-one relationships where subscriptions excel are a key trend to watch this year.
Bogosian told Webster that e-commerce sites and online marketplaces don’t have the same benefits as subscription services because “they don’t really know who those customers are, what their needs and wants are; how do they penetrate these customers to create a more loyal environment? »
See also: 12% of consumers use retail subscriptions to get exclusive access to products
New features, better availability
As subscription brands and platforms combine discoverability with transparent billing and more features, the industry can navigate the shoals of subscription fatigue expected this year.
Impressed by the way restaurants are rolling with the pandemic punches, Bogosian said: ‘It’s amazing the ingenuity of these restaurants [shown with] online food delivery and restaurants that aren’t really on Uber Eats-like platforms…offer curbside pickup, [and] these parklets allowed restaurants to expand beyond their normal seating capacity. There was American ingenuity and creativity in how [they] circumvent things like the pandemic. I’m pretty optimistic about the long-term success of this industry.
Ingenuity in subscription commerce in 2022 will come in the form of new features that boost satisfaction, reduce churn, and increase recurring revenue.
” We see [more] product exchange, subscription and savings, these things all become normal for the course,” Bogosian said. The ability to “make whatever changes they want, tailor that subscription to whatever they want then” is critically important to retaining and growing subscribers.
Additionally, he sees supply chain issues fading this year as “we’ll end up seeing a lot of product going to the United States from the United States.”
As for the continuation of the evolution of subscriptions in 2022 and beyond, it is an open path.
“Could you see owning a car on a subscription? I think you could probably do it at some point,” Bogosian said.
“It would be someone like Tesla who could break that ice and come up with something very creative compared to a lifetime subscription around a car that gets replaced after so many miles. You have the knowledge of knowing that you have this fixed expense for this transportation, and there is value provided to this consumer for their brand loyalty.
See also: 77% of top performing subscription merchants offer features known to inspire consumer trust
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NEW PYMNTS DATA: 70% OF BNPL USERS USE BANK PAYMENT OPTIONS, IF AVAILABLE
On: Seventy percent of BNPL users say they would prefer to use the installment plans offered by their banks – if only they were made available. PYMNTS’ Banking On Buy Now, Pay Later: Installment Payments and the Untapped Opportunity of FIssurveyed over 2,200 US consumers to better understand how consumers view banks as BNPL providers in a sea of BNPL pure-players.
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