Discount Subscriptions Combine Consumers’ Two Favorite Features: Convenience and Savings

Subscriptions considered discretionary were among the first to go when consumers began slashing their budgets and their providers have generally struggled since.

Although there have been some exceptions to this development, beauty boxes and wine subscriptions have suffered especially, as consumers can no longer afford to pay premiums when the same or similar products may be found nearby for less.

Indeed, the consumer drive for cost-cutting runs so deep that per PYMNTS’ collaboration with sticky.io, ”Subscription Commerce Readiness Report,” 41% of consumer respondents would cancel their subscription if free shipping were suspended.

Included in proprietary research prepared for the report were consumers’ top reasons for using a retail subscription service.

It is not fun or convenience that leads these motivators; saving money tops the list. In this frugal consumer environment, that means that subscription providers may be best served leading with their value proposition.

Currently, 15% of subscription firms surveyed say that attracting new customers is their most important challenge in the coming year, with another 14% saying the same for existing customers. Meeting consumer demand, in this case for discounts, may be one way of handling these retention challenges.

In an interview with PYMNTS’ Karen Webster, sticky.io CEO Brian Bogosian details the current consumer mood and what may make them sign up for, or cancel, a subscription. “The bar continues to get higher. People’s budgets are getting squeezed. People aren’t spending money frivolously. If they don’t get value, if they don’t get flexibility, if they don’t get incentives to continue, they’ll drop off.”

Consumer sentiment has no signs of letting up until inflation ends, and that is nowhere near concluding, per Fed reports. Given these headwinds, subscription firms may consider featuring or pivoting to some sort of deal model to meet consumers’ drive for discounts.

In the quick-service restaurant (QSR) space, for example, Subway is bringing its foot-long sandwich subscription back after a previous successful run. Through this program, customers can receive half off their foot-long sub purchase once a day for 30 days for a flat $15 fee.

Coupled with consumers’ long-standing love for convenience is inflationary pressures forcing a behavioral change in how shoppers choose merchants and seek deals. The subscription company able to seamlessly combine both may find itself weathering the choppy near-term economy.