Subscriptions Define COVID-Era Resilience With Ingenuity

If “resilience” is a bona fide buzzword flying out of 2020 (and it is), then subscriptions are its commercial embodiment. As offices and stores went dark and the population hunkered down, people began subscribing like mad. For proof, look to streaming service Netflix, which added 10 million new subscribers in Q2, and Disney+, which boasts 60 million subscribers in year one.

Retaining those subscribers as “normal life” slowly restarts is another matter altogether.

PYMNTS’ November 2020 Subscription Commerce Conversion Index, a collaboration with Recurly, researched 47 features across 181 digital subscription services and 10 industries seeking the features that most impact user experience and provide the greatest value.

As the Index states, “merchants are looking to turn these new subscribers into long-term customers by offering them smoother subscription experiences than ever before. They are not only reducing the time it takes to subscribe but are also offering features that provide their subscribers with the flexibility to customize plans and the information to make the right decisions. Merchants lagging behind in offering these key features will risk losing customers and failing to attract new ones.”

Three-Quarters Of U.S. Adults Subscribed In 2020

Getting the lay of the land subscription-wise, research by PYMNTS and Recurly shows that “nearly three-quarters of the U.S. adult population or approximately 182 million consumers, subscribed to at least one subscription service in July 2020, a 9 percent increase from February 2020, and nearly half of these new subscribers are also likely to keep their services after the pandemic recedes. Our research shows that merchants across the board are improving their services to turn these new customers into long-term subscribers,” per the Index.

Churn rates are declining as well, with reduced cancellations. That’s just one way that platforms are helping to manage and improve subscription commerce, but there are many others.

For example, “engaging new customers requires a sign-up process that is fast and seamless, traits that have become ever more important at a time when consumers can choose from myriad services. Merchants seem to understand this and have actively reduced the time it takes for consumers to sign up for their services. The time required to sign up on an average subscription service website has decreased by 17 percent between Q3 2020 and Q4 2020, reaching 127 seconds” – the lowest seen since PYMNTS began tracking subscription commerce in 2017.

Subscription Commerce Gets Personal

Customization is another digital toolkit that subscription merchants are using in 2020 and beyond, with the aim to manage churn, add value and keep subscription services fresh in a competitive field.

“[The] most common reason prompting consumers to cancel relates to their inability to make changes to their subscription plans. This is true for nearly 30 percent of consumers who subscribed to new services during the pandemic and 15 percent of those who subscribed before the pandemic,” per the Index. “Plan flexibility can therefore help subscription services reduce their churn rates. Merchants are responding accordingly, as 52 percent now allow subscribers to make changes to their plans and three-quarters offer plan options. This compares to 48 percent and 73 percent of merchants, respectively, that provided such features in Q3 2020.”

It’s a situation that bears constant vigilance on the part of subscription brands and merchants, as PYMNTS research shows that competition to capture increasing demand is prompting more merchants to offer greater flexibility. Nearly 52 percent of merchants allow subscribers to modify their plans in Q4 2020, a 4.1 percentage point increase relative to Q3 2020.

“The share of merchants offering plan options increased 2.1 percentage points during the same timeframe to 74.6 percent,” the Index states, “and 30.4 percent of merchants are now allowing their subscribers to provide feedback, up from only 21.4 percent in the previous quarter.”