It’s been a year of transitions for the subscription business, creating question marks for 2023.
Invoking “the great unsubscribe” became commonplace in 2022 as inflation-beset consumers had to pick and choose between the subscriptions acquired during two years of COVID restrictions.
Those were hard choices, and some came off better than others. Looking at some clear winners, consumers decided two types of subscriptions they’d prefer to keep despite the cost are streaming entertainment and … wait for it … pet supplies.
In a December interview with PYMNTS’ Karen Webster, Petco Senior Vice President, Omnichannel Experience Jenny Wolski said the nation’s 25 million pet parents show no signs of quitting their Vital Care memberships, which give them veterinary services, pet grooming and more for $19.99 per month for large pets, $9.99 monthly for smaller creatures.
Wolski said Vital Care “pays for itself” adding that “depending on what type of pet you have, you save hundreds of dollars every year by having the plan, even though you’re paying a monthly fee.” With plans to expand the offering to other products and services in 2023, Petco says its data indicates no slowdown in memberships that cater to our beloved pet companions.
Even so, the latest Subscription Commerce Conversion Index: Subscribers Seek Affordability And Convenience, a PYMMTS and sticky.io collaboration, found that “Merchant performance, as measured by the Subscription Commerce Conversion Index, stalled in September as merchants reduced discounts and free shipping offers.”
Our data registered drop-offs of 4.1 percentage points in free shipping, subscription discounts fading by 3.1 percentage points, although Buy button adoption “rose to 53% of surveyed sites while BNPL adoption inched up to 7%, the most positive developments relative to our last edition of the Index.”
Those numbers belong on the 2023 roadmap of subscription firms, given their strong year-end finish, giving clear indications of what subscribers value in these experiences.
File it under “a word to the wise.” sticky.io chief Brian Bogosian told PYMNTS that the secrets to subscription success in 2023 will revolve around “simplicity and streamlining the process to getting people engaged.”
“If you’ve got a long [process], multiple website pages, logins, passwords and you make it cumbersome, people abandon things. Making it easy, taking advantage of impulse decisions that consumers might have on something that they’d like, it’s important to make that simple,” he said.
Vindicia CEO Roy Barak chimed in on the battles seemingly immune streaming services will face going forward, telling PYMNTS that “instead of cutting back on content or services, look at how to cut back on payment failures that lead to passive churn. Consider how to offer personalized subscription bundles to improve customer lifetime value and increase recurring revenue streams.”
That point is reinforced in the latest Subscription Commerce Tracker® a PYMNTS and Vindicia collaboration. Reducing involuntary churn and making the billing process more streamlined will help many subscription brands retain subscribers in 2023. Doing nothing is sure to cost them.
“A sizable number of consumers dislike the current billing process for various services and providers so much that they would be willing to pay extra for an improved payment experience,” per the Tracker. “Almost one-quarter of consumers surveyed said they would be very or extremely willing to pay an extra fee for this, including 47% of millennials and 46% of Gen Z.”
Read the report: Subscription Commerce Tracker®
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