Direct-to-Consumer: Prioritizing Personalization And User Experience

In A Decade of Digital Transformation in 12 Months, 46 C-suite executives spoke with PYMNTS for its Q2 eBook on what the world will look like as recovery rolls on and the next iteration of normal rolls out. In this excerpt, Sharath Dorbala, CEO of Vindicia, explores how the digital transformation has changed the direct-to-consumer (D2C) subscription space. “Connecting user experience, behavior and subscription data will unlock the potential to sustain past success, market and launch new D2C products, and identify effective strategies for increasing retention,” he says.

Read the entire eBook here.

The rate of digital transformation over the past 12 months has been astonishing, especially in the direct-to-consumer (D2C) subscription space. While agile brands have been quick to transform their business models to maintain connections and relevance with subscribers, they will need to continue to deliver innovation to keep up their end of the relationship. Having the right data at the right time will enable savvy businesses to move further, faster.

The Impact of the Pandemic

While the pandemic has had a negative impact on much of the economy, the subscription eCommerce industry has been booming. Traditional retail companies saw sales shrink by an average of 10 percent in 2020, but subscription businesses grew by about 12 percent – with OTT video streaming, digital media and eLearning subscriptions growing by over 25 percent. Overall, the subscription eCommerce market is expected to grow at a CAGR of 68 percent to reach $478.2 billion by 2025.

During the pandemic, many consumers were unable or unwilling to enter retail stores. They have grown accustomed to the convenience of having products arrive on their devices or doorsteps on a regular basis. This has forged deeper customer relationships that are more than purely commercial. Innovative brands have created a social community that helps people feel connected at a time when they couldn’t socialize in person.

Overcoming a Crowded Marketplace

pFor subscription brands, the downside of this transformation is a crowded market. Personalization and user experience have become the key battleground for differentiation. Global players like Amazon, Apple and Disney have set the bar exceptionally high, leading consumers to expect effortless experiences anyplace, anytime.

Underpinning great user experience is effective user management, requiring the interlinking of identity, behavior and subscription intelligence to deliver seamless experiences across every product and device. With relevant content and frictionless transactions, users will be incentivized to stick around beyond the pandemic. Monitoring subscription data and metrics will help businesses capitalize on increases in site and social traffic, set up new accounts with free trials or gift subscriptions, better understand and deal with churn, and make more predictable revenue forecasts.

From Transactions to Personalized Experiences

Maintaining and growing a D2C business means moving from a transactional relationship to a personalized relationship. This means transitioning from basic identity management to compelling user management: combining digital identity for every individual with tools to manage households and groups, entitlements, privacy and granular user-level data. As a result, happier, more engaged consumers will be incentivized to stick around and spend more over the subscription lifetime. For example, Vindicia has found that a 5 percent increase in retention yields at least 42 percent more customers over 24 months.

Creating Compelling, Trusted Experiences

Earning consumer trust is crucial in a world where data underpins the value of many products, and where users are more concerned than ever about privacy. Giving consumers simple tools to manage privacy, security and consent for themselves is essential. Leveraging subscription intelligence to create better individual experiences incorporating data-driven personalization is a crucial competitive differentiator. Connecting user experience, behavior and subscription data will unlock the potential to sustain past success, market and launch new D2C products, and identify effective strategies for increasing retention – thereby growing customer share of wallet by staying relevant over a long-term relationship.