There are needs and there are wants. And in the wide world of consumer products, we often like to sample new things before deciding which items are keepers and which aren’t.
Retail subscriptions are doing the job of helping consumers learn about products they’ve never tried — or even heard of. That discoverability is a core appeal of subscription commerce. Combined with a greater focus on adding value, it’s keeping the momentum going for this eCommerce segment.
“We’re seeing that consumers have an insatiable appetite for the types of things that they’re willing to experiment with,” sticky.io President and CEO Brian Bogosian told PYMNTS’ Karen Webster.
With consumers “buying things that they want versus things that they need, and looking for ways to get additional value, have more choice, [and experiment] with new things,” Bogosian feels that merchants need to show some carpe diem spirit as “flexibility of billing ends up becoming an important component to the success of online commerce and subscriptions.”
Merchants having success growing their subscription numbers are paying attention to consumer data, using analytics to make subscription boxes more likely to stick.
“They’re seeing [from platform data] the personalization aspect of what consumers are looking at when they’re browsing and providing them much more robust packages that people see the value in,” Bogosian said.
Research supports that. According to The 2021 Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, “The most common reason D2C subscribers give for subscribing to brands directly is that doing so gives them access to better products,” with 50% percent of direct-to-consumer (D2C) subscribers citing this as a motivator for using D2C subscriptions.
Get the study: The 2021 Subscription Commerce Conversion Index
Rewarding Experiences
Experience is at the heart of subscription appeal, and brands and merchants that understand how product selection and features impact relationships are winning.
“The smart merchants are very focused and understand who their consumers are and providing ways for extending customer lifetime value and expanding the revenue that they’re receiving from individuals,” Bogosian said. “I love some of the options of things that I’ve been given from various merchants, and we see our customers doing the same thing with their consumers.”
That brings loyalty into the equation as consumer expectations around 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 that initial arrow point into the market with that consumer to experiment with other offerings and to provide special value,” he said, adding, “You don’t get those kinds of opportunities in straight eCommerce.”
Fundamental differences between “one and done” eCommerce transactions versus one-to-one relationships that subscriptions excel at are a prime trend to track this year.
Bogosian told Webster that eCommerce sites and online marketplaces don’t have the same advantages as subscription services because “they don’t get to really know who those customers are, what their needs and desires are; how do they penetrate those customers to create more a loyal environment?”
See also: 12% of Consumers Use Retail Subscriptions To Gain Exclusive Access to Products
New Features, Better Availability
As subscription brands and platforms combine discoverability with seamless billing and more features, the sector can navigate the shoals of subscription fatigue expected this year.
Impressed with how restaurants are rolling with the pandemic punches, Bogosian said, “It’s amazing the ingenuity that these restaurants have [shown with] online food delivery, and restaurants that really aren’t on the Uber Eats kind of platforms … provide sidewalk pickup, [and] these parklets have allowed restaurants to actually expand beyond their normal seating capacity. There’s been American ingenuity and creativity around how [they] get around things like the pandemic. I’m pretty bullish on this industry doing well in the long term.”
Ingenuity in subscription commerce in 2022 will come in the form of new features that bolster satisfaction, reduce churn and increase recurring revenues.
“We’re seeing [more] product swapping, subscribe-and-save, these things are all becoming par for the course,” Bogosian said. The ability to “make the changes that they want, to adapt that subscription to what they want then” is critically important to retain and grow subscribers.
Additionally, he sees supply chain issues fading this year as “we’ll end up seeing a lot of products destined for the U.S. originating from the U.S.”
As to the further evolution of subscriptions in 2022 and beyond, it’s an open road.
“Could you see owning a car on a subscription? I think you probably could at some point,” Bogosian said.
“It’d be somebody like Tesla that might break that ice and come up with something very creative relative to being in a subscription in perpetuity around a car that gets replaced after so many miles. You have the knowledge of knowing that you’ve got this fixed expense for this transportation, and there’s value provided to that consumer for their loyalty to the brand.”
See also: 77% of Top-Performing Subscription Merchants Offer Features Known to Inspire Consumer Trust
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More