PYMNTS research finds that consumers now have more subscriptions than ever, but the subscription sector can’t shake the sense that slowing sign-ups and a cancellation wave are looming. That’s bringing a new creativity to the space as retention takes the spotlight.
The latest Subscription Commerce Tracker®, a PYMNTS and Vindicia collaboration, notes that 84% of U.S. consumers are seeking entertainment online and indoors during the pandemic.
However, “these consumers, especially those of younger generations, nevertheless are trying to find ways to save money on streaming services. Free ad-supported streaming services attracted 65% of consumers as an alternative to paid subscriptions, for example, and 47% of millennials and 34% of Generation Z streaming subscribers also reported dropping their subscriptions and picking them up again once new shows or seasons were added.”
As this edition of the Tracker points out, “Subscribers may be spoiled for choice when it comes to subscriptions, but their budgets are not limitless, and many are beginning to reassess their subscriptions to determine which they can live without.”
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Turning Information into Action
While the account “pause” feature gets applause from subscribers for the billing flexibility it offers without the inconvenience of cancelling and resubscribing later, brands are devising other compelling new offers and features to keep subscribers activated and engaged.
Seeing no drop off in the appeal of its curated gift boxes, Bespoke Post chief marketing officer Alvaro De La Rocha told PYMNTS that personalization may be more potent than pause.
“Since we launch about 20 new boxes a month and have an eCommerce store with a wide assortment, we are able to assign boxes to people based on what they’ve already told us about themselves,” De La Rocha said.
As the company scaled and learned more about personal and even regional assortment preferences, gift boxes lived up more and more to the “Bespoke” promise subscribers want.
“Additionally, the company found that having enough subscribers with a particular interest made it tenable to offer niche products, such as throwing knives or a kit for kombucha making. Customers receive an email before each month’s box ships, giving them the chance to skip that box or swap it for another,” the Tracker states.
Get the Tracker: The Subscription Commerce Tracker
As Fees Are Scrutinized, Now’s the Time to Add Value
There’s growth to be found in subscription commerce, but same old stuff won’t cut it anymore.
Consider some competing figures.
On the one hand, 48% of younger gamers report having no gaming-related subscriptions, as does a large share of older gamers. Conversely, research indicate that over 60% of consumers are worried about the combined cost of subscriptions.
Per the Tracker, the findings of one study note that 29% of subscribers said they “strongly” agreed that subscription fees are an issue. That’s a call to action for subscription providers to heavy up on tighter curation and personalization to keep subscribers from cancelling.
As the Tracker notes, “Several streaming services raised the cost of their plans during the pandemic, including Hulu, Netflix and YouTube TV, and subscription fees for sports programming on ESPN+ and fuboTV also have increased. These price increases could put service providers in a precarious position if they fail to offer value-added features.
“With the right combination of pause features, high-quality products, personalization and superior customer service, subscription service providers have a fighting chance to retain the subscribers they gained during the pandemic and hold consumers’ attention, even as appetite for more services as a whole may be waning,” the Tracker said.
Get the Tracker: The Subscription Commerce Tracker
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