A combination of factors changes the subscription sector as pandemic living normalizes and more people engage with physical businesses, and inflation presses down.
According to The Subscription Commerce Conversion Index, a PYMNTS and sticky.io collaboration, by March 2022, data showed that roughly 46 million consumers had canceled or paused retail subscriptions over the preceding year. Reasons range, but inflation now looms large, as do personalization aspects — like payments preference — that need attention.
Reducing overall expenses is why 54% of consumers canceled retail subscriptions
In what’s being called “the great unsubscribe,” the latest installment of the Subscription Commerce Conversion Index notes that “Except for streaming, all subscription categories exhibited a decrease in the share of consumers holding subscriptions, dropping from 31% in October 2021 to 24% in March 2022, with inflation being the primary cause.”
Subscription categories like grocery are especially hard-hit by inflation, with 78% of consumers with retail subscriptions reporting a cognizance of price increases.
28% said the prospect of rising product costs contributed to their decision to cancel
Inflationary pressures are now impacting subscriber decisions, as seen in the new data, as more households weigh the value of retail box products versus cost increases now everywhere.
Per the study, “the impact of consumers tightening their belts has been significant: The estimated total monthly expenditure on subscriptions decreased by 46% in March 2022 compared to October 2021, as is the case for the average number of subscriptions per person and the average expenditure per subscription.”
82% of subscribers said the ability to pay with preferred methods is a key feature
Availability of preferred payment methods is a decisive factor in consumer experience — a fact that parts of the subscription commerce sector may be losing sight of.
We found 56% of merchants offering subscription pause, 61% discounting subscriptions, and 45% using buy buttons, but things are going in reverse on payments choice. Per the study, “payment methods available to consumers decreased from 6.5 in February 2021 to 5.7 in March 2022. Surprisingly, the 30 top-performing companies in the Index decreased their available payment methods the most, dropping from 8.1 in February 2021 to 5.8 in March 2022.”
