Cost Drives 56% of All Retail Subscription Cancellations

Despite economic uncertainty, retail product subscriptions have proven resilient. February 2023 saw an 11% increase in retail product subscribers compared to September 2022, suggesting that the subscription market remains robust.

For “Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention,” a PYMNTS and sticky.io collaboration, we surveyed a census-balanced panel of 2,242 consumers with retail product subscriptions from Jan. 24 to Feb. 10 and complemented this data with a study of 200 subscription commerce providers across nine industries conducted from Jan. 27 to Feb. 10 to obtain empirical data on the sign-up and retention features offered and the impact these features have on the overall subscriber experience.

• Less is more: Consumers are carrying fewer retail product subscriptions

The retail product subscription market rebounded to 24% of consumers, an 11% increase from September 2022, but still below the high of 31% in October 2021. Among age groups, millennials and bridge millennials drove the increase. High-income consumers showed the most significant increase in subscriptions. While the number of consumers holding at least one retail subscription increased, the average consumer has fewer retail subscriptions than in March 2022. We detail the demographic trends that subscription providers need to consider.

• Costs drive cancellations

Saving money is not a key driver for subscribers, with just 14% citing this as their primary motivation. Enjoyment is the top reason for subscribing, followed by convenience. Baby boomers and seniors prioritize convenience and cost, while younger generations subscribe for enjoyment. However, cost is the top reason for cancellation: 56% of consumers cited it as the reason for canceling a subscription in the past year.

• Must-have features that can prevent cancellation

Features that subscribers once considered nice-to-haves have become must-haves. Sixty-two percent of subscribers said free shipping is the primary reason they use a retail subscription service. Discontinuing free shipping could cause 41% of subscribers, on average, to cancel. Loyalty benefits, the ability to pause subscriptions and the option to return items have become must-have features for many consumers. Providers need to weigh the risk of discontinuing these features — or failing to offer them.

“Subscription Commerce Readiness Report: Bridging the Gap Between Subscription Conversion and Retention” also examines the sign-up and retention features offered by subscription merchants and the impact these features have on the overall subscriber experience. To learn more about how subscription features impact subscribers, download the report.