Thought Leadership

Relationship Commerce

Why subscriptions are a must in 2021

Consumer demand for subscription offerings is skyrocketing and there is no sign of it stopping. Our data shows that subscription enrollment jumped 48% in 2020, compared to 2019. At the same time, subscription retention rates stayed stable. 

To put it another way, 2020 marked a significant shift in consumer buying behavior. Shoppers flocked to subscriptions and then stuck with them. 

We believe this trend will continue throughout 2021, and that brands that want to stay competitive must either implement a subscription program or enhance their subscription offering before the second half of the year. 

Why Brands Need Subscriptions in 2021

In the past several years, there’s been a steady drumbeat for subscription offerings among consumers. The coronavirus outbreak accelerated demand to unprecedented levels. Shoppers fell in love with subscriptions because they could easily get their favorite products delivered to their doorsteps without having to risk their health. 

Experts predict that the country won’t return to “normal” until the end of this year. As a result, consumer demand for subscriptions will continue to grow. The question is: Will shoppers stay with subscriptions after the country opens back up? We predict they will. Subscriptions do more than mitigate pandemic-related risks, they also free up consumers’ brain space and give them back time. In short, consumers are growing more and more accustomed to the convenience subscriptions provide.

This is why brands must develop and implement a subscription offering in the first half of 2021. Doing so will enable brands to capitalize on consumer demand, while simultaneously positioning themselves for long-term success.

While rolling out a subscription offering is a great first step, brands must also develop a plan to keep their hard-earned subscribers happy and engaged.

How to Retain Subscribers in 2021 and Beyond

Last year, more brands than ever before implemented subscription offerings. Now, competition is fierce. To stand out, brands must offer a high-quality, differentiated subscription experience that utilizes advanced promotional incentives. 

These types of incentives attract and build loyal customers, as well as improve retention rates. 

Incentives that perform well include: free shipping, early access to sales for subscribers, subscription-only product offerings, curated experiences, and unique subscription promotions like a subscribe more, save more model, or every fourth order free.

To mitigate churn, we recommend brands use predictive analytics. For example, Ordergroove clients have access to Anticipate AI, a feature that evaluates customer churn risk, allowing brands to proactively engage with shoppers to keep them satisfied. 

Yankee Candle is a perfect example of how to implement a subscription program with advanced promotional incentives.

The Sweet Smell of Success: How Yankee Candle Dominated 2020 with Subscriptions

In late 2019, Yankee Candle partnered with Ordergroove to develop and launch their Auto-Ship program. At the time, the Massachusetts-based company saw increased demand for a subscription offering among their customers and wanted to move quickly. 

Yankee Candle’s subscription offering makes it easy for their customers to get the candles and products they love. They no longer need to think about reordering items, and are free to focus on the experiences that matter most to them. To entice shoppers to sign up, the brand leverages promotions and reduced shipping thresholds. 

Auto-Ship was an immediate success, so much so that the company decided to enhance their subscription offerings. 

Yankee Candle worked with Ordergroove to expand their subscription offering to include curation. The company’s curation product prompts shoppers to participate in a guided quiz that helps them select a fragrance box based on their preferences. 

Since launching, Yankee Candle has reported impressive results: 343% growth in recurring revenue.

Final Thoughts

In 2020, consumers turned to subscriptions to combat the negative effects of the pandemic. To thrive in 2021, brands must either implement a subscription program or enhance their subscription offering. If they don’t, they risk falling behind competitors who spent 2020 not only laying the groundwork for a subscription offering but getting it off the ground.


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