Subscription commerce trends that will define 2022
David Cross |
Editor’s note: Comments have been edited for length, context, and clarity.
Is your subscription experience ready for 2022?
In a recent webinar, Casey Burt, Director of Client Services at Ordergroove, broke down 2021 subscription commerce trends and what merchants can expect in 2022. Below, we’ve rounded up highlights from the discussion.
For more information, including insights from Elan Lieber, Senior Performance Marketing Manager at Equator Coffees, watch Beyond 2021: Subscription Trends That Will Define 2022.
Consumer demand for subscriptions continues to grow
Throughout 2021, merchants were concerned that consumer demand for subscriptions would decrease as the country transitioned out of the pandemic.
Ordergroove’s internal data doesn’t bear this out. We found that both subscription and subscriber enrollment were up year over year.
“To us, this proves that there is still strong consumer demand for subscriptions out there in the market,” Casey said.
For instance, pet subscriptions performed particularly well. In 2020, pet adoptions spiked, which fueled subscription growth. Last year, subscriber enrollment in the pets industry was up 94% year over year, while pet subscription enrollment was up 164% year over year.
“The interesting thing here is that not only did we have more folks coming in, but the folks that came into the subscriptions ecosystem were purchasing more subscriptions,” Casey said. “Subscriptions were increasing at a faster rate, meaning that people were really seeing the value in subscriptions.”
Popular subscription commerce strategies in 2021
In retrospect, three major trends dominated subscription commerce in 2021. Merchants increased retention efforts, better integrated subscriptions into their customer journey, and began experimenting with indirect subscriber incentives.
Increased focus on retention
Merchants doubled down on their retention efforts last year to prevent the hard-earned subscribers they gained during the pandemic from churning.
Specifically, merchants focused on removing friction from their subscriber experience by giving shoppers more control. For instance, there was a push to make it easier for shoppers to pause, ship, or swap their orders. These capabilities have been shown to increase the amount of time a subscriber keeps their subscriptions.
According to Ordergroove data, subscribers last 135% longer when they have the ability to skip an order and 71% longer when they can swap a product.
More subscription touchpoints
While retention was king in 2021 – customer acquisition was still critical.
To convert shoppers into subscribers, merchants further integrated subscriptions into their customer journey. Subscriptions call-outs were added to category pages, guided selling experiences, and in the beauty industry into virtual try-on experiences.
Two examples of this trend can be found in Hotel Chocolat and Il Makiage’s subscription experiences. Hotel Chocolat highlights subscription benefits on their category pages, while beauty brand Il Makiage’s guided selling experience leads shoppers to a 14-day free trial and a prompt to sign up for recurring orders.
Example 1: Hotel Chocolat highlights subscription benefits on their category pages.
Example 2: Il Makiage’s guided selling experience prompts shoppers to sign up for a subscription.
“We see subscriptions being fully integrated into those experiences these days so that when the shoppers interact with the eCommerce site they are shown a subscription offer at every touchpoint,” Casey said.
Must-know subscription trends in 2022
Merchants should expect competition in the subscription space to continue to increase, even beyond 2021 levels. As a result, Casey expects merchants will seek out creative retention strategies to protect their subscribers and extend customer lifetime value.
Three routes merchants will take are embracing surprise and delight experiences, adding pre-emptive communication about subscribers’ repeat orders, and focusing on indirect value incentives.
Surprise and delight experiences will take center stage
Expect merchants to prioritize surprise and delight campaigns to build customer loyalty and extend lifetime value.
These experiences might be as simple as crafting entertaining and friendly messaging for a subscription pathway. Or, they could be complex, such as sending subscribers an expected gift or a surprise discount.
As an example, Tata Harper has already achieved tremendous success by surprising and delighting their subscribers. Once a year, the clean beauty brand sends their top 100 subscribers a thank-you card and a full-size product.
Merchants should also consider donating to a charity in the customer’s name. This is especially powerful in the pet vertical.
“I mention pet specifically because this tends to be a vertical where everyone is focused on causes,” Casey said. “Pet people are really, really passionate about pet-related causes and we’ve seen some great traction with experiences like that.”
Proactive communication will add convenience
In the coming months, more merchants will start proactively communicating with their subscribers to remind them that they have an upcoming order.
To get the most out of the communications, Casey recommends merchants include messaging that reminds subscribers of the value they receive from their subscription and provides tips on how to manage their order.
Merchants should also incorporate cross-sell/upsell recommendations with messaging that emphasizes the strong relationship they have with the subscriber. For instance, the messaging might tell subscribers that the product was “handpicked just for them.”
Casey pointed to Kiehl’s subscription program as an example. The brand uses similar language in their subscription experience.
“That will really drive that feeling of convenience and allow them to see the value of subscriptions,” he said.
Indirect incentives will differentiate subscription experiences
Promotional discounts and free shipping are now table stakes for subscription experiences. To stay competitive in 2022, merchants will add indirect value incentives to their subscription experiences. This might include unique digital content like blog posts and videos
“We’ve seen that it’s not all about economic drivers,” Casey said. “As margins tighten, these indirect value drivers will become critical, as they foster a strong connection to the customer.”
For more subscription insights, watch our on-demand webinar with Equator Coffees.