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Wake up: Subscription fatigue is nothing more than a bad dream 

Wake up: Subscription fatigue is nothing more than a bad dream 

Theresa McEndree - Business Express

By Theresa McEndree, CMO at Recurly.

While consumer behaviour is ever dynamic, subscriptions are firmly planted in our daily routines, and subscription technology has advanced significantly to change the way we interact with subscriptions. Whether that’s through the improvement in frictionless payment transactions or the increasing digitalisation of the world around us, subscriptions have only grown in attractiveness and capability. In fact, according to industry data across the UK the total monthly spend on subscription services has now reached £1.6bn with media streaming, audio and food subscriptions being the most popular. 

We see overall growth in the industry, and new subscriptions are emerging everyday—industries like health and wellness, travel, and retail are all rising to meet consumer demands. Our recent State of Subscriptions report reveals some surprising insights into how businesses and consumers are changing their purchasing behaviours. 

Subscription fatigue is overhyped 

The phenomenon of so-called “subscription fatigue”, described as a universal groan that’s the bane of every consumer’s shopping habits, but according to the data, this perception does not match the reality.

In the past year, we’ve seen a 16% increase in active subscribers, and when comparing this to our figures from 2020, the growth surges to 105%. So far from being fatigued by the recurring payment model, consumers are increasingly relying on it for more and more services. 

This makes sense when you take a look at the wider subscription industry. Netflix continues to expand their offering, moving now into live sports, taking away dependence on broadcast television and cable options—the latest being the offer of WWE Monday Night Wrestling on their platform. To continue to grow their subscriber base streaming services, among other subscription services, must expand their offerings even further. 

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Customising for the customer 

Consumers want to feel in control of their purchases more than ever, so it’s important that businesses and service providers offer a unique and personalised package to every user. In 2023, we found the highest-ever proportion of subscription providers offering personalised add-ons to their services at 28.1% representing an increased incremental revenue of $2.2bn. The willingness to purchase additional services is there, provided that businesses can provide the flexibility and the ease of doing so. 

Subscription businesses need to focus on two things: increasing acquisitions and reducing cancellations (or churn). One of the most effective features to reduce cancelled subscriptions that we have found is the pause functionality. Instead of consumers taking permanent steps to cut back on their costs in 2023, for many businesses they can take advantage of a temporary pause. For instance, in 2023, 40% of our customers use the pause functionality in their subscription businesses, demonstrating the widespread adoption of this feature to prevent cancellations—while providing the flexibility that consumers value so much.

For security and comfort look to APMs

Alternative Payment Methods, or APMs, are not exactly new concepts within the world of fintech, but the public understanding of them, and their comfort in using them, has soared in the last year.

APMs accounted for 21.5% of all transactions made to our customers last year, the most popular being PayPal—a familiar face in online payments. Of those APMs, Apple Pay and Amazon Pay were the next most popular and this is expected to increase as more people rely on their mobile devices for further purchases. 

A major attraction for using APMs is the increased security that is embedded within them. Apple Pay for example is often linked to a user’s face or thumbprint, requiring a final authentication from the user or else the payment cannot be completed. For this reason, the payment fraud rate for APMs sat at just 0.9% over the last year, significantly below credit and debit payments which resided at 16.8% and 10.7%. 

The future is subscription-based

As we look forward to 2024, it’s clear to see that the subscription model is king. More and more industries are taking advantage of its clear benefits, and this has even moved to household-name supermarkets such as Carrefour in France. To ensure the most value is being derived for both consumers and businesses, subscriptions need to be rolled out with insight and technological sophistication at their core.


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