The top 5 subscription trends to look out for (and get ahead of!) in 2021.
With a historic year mercifully behind us, we now turn to see what 2021 has in store for the subscription industry.
The story of 2020 was one of staggering successes and catastrophes. One in which companies, industries, and even long-entrenched business models were dropped without warning into a harsh new landscape and forced to survive on meager rations.
The past year was also an enormous and, perhaps morbidly, a much-needed proving ground for the subscription industry. While the pandemic brought the retail sector to its knees, the novel danger of venturing to public places suddenly affirmed the value of subscription services. Despite being housebound, people could retain some sense of normalcy thanks to subscriptions providing entertainment, food, health, beauty, fashion, and more. As a result, nearly 90% of subscription services either maintained or substantially grew their customer base throughout 2020.
The calendar has changed but the pandemic persists. In an increasingly vibrant and competitive marketplace, it is vital to identify new trends and act on them as early as possible. Without further ado, we present our top 5 picks for the most important subscription trends of 2021:
The outlook for subscription services is optimistic. According to a recent survey, 27% of consumers expect to increase their number of subscription services, while 63% plan on maintaining their current levels of subscriptions. This survey included consumers in some of the world’s largest markets like the US, Italy, Germany, Canada, and the UK. Just 10% of them plan on decreasing their number of subscriptions. As Forbes writes, “Subscription revenue models are far more robust in their business models” and seem prepared to continue their upward trajectory.
While COVID-19 has served as a spur to convert many new adopters, the industry will depend upon innovation, value and convenience to sustain growth and gain long-term customers. The pandemic has “breathed life into some subscription services that had been sagging,” according to Retail Wire, and such companies will need to build strong relationships with recurring customers in order to transition out of the pandemic.
There is a growing sentiment among consumers that subscription services strategically complicate their cancelation procedures in order to squeeze out extra income, hoping the monthly fees fly under the radar. Such tactics appear to be backfiring.
According to Small Biz Trends, nearly half of all participants in a recent survey were concerned with the hassle of canceling subscriptions. “Others (34%) also find it difficult to keep track of their subscriptions,” while “a third (35%) of consumers admit to overpaying for a subscription service that they have stopped using but failed to cancel.” The frustration consumers feel is likely to materialize into lagging sales for companies with such a reputation.
Subscription businesses should utilize a software solution that helps them understand why customers are unsubscribing in the first place. Furthermore, the software should allow them to take control over the visibility of their cancelation policy. This establishes a relationship based on trust, which will help them earn long-term, recurring customers.
Social media influencers have far-reaching audiences that span a range of demographics, but they have a stronghold on one particularly valuable demographic: younger people.
Young consumers are savvy, thrifty, and, oxymoronically, less consumer-minded than previous generations. According to Forbes, millennials tend to own less as “the hassles of ownership no longer have an appeal.” Subscription services like Netflix, Spotify, and others have all but replaced their shelves of physical DVDs and CDs. Today’s e-commerce subscriber is “most likely to be 25 to 44 years old,” according to another Forbes article.
This explains why the subscription industry, which spent $8 billion on influencer marketing in 2019, is poised to spend as much as $15 billion by 2022. Instagram influencers will receive the largest bulk of subscription partnerships (it is the go-to for 79% of brands), with platforms like Facebook (46%), YouTube (36%), and Twitter (24%) following, according to Influencer Marketing Hub.
It comes as a surprise to most that the majority of subscription businesses have no idea where their sales originate from. That means every time a customer visits and subscribes, valuable information from that interaction is left on the table. Forbes writes that COVID-19, while increasing acceptance of subscription services, will also drive “vastly better insights into consumer needs and demands.”
Such insights could help companies remove bias and subjectivity by acting on hard data, leading to more effective decision-making and resource allocation. This means fighting churn by identifying the pain points in the customer journey, making sense of vast amounts of data in easily digestible graphics, and personalizing the customer experience — all of which “is possible with AI cohort analysis,” according to Sellbrite.
Such technology has not been available in recurring billing services until now. Smartrr offers businesses the only robust, self-contained billing and analytics platform in the industry. This represents a market shift away from relying on expensive and cumbersome third-party analytics tools.
In 2020, streaming services, monthly subscription boxes, and meal-kit services grew considerably. Because the pandemic could stretch well into, and potentially beyond, 2021, these services are likely to enjoy continued growth.
Powered by AI and designed to make subscribing the obvious (and simplest) choice for customers, Smartrr is recurring revenue management reimagined.
Smartrr changes the landscape in several ways, including:
2021 is shaping up to be a year of massive gains in the subscriptions industry. Contact us to find out how Smartrr can help your company retain customers and avoid churn at every step.