Overcoming eCommerce Subscription Fatigue

by: Zain Alami01/10/2023

Quick Summary The eCommerce subscription economy has witnessed massive growth in recent years, and so did 'subscription fatigue'; a phenomenon of mass subscription cancellations. What causes it and how can merchants mitigate its risk on their eCommerce business?

The subscription economy has witnessed massive growth in recent years and is no longer solely tied to entertainment services. In fact, more and more eCommerce businesses have flocked to explore the model in efforts to lock in customer loyalty and offer lasting value to their consumers by stressing convenience.  

A subscription-based business model creates recurring revenue by shipping consumable products to subscribers regularly. Revenue predictability, offsetting customer acquisition costs, increased customer lifetime value, and improved inventory forecasting are some of the many benefits of subscription-based business model benefits that are frequently discussed. But one topic that isn’t touched on as often is the challenges that come with embracing a subscription model, in general - and Subscription Fatigue, in particular. 

What is eCommerce Subscription Fatigue? 

Subscription fatigue refers to a potential decline in consumer interest in subscription services as a whole, as a result of being overwhelmed with the number of available subscription offerings that have been increasing over time. This often leads to a phenomenon of mass subscription cancellations.

A 2021 Deloitte study reveals that the average U.S. household pays for subscriptions to at least nine different services. The same study also states that almost 50% of all consumers are frustrated by having too many ongoing subscriptions.

What causes eCommerce Subscription Fatigue? 

The easy-come, easy-go nature of subscriptions increases the likelihood of churn among customers who are constantly hunting for better products, services and experiences. Those same customers are also becoming more price-sensitive and understand that their subscription is oftentimes an impulsive decision that reaps short-lived value. 

But why so? 

1. Lack of Customer Satisfaction. 

Getting customers to subscribe is easy, but getting them to stay isn’t. Satisfaction is a key ingredient to the success of the subscription model. From designing the subscription plans to on-brand packaging, and arranging billing, fulfillment, and delivery, the process has to be incomparably smooth. Failing to gauge customer satisfaction and improve following their feedback will risk having your model abandoned along with many others. 

2. Failing to offer enough novelty.

We see many merchants who fall for the dreaded mistake of adopting a take-it or leave-it mindset when designing their subscription offerings. It is true that subscribers want access to specific products and services on a recurring basis and that’s why they subscribe in the first place, but “needs” change. Failing to listen to your customers and think creatively about meeting their changing needs will result in having them look elsewhere. 

3. Price-sensitive consumers.

From a high-level perspective, consumers invest in subscriptions to get access to a specific product or service. But truth is, they invest in an ongoing relationship with the brand; an investment that is ignited by consumers' search for value. With the forecasted recession on the horizon, consumers are becoming increasingly price-sensitive. eCommerce merchants have to make up for consumers' reduced willingness to pay for a product by providing long-term brand value that is worth the investment. 

How to mitigate the risk of eCommerce Subscription Fatigue? 

When assessing the competitiveness of the landscape, it is crucial for merchants to understand that their competition isn't not only bound to businesses in the same vertical. More often than not, they compete with all recurring subscription offerings. It is, therefore, advised that a business should set itself apart from all of this competition and navigate the potentiality of subscription fatigue by aiming to make its subscription as customizable and flexible as possible.

By accommodating preferences for various delivery frequencies, giving the user the option to reschedule, and even considering the possibility to pause a subscription, merchants can reduce churn and make customers more in control over their actual needs. 

Recharge, a leading subscription payments platform designed for merchants to set up and manage dynamic recurring billing across web and mobile, recently rolled out a new “pause subscription” feature that gives customers the option to take a break from their subscriptions rather than cancel outright to decrease churn. If a customer decides to move forward with canceling, they’ll be asked why, at which point automated retention incentives like offering discounts, product swaps, or order skips can kick in.

This strategy stresses the importance of listening to customers’ feedback and ameliorating the brand’s subscription model accordingly. At a point in time where average consumers have subscriptions to this, that, and that, merchants have to go above and beyond to not just be another burdening “that”. 

Avex partners with several intuitive subscription management solutions such as Recharge, Ordergroove and Yotpo to support leading brands in growing recurring revenue that lives up to customers’ heightened expectations. Our team of strategists recommends the solution that most fits your brand goals and eCommerce needs.

Looking for a subscription solution that upholds long-term value and aligns with your brand’s unique needs and growth goals?

Let's discuss your ecommerce goals

Schedule a consultation call with one of our experts.

Let's discuss your ecommerce goals