Subscription Services Have Consumers Trading Loyalty for Access to Premium Shipping
According to new survey data from UPS Capital, the financial services division of UPS, the subscription economy is holding strong with 57 percent of consumers reporting multiple delivery subscriptions. The company’s research, based on a survey of 1,000 U.S.-based adults, aimed to garner deeper insights into consumer sentiments regarding the shipping process with retail subscription services.
While nearly 60 percent of consumers reported having at least one or two delivery subscriptions, another 20 percent reported having three to five subscriptions. The most popular categories for these subscriptions are food and beverage, followed by wellness (more than 30 percent) and household essentials (nearly 25 percent). At just over 20 percent each, the retail and fashion, beauty and pet care categories were closely behind.
More from WWD
Importantly, UPS Capital’s research team pointed out that many of these are not short-term subscriptions with 60 percent of consumers reporting that they have maintained their subscriptions over the past year. The main reason for dropping a subscription is a poor shipping experience.
“The subscription economy is evolving, and 82 percent of consumers have increased or maintained their subscriptions in the past year,” said Dan Spitale, vice president at UPS Capital, who warned brands that winning loyalty from subscribers requires meeting the consumers’ set standards. “Brands that treat subscriptions as a set-it-and-forget-it model will lose trust. And shipping matters more than you think — a late or damaged delivery isn’t just an inconvenience, it’s a dealbreaker.”
As found in the survey data, an elevated shipping experience is at the crux of why many consumers choose to subscribe to brands’ programs with shipping quality making or breaking loyalty. Customers expect subscription services to run quickly and smoothly and brands that operate with hassle-free customer service when there are issues are paramount.
Survey data found that 69 percent of consumers say that “quick resolution of shipping issues makes them more likely to stay subscribed” and another 69 percent agreed that they “expect problems to be resolved within 24 hours for a great experience.” Twenty-seven percent of consumers also said that “delayed or missed shipments are their biggest frustration” and 24 percent cited “damaged or incomplete orders” as a major pain point.
“One of the most surprising findings was that 79 percent of consumers directly tie their subscription retention to reliable shipping and product condition,” Spitale said. “While product quality isn’t surprising, this shows that the last mile is just as critical as pricing or perks. Many brands focus on discounts and exclusivity, but logistics and dependability are non-negotiable.”
UPS Capital’s report found that 65 percent of consumers believe that “shipping quality is important to keeping a subscription” and 35 percent “would cancel if delays, lost items or damages occur too often.”
Best of WWD
Sign up for WWD's Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.
Solve the daily Crossword
