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Data for today’s episode is provided by Mercator Advisory Group’s Blog – Subscription Economy Accelerates as Stay-At-Home Lifestyle Spurs Demand
Subscription Bundling Becomes Winning Seller Strategy:
- In 2019, 60% of consumers subscribed to some kind of online service like streaming music or video.
- Since Covid-19, over 25% of US consumers have added at least one streaming service.
- 46% of consumers subscribe to a video streaming service.
- 23% of consumers subscribe to a music streaming service.
- The greatest challenge confronting sellers of subscriptions services is customer turnover, and the most effective tactic for turnover is bundling.
- Combining multiple services together, consumers perceive value when they pay less for several items packaged together than if purchased separately.
The subscriptions economy has become a growth segment of the U.S. services economy. While subscriptions go back many years, it’s been the digitization of commerce and consumer purchase behavior that now drives the subscriptions market. Through 2022, online subscriptions will find higher growth due to continued consumer popularity of streaming services and software. Payments firms, including ISVs, merchant acquirers, and payment gateways, must understand the subscription management requirements of sellers and key trends that are driving market growth. A new research report from Mercator Advisory Group, Subscription Economy Accelerates as Stay-At-Home Lifestyle Spurs Demand, sizes up the U.S. online subscriptions market and its future direction.
“Video and music streaming has led the rapid growth of online subscription services for stay-at-home households during 2020. Online subscriptions have become a growth area within e-commerce and will continue in the foreseeable future. Bundled subscriptions prove to be a winning marketing strategy for the leading industry players such as Amazon and Apple and consumers have responded enthusiastically,” commented Raymond Pucci, Director, Merchant Services Practice at Mercator Advisory Group, the author of this report.