Are subscription services the key to retail success in 2019?

There has been plenty of research over the last few months indicating that a vast majority of Australians (72 per cent) shop on their mobiles.

However, only 55 per cent of Australian businesses are optimised for mobile payments, according to the 2018 PayPal mCommerce Index.

Subscription services are emerging as a shopper favourite with half of the Australian population already using at least one subscription service and spending an average of $32 per month on subscriptions.

“While subscription services are most popular with younger shoppers, adoption is strong across all demographics and the popularity of these ‘set and forget’ services is paying off for businesses,” says Libby Roy, PayPal Australia managing director.

“Despite strong uptake of subscription services, our research found that only one in 10 Australian businesses (11 per cent) currently offers subscriptions, revealing an opportunity for businesses looking to improve customer loyalty and maintain a recurring revenue stream,” she says.

The index found that almost half of Australians who buy via mobile do so at least once a week and in line with this nearly 18 per cent now attribute more than half of their sales to m-commerce.

“As consumer dependency on technology accelerates, so too do expectations of mobile experiences. Our research found that nearly half of Australians (47 per cent) are annoyed when a site doesn’t work well on a mobile and almost a third (30 per cent) of mobile shoppers have abandoned a purchase due to lack of mobile-optimisation or because of security concerns (29 per cent).”

For Sarah Hamilton, co-founder and managing director of bellabox Australia, a monthly subscription service has proved invaluable for the business.

“The advantage of our subscription model is that bellabox customers can receive a curated box every month which feels like a present delivered to their desk or door,” she says.

“When our customers discover the new products, which are customised to their personal preferences, inside the box, there’s a definite happiness and surprise factor each month.

“For bellabox, the mobile experience is of utmost importance. Customers want to be able to subscribe and update their details at any time and from anywhere. Increasingly, the online experience our customers have with us is becoming just as important as the products they receive each month.”