The latest PayPal mCommerce Index claims subscription services are creating a new era of online purchasing and selling. In fact, consumers aged between 18-34 say they want access to subscriptions across multiple shopping categories.
The popularity of mobile commerce is changing the face of the Australian e-commerce scene. According to the latest PayPal mobile commerce report, 72 percent of Australians are now shopping on their mobiles, despite only 55 percent of businesses being equipped to accept mobile payments. This year has also seen a 32 percent jump in sales generated through mobile shopping, up from 19 percent in 2017 to 25 percent in 2018.
Interestingly, 86 percent of Australian businesses have also said they experienced a significant increase in revenue after implementing some form of a subscription model. One in three of these companies says revenue has increased by more than 30 percent. A further 37 percent of online businesses recognise that subscription services can improve customer retention, while 35 percent say they believe it helps drive recurring revenue streams.
According to Libby Roy, PayPal Australia’s managing director, subscription services are becoming more popular among consumers across all demographics.
“While subscription services are most popular with younger shoppers, adoption is strong across all demographics and the popularity of these ‘set and forget’ services are paying off for businesses.”
However, only a small percentage of online retailers offer subscription-based services.
“Despite strong uptake of subscription services, our research found that only one-in-ten Australian businesses (11 percent) currently offers subscriptions, revealing an opportunity for businesses looking to improve customer loyalty and maintain a recurring revenue stream,” Roy says.
PayPal’s research also suggests that while movies, music, and software companies currently dominate the online subscriptions market, consumers want to see more.
Younger shoppers reportedly expressed interest in signing up for subscriptions services in the beauty, skincare, freshly prepared meals, and clothing and activewear categories, as well as pet accessories.
One example of an online beauty business taking advantage of this new shopping market is bellabox. Offering a monthly subscription beauty box delivery service, Co-Founder and Managing Director, Sarah Hamilton says the service has opened up a new wave of mobile customers that value the service itself as much as the products.
“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,” Hamilton says.
According to Hamilton, easy opt-out solutions and no lock-in contracts have proven popular among her customers.
“For businesses considering adopting a subscription model, our research found that having no lock-in contracts and easy opt-out solutions; being able to pay securely; receiving discounts or subscriber benefits, and having a mobile-optimised service are all critical factors when it comes to driving consumer sign-up.”
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