Another new year is about to roll round and all signs suggest it will be a big one for the subscription commerce sector. It’s already valued at an extraordinary $US2 trillion globally, according to SUBTA research, and its popularity with both businesses and consumers shows no sign of abating.
But that’s not to say making a success of subscription selling is easy. On the contrary. It’s a hotly contested space and 2025 will see local operators having to work harder than ever to maintain mind and market share.
Here are some of the subscription commerce trends we can expect to see playing out in 2025.
Subscription fatigue setting in
Australians love subscriptions – up to a point. Take out too many and keeping track of them can start to feel like hard work. It can get expensive too, at a time when millions of individuals are looking for savings to help them combat the country’s long running cost of living crisis. Welcome to the phenomenon that’s been dubbed ‘subscription fatigue’.
Rationalisation is the usual antidote and we’re likely to see plenty of it in 2025 as Australians work out what’s important to them and what they can do without. Subscription businesses that don’t want to find themselves relegated to the latter category will need to work harder than ever to make their offerings relevant, compelling and competitive.
Bundling bonanza
One way to discourage customers from scrapping their discretionary subscriptions is to bundle them up with the subscriptions they have to have and offer the lot at an attractive discount.
Utilities and telcos are already busy in this space and, over the next 12 months, they’ll be joined by a host of other organisations – think insurers, airlines and supermarket chains – all looking to generate more revenue from their established customer bases.
Doing more with data
Succeeding in the subscription space is every bit as much about retaining customers as it is about attracting them. Understanding what drives purchasing patterns and behaviour can help businesses devise strategies that boost customer satisfaction and reduce churn. That’s where data analytics, powered by AI and machine learning, has a leading part to play.
Watch more businesses start to harness its power in 2025 to forecast which customers are most likely to leave – and watch them target those customers with offers encouraging them to stay.
Personalisation perfected
Those offers will become increasingly personalised as savvy subscription businesses embark on a quest to turn the concept of the ‘marketplace of one’ into a commercial reality.
Those that have access to real time data on how their customers are engaging with them will continue to develop automated campaigns that deliver the right offer at the right time, to the right person.
Getting serious about cyber security
A series of high-profile attacks in recent years has raised public awareness of cyber risk and been the catalyst for increased scrutiny of organisations’ privacy and security regimens. Compliance standards – and the penalties for organisations that fail to adhere to them – may continue to rise over the next 12 months, as may the Information Commissioner’s appetite for cracking down on businesses that don’t maintain robust privacy and cyber-defence practices.
As custodians of a wealth of personal and financial data, subscription businesses have much to lose – financially and reputationally – from a major attack or data breach. Substantial investment in platforms, programs and practices to mitigate the risk is likely to be on the cards for organisations that have yet to make cyber-security a priority.
Putting ESG on the agenda
In recent years, sustainability has become a key focus for Australian businesses of all stripes and sizes. That’s set to continue into 2025, with ESG reporting becoming mandatory for large organisations from 1 January. Meanwhile, customers have become increasingly keen to understand how the businesses they buy from are mitigating climate risk. Irrespective of whether they’re selling streaming services or sauvignon blanc, we can expect to see subscription providers concentrating on their ESG credentials.
Tools to make the task easy
Keeping pace with the latest trends in the subscription space is significantly easier with the right tools, namely subscription management technology that enables you to monetise, scale, market and manage your subscription offerings quickly and cost effectively.
Ideally, you’ll deploy a platform that lets you establish seamless data flow across all divisions of your business, view and manage customers’ information via a single hub, and harness the power of AI-powered analytics to deliver personalised interactions that drive engagement and results.
If staying ahead of the curve is important to you in 2025 and beyond, it’s mission critical technology that should be at the centre of your ICT stack.
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