As aggregators contend with their customers’ multi-brand loyalty, leading players are leveraging their subscription programs in an effort to become members’ sole choice for restaurant delivery ordering. However, with the monthly cost of these offerings, it can be difficult for providers to drive adoption and retention.
DoorDash, for its part, is looking to create value for subscribers by getting into exclusive product drops. On Wednesday (June 8), the aggregator announced the first such drop, a hot sauce in collaboration with musical artist Chlöe Bailey going live Thursday (June 9) at 3 p.m. ET.
The move to offer this additional exclusivity could be the differentiating factor between DoorDash’s DashPass membership program and competitors Grubhub’s Grubhub+ and Uber Eats’ Eats Pass, all of which operate with a similar business model and offer similar value.
By the Numbers
According to data from PYMNTS’ recent study, Relationship Commerce: Building Long-Term Brand Engagement, created in collaboration with Ordergroove , which drew from a survey of more than 2,800 consumers participating in a blend of subscription, finds that membership boosts spending significantly. About three quarters of consumers with memberships say they will buy more products from the brands of which they are members, and the majority of these members view exclusive deals and offers such as free shipping as the most important benefits of these programs.
Brands need to make a concerted effort to maintain their relationships with subscribers as inflation results in many consumers pulling back. Research from PYMNTS’ May Subscription Commerce Conversion Index, a collaboration with sticky.io, which drew from a survey of over 1,900 U.S. consumers, found that the average subscriber has dropped one of their five retail subscriptions since October, and the most common reason that consumers gave for canceling subscriptions as of the latest survey was to reduce expenses.
What Insiders Are Saying
For some brands, this kind of churn is far from the worst-case scenario. In fact, Jalem Getz, CEO and president of Wantable, a try-before-you-buy online retailer that employs style experts and technology to handpick apparel or active gear based on a customer’s budget, size and style, said in an interview with PYMNTS for the May edition of the Subscription Commerce Tracker, a PYMNTS and Vindicia collaboration, that allowing subscribers to come and go as they please is key to long-term loyalty.
“We invite the churn because we believe in our model intrinsically that customers are going to want to opt out and then come back,” Getz said. “We’re betting that they’re going to come back, so we actually bring down the walls of opting out [of] the subscription and make it much easier.”
With initiatives such as DoorDash’s product drop, subscription services can help foster a sense of exclusive membership.
As Sanjay Kamble, vice president of product management at sticky.io, put it in a PYMNTS TV interview in April, “We have seen that the most successful subscription brands deliver convenience value, flexibility to their customers, and they’re not just selling high-quality products — they’re building communities and membership.”