CPG and Retail Advertising News


Ecommerce Growth Leads Many Brands To Adopt Subscription Strategies

November 6, 2020 Sarah Cavill

In 2020, ecommerce became the darling of shoppers who needed safe, efficient ways to shop, and brands that needed to meet new consumer behaviors while scaling sales. Meeting the demands of going digital in 2020 requires quick thinking, smart advertising strategies and alternative revenue options, with subscriptions becoming a more scalable and popular option for many brands. In a recent study, “The State of B2B Subscription Commerce in the New Normal,” 69% of companies reported “that they have accelerated digital plans or launched new projects.” 

Brands And Consumers Find Benefits From Subscriptions As Ecommerce Grows

Many consumers are clamoring for subscriptions, making subscription products and services smart digital options for brands that want to reach more consumers and capitalize on ecommerce revenues. Companies that sell meal kits saw big upticks during the pandemic while consumers were cooking at home instead of going out. And, many CPG brands, like Pepsi, launched direct-to-consumer (DTC) offerings that are likely to include a subscription option eventually

Most Companies Offer Some Sort of Subscription Product Or Service

The “The State of B2B Subscription Commerce in the New Normal” study found that 95% of companies have some sort of subscription offering, but there are distinct differences between the kinds of companies that embrace subscription options. For example, 86% of companies with subscriptions are less than 10 years old, and 79% of companies with subscriptions have yearly revenues of more than $500 million.

These distinctions likely indicate that many start-ups and younger brands embrace the subscription trend. And, alternatively, that big, successful brands can capture a share of revenue from subscriptions without it impacting their bottom line very much if it goes south, allowing for experimentation. As ecommerce continues to surge and consumer behaviors shift, brands that are willing to leverage subscription offerings with existing customers, or take calculated risks to reach new audiences, may find themselves in better positions now and in the future.

Subscription Services Have Been Resilient During 2020 As Online Use Grew

The 2020 edition of the Subscription Economy Index found that while some businesses have seen sales decrease, “subscription businesses actually expanded at a rate of 12%.” And, while ecommerce may be the star this year, services, like streaming and publishing, have seen success during the pandemic, which highlights the move to more online use for so many consumers. “Some of this [subscription] growth is being driven by the digital media, streaming and publishing services industries, as many consumers who are social distancing seek outlets that can help them stay entertained and abreast of news developments,” found PYMNTS latest Subscription Commerce Tracker, “especially those related to the current health crisis. The New York Times witnessed 14% growth in its most recent quarter, with its total number of subscribers reaching a record 5.7 million.” 

Brands of all types are looking to scale revenues and subscribers during a time when the economy may be more volatile. And, across sectors, from CPG to streaming, subscriptions provide digital solutions cognizant of the dominance of ecommerce and changing consumer behaviors. Subscriptions bring value and convenience to consumers, and they offer digital advertisers first party data about their customers and future opportunities to target and increase engagement. 

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About the Author

Sarah Cavill

With more than 20 years of writing, editing and reporting experience, Sarah Cavill brings to Digital Media Solutions (DMS) a fine-tuned and diverse set of skills. Her work has been featured in notable publications including The Daily Muse, CBS Local, Techlicious and Glamour magazine. Sarah has a passion for current events and the deep-dive research that goes into the content development and brand identity of DMS Insights. In her role as Senior Marketing Communications Writer, Sarah contributes to the pitching, researching and writing of multiple stories published each week surrounding digital and performance marketing innovations in pop culture, news, social media, branding and advertising.

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