The ecommerce industry is evolving rapidly — with no signs of slowing down. And while acquisition still plays a role, the rising trend within the subscription economy emphasizes building long-term relationships with customers.

According to The State of Subscriptions report, subscriber counts are growing by 15.4% year-over-year. Yet, challenges like a 4% decline in the retail and consumer goods growth underscores the importance of refining retention strategies.

To help ecommerce brands like yours thrive, we’ve created this ecommerce subscriptions playbook — filled with insights, data, and strategies to shift your focus from transactions to retention and ensure your customers stick around for longer.

💡 Keep reading to get some the highlights or check out the full guide now

Ecommerce growth shifts to retention

The ecommerce boom is undeniable, but the challenges that come with it are just as significant. Acquisition rates have dropped from 4.1% in 2021 to 2.8% in 2024 — the result of a saturated market and rising costs to secure new customers. At the same time, subscriber churn remains a consistent challenge, with up to 40% of subscribers canceling their subscriptions.

Retention-focused strategies are no longer optional. Winning the first month is critical, as data shows that if customers aren’t engaged within the first 30 days, subscriber retention drops. To combat this, ecommerce brands need a structured engagement program with welcome messages and usage tips, loyalty programs, and win-back campaigns. 

Pro tip: Develop engagement scoring systems to identify at-risk customers and allocate resources to retain them before it’s too late.

Subscription expectations to address

Today’s consumers expect — and demand — flexibility, personalization, and frictionless experiences. Our data highlights four critical expectations that ecommerce subscription merchants need to meet:

1. Flexible plan structures

Customers want subscriptions that fit their needs. Offering customizable plans, such as monthly or annual options, can significantly improve retention. Flexible options are becoming the norm, with a 54% increase in subscription pause in 2024, generating over $200 million from reactivated customers.

2. Payment and pricing optimization

Payment issues are often overlooked. Traditional payment methods like debit and credit cards have high decline rates, with fraud-based declines as high as 16.7%. Instead, adopting alternative payment methods (APMs) like digital wallets or buy-now-pay-later solutions can reduce fraud rates to just 1.4%. Additionally, experimenting with pricing strategies like ramp pricing or offering discounts for long-term commitments can enhance customer loyalty.

Pro tip: Communicate the value of long-term plans upfront. For example, emphasize how annual subscriptions offer the best savings.

3. Listening to your customers

Sometimes, customers cancel subscriptions not because they don’t want the product, but because they need a break — like the college student going on summer vacation that can’t receive their skincare box-of-the-month. 

Offering options to pause their plan instead of canceling altogether preserves your connection with them and allows you to bring them back later. Customers who pause their plans are 51.7% more likely to return compared to those who cancel entirely.

4. Loyalty programs that work

Loyalty programs are proven customer retention tools. Nearly 60% of consumers value rewards and loyalty points, while 70% recommend brands with strong loyalty programs. Tiered systems based on spending or tenure can encourage repeat business and foster brand advocacy.

Pro tip: Include perks like exclusive products or early access to new launches to make subscribers feel valued.

Solving subscription challenges with technology

When scaled across thousands of customers, even small churn rates can lead to significant revenue loss. Technology is now essential for solving subscription challenges, with 61% of merchants using subscription management software to automate workflows and 41% adopting CRM systems for personalization.

Key solutions include:

  • Churn prediction dashboards: Use real-time customer data to identify at-risk subscribers and trigger automated retention campaigns

  • AI-powered personalization: Offer tailored product recommendations that track customer preferences and adapt to changing needs

  • Revenue recovery via dunning management: Automated billing systems can recover failed payments and reduce involuntary churn

Our data shows that effective dunning management alone helped recover over $36 million for ecommerce merchants in the consumer goods sector. Investing in these technologies not only reduces churn but also enhances customer satisfaction, leading to increased retention and revenue.

Next steps to retain more customers

To thrive in the subscription economy, ecommerce merchants need to shift their focus to retention as a growth strategy. 

Implementing flexible plans, optimizing payment options, and leveraging technology are the foundation of a successful subscription model. Plus, building loyalty through rewards programs and offering personalized experiences are key to making customers feel valued.

Get even more insights and strategies in ecommerce subscriptions playbook. Check it out now. 

Want to learn more about retaining subscribers and driving sustainable growth? Explore Recurly Commerce — a modern ecommerce solution built for fast-moving teams and designed to deliver exceptional subscriber experiences at scale.