Marketing Strategies for the United States: Subscription Ecommerce

Netflix-style subscriptions are an effective marketing tool to retain American consumers in many sectors of the US market

After the arrival of Covid, more and more consumers in America turned to subscription services while staying home. This shift in consumer preferences provided a strategic advantage to those companies in the USA that already adopted a subscription-based business model. Subscription marketing is a strategy for the United States designed to acquire new customers and especially retain regular ones. The best thing about using this marketing strategy in America is that customer loyalty is an integral part of the business model. Offering discounts and benefits to regular customers indeed increases the chances of retaining consumers, resulting in a decreased churn rate: if in 2019, the churn rates of companies in the USA that leveraged subscription marketing were at 6.5%, by 2021, they reached 5.4%.

Why subscription marketing is a more advantageous growth strategy in the American market compared to other ecommerce models in the United States

The success of subscription-based businesses depends on the ability to create long-term engagement [and provide value]

By definition, companies selling subscription products or services in America rely on subscribed consumers and therefore aim to satisfy regular customers. In contrast, most ecommerce sites still focus on acquisition rather than retention. Since the success of businesses in the United States largely depends on regular brand consumers, it's easy to see why subscription-based companies have an advantage over other ecommerce models. The key to succeeding with this marketing strategy in the USA is to offer American consumers new products and services continuously, convincing them to pay a monthly fee. Netflix, for example, has a valuable offer because it constantly updates its streaming catalog. This means that even if a customer finished the entire streaming platform catalog in a month, they would be sure to get new content the next month, and consequently, renew their subscription.

Other companies in America are adopting Netflix's subscription-based business model

Targeted marketing strategies are needed to increase the Lifetime Value of regular American consumers: selling subscription products and services in the United States is a marathon, not a sprint

Many companies operating in the American market are discovering the power of subscriptions to boost sales in the United States. This marketing strategy for the USA allows building strong relationships between consumers and companies in the American market and ensuring steady monthly revenues.

• Sweetgreen, a fast-casual restaurant, is experimenting with a subscription program in the USA, offering American consumers a three-dollar credit per day for $10 a month; 
• Taco Bell invited its customers to try thirty tacos in thirty days for $10.
• Panera, Pret a Manger, and many brands in the USA Beverage sector offer coffee subscriptions.

It will be interesting to see how these American brands will develop their business model to increase the chances of retaining customers in the United States.

The subscription ecommerce trend is rapidly growing in the United States: in 2023, it will generate more than 38 billion in revenue, double that of 2019

In summary:

1. Subscriptions are an increasingly common way in America to purchase products and services online.
2. While streaming platform subscriptions are more popular, American consumers have also started subscribing to purchase consumer goods.
3. Consumers do not have an intrinsic love for subscriptions. Rather, they desire quality shopping experiences and are willing to subscribe only where the monthly payment offers tangible benefits (lower costs or greater customization).

The subscription ecommerce market is rapidly growing: companies that want to adopt this innovative marketing strategy for the United States must develop great ideas to capture a share of the market and accelerate both growth and profitability of their business in America.