The U.S. is seeing a significant uptick in subscription usage in recent years. There are currently 225 million subscriptions in use in the U.S. with 61 million active subscribers. That’s 3.7 subscriptions per person.
The Rise of Subscription Models
Subscription services come in various forms, from direct to consumer to business-to-business. There are at least 27,000 direct to consumer subscription services selling straight to customers right now. Curated services include media and physical products while replenishment mainly focuses on groceries, office supplies, and toiletries. The smallest portion of subscription services is membership/access, which consists of membership benefits and giveaways.
Subscription models have increased in popularity due to it being convenient, very simple, and engaging for both consumers and business owners. 39% of subscribers say they subscribed because subscriptions are cost-effective while 40% of U.S. consumers say they use subscriptions due to their convenience, especially when it comes to their time and budgets. The replenishment subscription model makes use of usage-based pricing so consumers can get items when they need them, not just on a regular basis.
Changing demographics has also caused increased usage of subscription models. Younger generations seem to prefer subscribing to digital and physical subscription services compared to those who are older. COVID has also increased subscription usage due to the inability to get products through normal channels. In fact, subscription-based businesses grew by almost 12% during the pandemic while non-subscription based businesses shrank by about 2%. It’s also fair to say that some subscriptions are just plain fun to have and use.
Conclusion
With the growth of the subscription industry, we can expect more industries getting into offering subscriptions for the first time. These industries can range from plants and science to even print. The way we track our subscriptions is also likely to change. There is no doubt that the subscription model will be around for a long time.
