US subscription brands will have to work harder to win customers in 2022, according to new data that shows the pandemic boom is starting to wear off.
When we polled consumers about product subscriptions in November 2020, 47% of respondents said they had a product subscription. As of August 2021, that figure has dropped to 41% (check out the data).
49% of Millennials have a product subscription
People are also less likely to have multiple product subscriptions; only 18% have more than one now, compared with 21% last year. Interestingly, the number of people who say they have never had a product subscription remains consistent at 29%, which means brands have not been successful in tempting this segment over the last nine months.
Millennials are the demographic most committed to product subscriptions; 25% of those aged 26-40 currently have one, and 24% have more than one. Meanwhile, Gen X (aged 41-55) are most likely to say they had a product subscription in the past but not now (32%), indicating subscriptions may have failed to deliver value for this age group.
Food and drink still rules
A ton of new food and drink subscription offerings sprung up as the pandemic forced restaurants to close, and they remain the most popular type of subscription box. Of those respondents who have a product subscription, 37% of them say they have a food or drink subscription. But this is followed closely by personal care or health/fitness subscriptions; 36% have this type of subscription (Millennials, in particular, love them).
Where we can see a change is with pet product subscriptions; in 2020, this was only the fifth most popular type of subscription box, but now it’s third. Just over 32% of respondents subscribe to a pet product box, such as BarkBox or meowbox. This growth is being driven by older consumers, with Gen X and Boomers more likely to buy them than their younger counterparts (in fact, pet products are the most popular subscription type among Americans aged 56-66; 35% have one).
Pet product boxes are the third most popular type of subscription
Rising to fourth place is toiletries and cosmetics (30%), pushing clothing and shoes down to fifth (29%). Millennials are significantly more likely to have a toiletries or cosmetics subscription than Gen Z (aged 18-25); 35% versus 25%. Gen Z prefer clothing and shoes (34%).
Subscription boxes that relate to hobbies, such as reading or gardening, are the sixth most popular type overall (22%). While bags and jewelry and kids’ interest come in seventh and eighth (subscribed to by 14% and 13% respectively). Bags and jewelry see slight growth on 2020, when this type of subscription ranked last.
Easy access biggest reason for subscribing
Compared with when we asked Americans in November 2020, we see a big increase in the number of people who say they purchased a product subscription primarily because it’s delivered straight to their door (doubling from 16% to 32%).
We see a decline in all other drivers, besides not being able to get the brand in store (rising from 5% to 6%). Notably, purchasing a product subscription because you love the brand or brand ethos has dropped from 18% to just 10%, which will no doubt come as a bit of a reality check for marketers.
Only 10% of Americans purchased their product subscription because they love the brand
The second biggest motivator for signing up to a product subscription is that it provides good value (falling from 23% to 22%). Meanwhile, 16% purchased because it provides them with a regular treat (down from 19%). A further 13% were tempted by the convenience offered by subscriptions such as meal kits (down from 17%).
There are some differences in drivers between the demographics, with Boomers, for example, more than two times as likely as Gen Z to have taken out a subscription because it’s delivered directly to their door (45% versus 21.5%). Gen Z, on the other hand, are most likely to subscribe because it provides good value (23%). They’re also the most likely group to purchase a subscription because they love a brand (16%).
Purchase intent is down but minds remain open
So what’s the outlook for product subscriptions in Q4 and beyond? Our data shows a decline in the number of Americans actively looking for a new product subscription; down from 18% in 2020 to 14% today.
However, it’s not all bad news because there are actually more consumers who are open minded to purchasing a subscription. Only 21% say they’re unlikely to consider a subscription, which is down from 27% last year.
Millennials are most likely to be scoping out product subscriptions (17.5%), while Boomers are least likely (6%). Meanwhile, 16% of Gen Z and 14% of Gen X say they’re currently looking at subscription options.
The main reason Americans are unlikely to consider a product subscription is that they can’t afford it (35.5%). A fear of getting locked in is putting off 23.5% of people (it’s especially off-putting for Boomers, 31% of whom say this). But it’s something brands can combat with flexible subscription terms and easy cancellation.
The primary reason for a further 22.5% is that they just don’t feel the need. Likewise, 10% of people aren’t likely to subscribe simply because they don’t see anything that interests them. This begs the question – how can you make your offering more compelling? We see particular despondency among Gen Z, with 27% not feeling the need for a new product subscription and 16% not seeing anything that interests them. It highlights a need to innovate for this age group.
23.5% of consumers who aren’t interested in product subscriptions say it’s because they don’t want to be locked in
On the plus side, only 5% of respondents say they already have too many subscriptions to consider another, which shows the market has not reached saturation point, despite the increase in product subscription availability.
Bel has a background in newspaper and magazine journalism but loves to geek-out with Attest consumer data to write in-depth reports. Inherently nosy, she's endlessly excited to pose questions to Attest's audience of 100m global consumers. She also likes cake.