Inside the Box:

What Drives Consumer Subscription Adoption

The idea of subscriptions isn’t new: print media has been offering subscriptions to magazines and newspapers for over a century, and if you were alive during the 1990s, odds are you remember CD subscription clubs such as Columbia House. Fast-forward to today, and we can now get virtually anything we want delivered to our front door.

As the world slowly adjusts to post-pandemic realities, subscription experiences are reaching an inflection point. While they were once a nice-to-have shopping experience, they’re now necessary for many consumers.

To better understand how brands can capture a share of this projected $478 billion industry, Ordergroove conducted a survey to uncover consumer sentiment and behavior around subscription experiences — who subscribes, how often, and the types of products they receive. Our findings underscore a delicate balance that brands must meet between product, price, convenience, and necessity to succeed when offering products via subscriptions.

Coffee is an example of a consumable good that's perfect for subscriptions.

Takeaway 1:

Subscriptions are in high demand

More than half (52%) of respondents have between two to five products delivered via subscription. A third of men subscribe to six or more product deliveries, compared to just 20% of women.

Which types of products
are subscribed to most?

Takeaway 2:

Discounts, convenience drive subscriptions

More than a quarter (26%) of respondents said that discounts motivated their subscription, with an additional 27% citing convenience. Women (60%) most often cited discounts as the reason for subscribing to product deliveries, while men (51%) cited convenience. Digging deeper, nearly three-quarters (73%) of female respondents said a deeper discount would make them less wary of signing up for a subscription, with 70% stating that they would switch brands for a better or larger discount.

When those who did not subscribe to these services were asked what held them back, cost was cited by more than 20% of respondents, with an additional 14% stating they were afraid they would forget about the charge.

Brands can increase their subscriber base by helping consumers overcome their hesitation to commit to a recurring delivery of a product by offering subscription discounts, cited by 38% of respondents, and offering clear instructions on how to manage, suspend, or cancel the subscription (37%).

What motivates consumers to subscribe?

Takeaway 3:

Men, Millennials go for convenience

Millennials prefer brands that “are convenient” and “make life easier” (55%), with 59% enrolling in subscription services. Note that Gen Z comes in second (22%) and could well overtake Millennials as the cohort’s buying power grows.

Similarly, nearly two-thirds (61%) of men say they will select a brand if it makes their life easier, and an additional 51% say they would spend more money to save time.

Which generations
prefer convenience-focused
brands?

Turn insight into action

Make it flexible

As the survey data demonstrates, consumers are hesitant to enroll in a subscription experience when the terms of the arrangement are unclear or the experience is difficult to navigate. Design your subscription service with an easy-to-navigate system that provides customers the ability to hit pause or skip an order or switch out products. The ability to suspend or change a delivery can prevent customer churn when a consumer has not yet used a previously delivered product. Without it, the consumer’s only option is to cancel.

Offer incentives

Survey respondents cited value for money and discounts as a key driver of subscriptions. While discounts are powerful, they can take away from the bottom line. Get creative about other types of incentives to offer in response to a customer’s loyalty. Free shipping is table stakes in today’s eCommerce world, but other types of perks can be offered. For example, retention rewards encourage repeat or recurring orders after a specific number of orders.

Surprise and delight

As subscriptions grow in popularity, brands must find ways to differentiate their experience from their competitors. Surprise and delight experiences build customer loyalty while driving retention. In our experience, merchants have seen success by offering surprise discounts and unexpected gifts with purchase. Both incentives reinforce value.

Give it a try

If you have a product that would make a good fit for a subscription, just try it out. The data shows that consumers clearly want subscriptions, and there is money to be made if you give them this option. Until you do, you’ll need to continually fight for mindshare, which is not the best use of resources.

Methodology

In February 2022, Ordergroove polled 1,000 men and women between the ages of 18 and 65 in the U.S. The survey was conducted via the online consumer survey platform Pollfish between Feb. 1 and 2, 2022.

Who responded?