From meal kits to wardrobe upgrades, new entrants in the increasingly crowded subscription commerce space keep emerging. Just this week, auto-replenishment company Harry's launched a women's line of hair removal products called Flamingo.
According to a McKinsey, subscription commerce retailers grew sales from $57.0 million in 2011 to over $2.6 billion in 2016. Established companies, including big-box stores, supermarkets and consumer packaged goods (CPG) conglomerates, have gotten on board for a piece of the action. In 2016, Unilever bought Dollar Shave Club for $1 billion, and last year Albertsons acquired meal-kit brand Plated for over $200 million.
But how do consumers feel about subscription services?
To find out, Salsify asked US digital shoppers where they planned to do more shopping. Subscription services were near the bottom of the list, cited by only 8%.
McKinsey identified three types of subscription services: replenishment (e.g., diapers or razors), curation (e.g., fashion or food) and access (getting members-only benefits). Each type has different primary drivers, as summarized in this chart.
Users cancelled replenishment subscriptions primarily due to product quality and wanting to buy when they felt like it, while curation and access subscriptions were dropped most because of poor value.