Five Charts: How Consumers Really Feel About Subscriptions  

New entrants keep debuting, but consumer interest is mixed. 

Author: Krista Garcia

October 18, 2018

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. 

Beyond those three categories, subscriptions cover a wide variety of services, some more integral to daily life than others. Close to three-fourths of US paid subscribers subscribe to a Netflix-type service, according to Fetch, while 18% subscribe to a fashion or beauty box service. 

The ability to receive trial sizes of often expensive products like makeup or fragrances is one reason why beauty boxes are popular, though sampling doesn't apply to all subscription commerce offerings. Per GPShopper data, very few US internet users said they discovered a new favorite brand (8%) or became a repeat customer (7%) because of a subscription box. 

Most subscription services are nice-to-haves rather than necessities. Beauty boxes (28%), meal kits (26%) and wardrobe subscriptions (23%) ranked last on a list of "digital disruptor" services that US internet users would miss if they were gone, according to Toluna

That said, roughly a quarter of US internet users would be concerned if they lost access to those three categories of services, which isn't an insignificant figure.