In the modern age, it’s much rarer that a service is provided in a subscription services model than not.
While the skyrocketing popularity of subscription models has been sudden, it seems unlikely that they’ll be removed as quickly.
There are over 225 million subscriptions in the U.S. alone, growing 3.7 times quicker than the S&P 500.
With an estimated 61 million users, nearly four subscriptions per person. But how do these subscription services break down?
Subscription Services Breakdowns
Most subscription services are for curated consumer products like Birchbox and FabFitFun, which provide beauty products, clothes, and even dog toys.
Behind curated services, replenishment subscription services currently capture around 32% of the subscription service market.
Services, like Dollar Shave Club and Amazon’s Subscribe and Save, are aimed at quick and easy fulfillment of products needed monthly.
The last type of subscription model is membership.
Services such as Amazon Prime and Sam’s Club Membership are the most common in this category. But what drives the underlying growth?
Many consumers say these services are convenient, engaging, and incredibly simple. 22.7% use subscriptions for convenience, with 14.1% claiming services are cost-effective.
This concept of convenience is at its peak with replenishment services such as Amazon’s Subscribe and Save.
Since you can get items on a customized schedule based on utilization, deliveries can be personalized, and multiple subscription goods can be easily managed.
All these benefits were even more valuable due to the COVID-19 lockdowns.
Between the shutdown of normal channels for purchasing products and the need for convenience in hectic times, it is no wonder why subscription models grew by 11.6% during the pandemic. However, this growth has allowed for the creation of new industries.
Companies such as MyGardenBox and The Sill ship houseplants to customers every month.
These plants are customized to your household conditions and need for pet- and child-friendly plant species.
Similarly, science companies like KiwiCo and Matter deliver science projects at a discounted rate to help reimagine learning for younger audiences.
Another recurring expense for printers is toner or ink. With subscription services like Lexmark, you can save on toner costs and pay toner costs on a ‘pay-as-you-go’ basis.
Ultimately, new subscription models have many advantages and allow entirely new markets to exist.
The emergence of all new subscription services ensures that subscription models are here to stay.
Brian Wallace is the Founder and President of NowSourcing, an industry-leading content marketing agency that makes the world’s ideas simple, visual, and influential. Brian has been named a Google Small Business Advisor for 2016-present, joined the SXSW Advisory Board in 2019-present and became an SMB advisor for Lexmark in 2023.