At more American homes, the box kit is getting the drop kick. And for retailers, that’s a foot out the door of profitability.
Retail subscriptions, those automatic replenishment services that fulfill household needs ranging from pet food to celebrity autographs, are getting a lot of “please cancel” requests following their pandemic-induced heyday. In March 2022, the number of retail subscriptions per average U.S. consumer (not household) had declined to 3.9, from five in October 2021, according to PYMNTS.com.
Back in 2020, each consumer on average belonged to fewer than two retail subscriptions, Forbes reported in May. But then the pandemic lockdown forced people to order their goods online: From February 2020 to July 2021, the share of consumers subscribing to retail product services escalated from fewer than 9% to 24%, PYMENTS reports.
And as a result, a crop of retail subscriptions emerged, for fishing tackle, face masks and even animal skulls (thanks, BuzzFeed).
Subscribing To A Theory: Quality, Convenience
A review of the reasons people enrolled in subscription services back in 2021, as well as the demographics, untangles the reasons why so many people have cut back on a subscription or two since then:
- 15% of all shoppers said they saved money by subscribing. Among Gen Xers, the figure was nearly 19%, and millennials, 17%, PYMNTS 2021 research shows.
- Nearly 17% of Gen Xers and 26% of millennials said subscriptions were more convenient than going to the store.
- 25% of millennials believed subscriptions offered better-quality items than did other sources.
Now, Practicality Is In Order
There’s one other reason a good share of consumers invested in retail subscriptions: for the excitement of it. In the midst of the lockdown, a box filled with bite-sized cakes or kitchen gadgets could really knock the wind out of the tedium. It was worth the price of enrolling.
By early 2022, when the price of a three-pound bag of oranges approached $6, CNBC has reported, those good mail-order vibes started to slide.
But not entirely. In cases where subscriptions continue to make good value sense, their memberships thrive. Keep in mind value is not just about price; it’s about convenience, time savings and, yes, pleasure.
Here are four measures that could separate long-lived retail subscriptions from cancelled ones.
- The products make practical sense. People are making hard choices about spending, but they will continue to pay for the convenience of regular fulfillment on products they will purchase anyway. Subscriptions for literally hard-to-haul goods in particular – clothing detergent, dog food and cat litter – are more likely to maintain membership numbers. Nonessential, easy-to-grab items – we’re looking at you, pies, pickles, plants and candles – are more vulnerable to dropped delivery.
- The subscription is easy to join, and un-join. The guidelines of a subscription program – total cost, commitment requirements, delivery schedule – shouldn’t fill more than a page. And if a one-year commitment is required on a pricey subscription, more customers will second-guess the decision. The weekly boxed-meal seller Sun Basket breaks down how it works in three easy steps, with one step revealing a wide range of food preferences (paleo, diabetes-friendly, pescatarian and prep-free options). This flexibility extends to terms; members can skip a week or cancel any time.
- It piggybacks benefits: In addition to delivering timely, well-valued products, retailers are under more pressure to include other perks in their subscription services. Amazon Prime may have set the bar on this expectation by combining free video streaming with delivery. So some retailers are getting creative. Meal kit-and-grocery provider Hungryroot sends newly signed members a free gift of their choice in every delivery – vegetable, cookie or protein source. Subscribers of the service FabFitFun, in addition to a selection of designer wellness, fashion, beauty and home items, get access to flash sales. Other retail subscription services, such as Fabletics and Ipsy, incorporate reward platforms so members earn points toward future purchases, and Fabletics further provides active members free access to its online fitness platform, Fabletics Fit.
- It’s worth the wait (and weight). Subscription members should feel like they are getting a big deal every time their box arrives. Some retailers do this by including free samples, but merchants should factor in expense. Samples may cost just $1 or $2 apiece, but they could add weight (i.e., cost) to a package. This may be why so many beauty subscriptions, including Birchbox, send only sample-sized products (or a mix of sample- and regular-sized goods) of intriguing, lightweight elixirs. Merchants should ensure they have enough product in stock if a sample triggers high demand, and they should have the data-gathering resources in place to measure the response rates to various samples.
Even A Cactus Membership Can Be On Point
Retailers know that the things their customers buy can be hard to predict; what goes on in each household can change sharply, thanks to employment shifts, school assignments, childhood (and adult) phases and emotions. A keto-dieting woman in perimenopause may have an unshakable craving for Jeni’s ice cream. A teenage boy might refuse to use store-bought razors.
What matters is that when the average household budget is in pick-and-choose mode, the choices are made for a reason. It’s not musical chairs. A subscription, regardless of the goods, should act in good times just as it would in hard times.
