The endless variety of subscriptions: what is on your monthly statement?
As previously mentioned, paid subscriptions come both in the form of physical product deliveries from retailers and as digital products and services. Among retail goods, groceries make up the leading subscription category among consumers worldwide. In 2022, 41 percent of global subscribers signed up to regularly receive these food items. One extremely popular segment of food-related subscriptions comes in the form of meal kits, which was forecast to reach a revenue of over 17 billion U.S. dollars in 2023. Some of the biggest players in the meal kit industry include HelloFresh and Gousto.Besides meal kits, nearly four in ten global subscribers regularly received personal care products, and another 34 percent subscribed to retail household products. In addition to retail goods, digital products undeniably play a large role in the world of subscriptions. How consumers watch the newest shows or listen to their favorite artist more often than not is due to several of these services. Netflix, Hulu, Disney+, Spotify Premium, and Apple Music are some of the most popular services among consumers worldwide.
How subscription businesses see things
For subscription businesses, some of the most important figures to pay close attention to are retention and churn rates, with the former referring to how long a subscriber is retained, and the latter being the rate at which the company loses subscribers due to cancellations or other reasons. In other words, high retention rates are positive, while high churn rates are negative. Home goods was the leading category when it came to retention rates in 2022, with over 50 percent of home good subscribers retaining their subscriptions that year. In contrast, the health and wellness category had the highest churn rate that same year, with nearly ten percent of companies offering these subscriptions losing their customers due to cancellations or elapses.To keep churn rates low, subscription businesses must adhere to customer preferences, which often include free shipping and the ability to pause or skip installments in their subscriptions. Other flexibility features valued by subscribers include: being able to cancel their subscription at any time at no additional costs, the ability to change the frequency of subscriptions at any time, and an option to personalize products to be included or removed from subscription boxes.
