The Subscription Revolution

In the US, subscription-based business models are being widely used by 61 million people, despite only recently gaining popularity. Some of the most recognizable services, such as Amazon Prime, Costco, and Nike are offering subscription services. In total, there are an astounding 225 million services available, ranging from grocery delivery to fresh sets of razors to dog walking services. Subscriptions are so deeply ingrained in people’s daily lives that the average consumer has 3.7 of them. 

Some subscriptions are designed to serve the everyday civilian (direct-to-consumer services) and others are created to help companies (business-to-business services). There are 27,000 DTC services available that are explicitly made to eliminate the need of a pricier, less convenient middle man. There are three main models in use: replenishment services, curated content, and membership/access.

55% of the market is made up of curated subscriptions, which cover a wide range of products, including media and tangible products. Notable examples include Birchbox and Fabfitfun. 32% of the industry is devoted to replenishment services, such as brands like Dollar Shave Club and Lexmark. These subscriptions usually cover necessities like groceries and toiletries. Membership/access subscriptions, which make up 13% of all subscriptions, offer special access and savings via programs like Sam’s Club and Amazon Prime.

Data shows subscriptions are here to stay