Retailers Expand Subscription Options, But Consumers May Be at Their Limit

In the past several weeks, a handful of retailers have rolled out announcements about new or expanded subscription services, including Petco’s expansion of its PupBox service and jewelry retailer Claire’s launch of its first subscription service, called Cdrop.

Beth Moeri, executive vice president and chief merchandising officer of Claire’s, said in a statement that creating Cdrop is part of Claire’s attempt to meet customers where they live and shop while providing them with access to the latest trends.

“For more than 50 years, Claire’s has been synonymous with fun, innovation and discovery through our ability to surprise and delight our customers with our trendsetting assortment,” Moeri said. Claire’s declined an interview request from PYMNTS.

The impetus for these moves is clear: 81% of Americans now subscribe to at least one subscription service, according to PYMNTS research conducted in collaboration with sticky.io, a 13% increase since February 2020. Data show that 61 million U.S. consumers have at least one retail subscription, with the average subscriber holding about 3.7 subscriptions — meaning there could be as many as 225 million active retail subscriptions in place.

Read more: 61M US Consumers Have at Least One Retail Subscription 

But Claire’s, Petco and others may find that consumers have reached the limit of subscriptions they can take on, with many actually looking to cut back on what they’re paying for. About 45% of Gen X subscribers and 40% of bridge millennials want to cut back on costs and will therefore eliminate at least one subscription. Nearly 20% of all consumers with subscriptions say they plan to pull back their subscriptions, either to save money or to buy similar items at local retailers.

Even those not cutting back may not be looking to add to their subscription assortment. Forty percent of subscribers say they don’t want to deal with the hassle of receiving too many email notifications, and 38% don’t want to manage too many accounts.

The Gift That Keeps on Giving

Still, with a holiday shopping season bound to be constrained by supply chain issues, more people may be looking for alternative items to put under the tree when the shelves end up bare, which may account for the launch of new subscriptions in recent weeks.

And for brands, gift subscriptions can be an entry point to a longer relationship with a subscribed customer. One in five consumers who have a subscription say it’s because they received it from someone as a gift, including 35% of people who have subscriptions for clothing and accessories and 38% of grocery subscribers.

“When a subscription model for consumer products is designed correctly, it delivers immense value for the consumer,” John Donoghue, head of corporate and business development at CaaStle, told PYMNTS in a recent conversation. He also noted that millennials and Gen Zers are much more comfortable with subscriptions than previous generations.

Related news: Retailers Turn to Clothing Rental as Consumer Acquisition Tactic

But getting a subscriber and keeping them around are often two different things, which is why brands are increasingly trying to make subscriptions more flexible to meet consumers’ needs. Claire’s Cdrop, for example, has three different tiers of subscription boxes, and allows customers to receive a one-time box for only $2 more than the monthly subscription fee.

Many subscription providers have also added pause buttons, with 25% more of the bottom-performing brands offering the feature since the second quarter of this year. They are also offering subscription discounts, helping to keep consumers even as circumstances change.

Still, only 69% of subscription services allow people to tailor plans during sign-up, and just 43% allow subscribers to edit their plans after they’re subscribed, suggesting that more work needs to be done to make subscriptions more flexible, especially as consumers’ lives continue to change amid the pandemic.