Data Brief: Consumers Using Retail Subscriptions Increased 99 Percent Since Last Year

Talk about timing. Just as the subscription economy and direct-to-consumer (D2C) commerce were on an innovation tear, the pandemic hit, and subscription services became the go-to resource for all manner of goods and services. In fact, PYMNTS surveyed over 2,000 U.S. consumers to find that 99 percent of consumers became subscribers of one kind or another.

This PYMNTS Data Brief is excerpted from the recent 2021 Subscription Commerce Conversion Index, a Sticky.io collaboration. The scope of change is immense, as the Index notes that “the number of consumers with retail subscriptions has increased by 99 percent since 2020, and 20 percent of consumers have access to at least one subscription. The only other type of subscription to come close in growth are those for digital media products, as the number of consumers with such subscriptions has increased by 92 percent in the same time frame.”

Amid all of this market might, the looming question over the entire subscription economy is who will keep their subscriptions, and who was just passing through for the free experience? The 2021 Subscription Commerce Conversion Index finds that “only 52 percent of consumers who have used free trials since the pandemic started [are] choosing to keep their subscriptions. Retention rates tend to be higher among consumer retail subscribers, but even these consumers do not hesitate to cancel subscriptions with which they feel dissatisfied.”

Also notable among findings in the latest Index are reasons why consumers are increasingly going direct to brands. “Consumers are less likely to use subscriptions to automatically make nice-to-have purchases, such as for beauty products and alcohol. Seventy-seven percent of consumers use subscriptions to automatically make beauty purchases, for example — still a majority, but less than the share that does so for more essential products,” per the Index.

With subscribers getting 38 promotional offers per year on averaging — and accepting about half per the Index — consumer retail subscription service providers “collectively generate 563 million sales per year by using promotional offers alone.” As the Index states, “Promotional emails and messages can be a powerful tool that providers can use to boost sales, as half of all promotions that are sent ultimately convert to sales,” with 48 percent of all subscribers who receive promotions from their subscription service providers (31 million U.S. consumers) having purchased “products offered through those promotions in the past year.”