Food Subscription Services Lag Physical Grocery Stores in Offering Deals and Discounts

As consumers continue to seek value in the face of rising prices, subscription services may be missing out if they are not offering special deals and discounts.

By the Numbers

Research from the September edition of PYMNTS’ Subscription Commerce Conversion Index study, “The Subscription Commerce Conversion Index: The Challenge of Cheaters,” created in collaboration with sticky.io, which drew from a survey of more than 200 U.S. retail subscription merchants, found that 93% of the top 30 offered discounts, compared to just 70% of middle-performing merchants and 42% of bottom performers.

However, only 50% of grocery subscriptions offer discounts, well below the cross-industry average.

Why It Matters

Online grocery customers are actively seeking discounts. Research from the May edition of the index, “The Subscription Commerce Conversion Index: Inflation Prompts 10x Increase in Consumers Reevaluating Subscription Value,” which drew from a survey of more than 1,900 U.S. adults, found that 56% of consumers would be interested in a grocery subscription if product prices were lower.

Merchants ranging from the world’s largest grocery retailer, Walmart, to the United States’ leading pure-play grocer to Kroger, among others, offer membership programs, promising free delivery for a set monthly rate. These are indeed proving to be an effective way to drive spending.

“Digital sales … returned to positive growth driven by our one-of-a-kind boost membership program and expansion of our Kroger delivery network,” Kroger Chairman and CEO Rodney McMullen told analysts on an earnings call in September. “It’s clear our go-to-market strategy is connecting with customers, and we continue to build long-term customer loyalty.”