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Understanding Consumer Usage and Attitudes Toward Subscription Services - US - September 2018

"Subscription services are evolving as more companies across a variety of product categories are in or entering the market. Consumers have interest in signing up for product subscriptions; however such programs must be tailored in a way that makes the consumer’s life easier and adds value. Product quality and quantity are top concerns, as is cancellation. Companies looking to enter and continue in the subscription service/automatic replenishment market need to stress the convenience and cost savings of such services in order to better appeal to more consumers. Marketing should focus on how these services should be thought of as a “need to have” rather than a “nice to have.”"
- Matt Lindner, Senior eCommerce Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

          • Participation remains low
            • What matters most to consumers when it comes to subscription services
              • Value: cost is a driver and a barrier
                • Convenience is a key part of the appeal
                  • Enjoyment drives participation
                    • Concerns around cancellation abound
                      • Recommendations:
                      • Subscription Services—Market Overview

                          • Product subscription adoption remains low, negative perceptions deter trial
                            • Figure 1: Subscription service participation, June 2018
                        • Factors Driving Interest in Subscription Services

                          • Prevalence of online shopping leads to subscription services trial
                            • Figure 2: Online shopping frequency, June 2018
                          • Novelty drives subscription service trial
                            • Figure 3: Attitudes toward receiving product subscriptions, by generation, June 2018
                          • Experience, replenishment drive future interest
                            • Replenishment needs drive trial
                              • Figure 4: Attitudes toward product subscription services – Replenishment, by generation, June 2018
                          • Subscription Services – Market Landscape: Key Players

                              • Food
                                • Blue Apron teams up with Costco
                                  • Grocery giants snap up Home Chef, Plated
                                    • Figure 5: Home Chef marketing email, September 2018
                                  • SunBasket
                                    • Graze
                                      • Imperfect Produce
                                        • Household Products
                                          • Amazon
                                            • Figure 6: Amazon marketing email, August 2018
                                          • Grove Collaborative
                                            • Beauty
                                              • Birchbox
                                                • Ipsy
                                                  • PLAY! by Sephora
                                                    • Walmart
                                                      • Figure 7: Walmart Beauty Box customer feedback email, July 2016
                                                    • Apparel subscription services
                                                      • Stitch Fix
                                                        • Bombfell
                                                          • Le Tote
                                                            • Amazon Prime Wardrobe
                                                              • Figure 10: Amazon Prime Wardrobe marketing email, September 2018
                                                            • KidBox
                                                              • Personal grooming products
                                                                • Dollar Shave Club
                                                                  • Gillette
                                                                    • Feminine hygiene products
                                                                      • Pet products
                                                                        • Barkbox
                                                                          • Petco Repeat Delivery
                                                                            • Novelty
                                                                              • Loot Crate
                                                                                • Amazon Prime Book Box
                                                                                  • SketchBox
                                                                                  • Subscription Service Usage

                                                                                      • Younger consumers drive product subscription adoption
                                                                                        • Figure 11: Product subscription and replenishment service adoption, by generation, June 2018
                                                                                      • Parents are twice as likely as non-parents to sign up for subscriptions
                                                                                          • Figure 12: Product subscription service usage, by parental status, by age of children, June 2018
                                                                                        • Automatic replenishment services underutilized, peaks among younger consumers
                                                                                            • Figure 13: Automatic product replenishment service usage, by age, by Hispanic origin, June 2018
                                                                                          • Personal grooming, food, and beauty products lead the subscription market
                                                                                              • Figure 14: Subscription box participation, by product category, June 2018
                                                                                            • Replenishment-based products present an opportunity for retailers
                                                                                              • Figure 15: Subscription service interest, by product category, June 2018
                                                                                          • Usage and Interest by Product Category

                                                                                            • Participation and Interest by Category
                                                                                              • Food and Beverages
                                                                                                  • Figure 16: Future interest in food and beverage subscriptions, by select demographics, June 2018
                                                                                                • Household products
                                                                                                    • Figure 17: Future interest in household products subscriptions, by select demographics, June 2018
                                                                                                  • Beauty
                                                                                                    • Figure 18: Future interest in beauty products subscriptions, by various demographics, June 2018
                                                                                                  • Apparel
                                                                                                      • Figure 19: Future interest in women’s apparel subscriptions, by select demographics, June 2018
                                                                                                      • Figure 20: Future interest in men’s apparel subscriptions, by select demographics, June 2018
                                                                                                    • Personal grooming
                                                                                                      • Figure 21: Future interest in personal grooming products subscriptions, by select demographics, June 2018
                                                                                                      • Figure 22: Gillette Father’s Day YouTube video “This Father’s Day, Go Ask Dad Part 1,” June 2016
                                                                                                      • Figure 23: Gillette Father’s Day YouTube video “This Father’s Day, Go Ask Dad Part 2,” May 2017
                                                                                                    • Pet products
                                                                                                      • Figure 24: Future interest in pet products subscriptions, by select demographics, June 2018
                                                                                                    • Toys and games
                                                                                                      • Figure 25: Future interest in toys and games subscriptions, by select demographics, June 2018
                                                                                                    • Baby products and children’s apparel
                                                                                                        • Figure 26: Future interest in children’s apparel and baby products subscriptions, by select demographics, June 2018
                                                                                                    • Why Consumers Sign Up for Subscription Services

                                                                                                        • Value, convenience, enjoyment drive product subscription adoption
                                                                                                            • Figure 27: Reasons for signing up for a subscription service, June 2018
                                                                                                          • Moms motivated by value
                                                                                                              • Figure 28: Cost-oriented motivators to sign up for a product subscription service, by parental status by gender, June 2018
                                                                                                            • Older consumers seek convenience
                                                                                                                • Figure 29: Convenience motivators to sign up for a product subscription service, by age, June 2018
                                                                                                              • Younger women use product subscriptions for enjoyment
                                                                                                                  • Figure 30: Enjoyment motivators to sign up for a product subscription, by age, by gender, June 2018
                                                                                                              • Why Consumers End Subscriptions

                                                                                                                  • Reengagement may be possible even after cancellation
                                                                                                                      • Figure 31: Subscription service post-cancellation behavior, by gender, June 2018
                                                                                                                    • Reasons for ending product subscriptions
                                                                                                                      • Issue: Value
                                                                                                                          • Figure 32: Cost reasons for ending participation in a subscription service, June 2018
                                                                                                                        • Issue: Quantity
                                                                                                                            • Figure 33: Quantity reasons for ending participation in a subscription service, June 2018
                                                                                                                          • Issue: Quality
                                                                                                                              • Figure 34: Quality reasons for ending participation in a subscription service, June 2018
                                                                                                                          • Barriers to Subscription Services Trial

                                                                                                                              • Cost, control, and usage concerns deter consumers
                                                                                                                                  • Figure 35: Reasons for not having signed up for a subscription service, June 2018
                                                                                                                                • Cost
                                                                                                                                  • Younger women think product subscriptions are too expensive
                                                                                                                                      • Figure 36: Reasons for not participating in a product subscription – Cost – by gender and age, June 2018
                                                                                                                                    • Changing perceptions from luxury to necessity
                                                                                                                                        • Figure 37: Reasons for not participating in a product subscription – Luxury – by age and gender, June 2018
                                                                                                                                      • Control
                                                                                                                                        • Old habits can be hard to break
                                                                                                                                            • Figure 38: Reasons for not participating in a product subscription – preference for store shopping, by age, by parental status, June 2018
                                                                                                                                          • Freshness concerns hinder food subscription service adoption
                                                                                                                                            • Figure 39: Attitudes toward food freshness in subscription services, by online shopping frequency, June 2018
                                                                                                                                          • Usage
                                                                                                                                            • Usage and cancellation concerns
                                                                                                                                            • Motivators of Future Subscription Service Use

                                                                                                                                                • Value, convenience, new product trial will drive future subscription trial
                                                                                                                                                  • Figure 40: TURF Analysis – Drivers of future subscription service behavior, June 2018
                                                                                                                                                • Communicate value, convenience to drive new subscription business
                                                                                                                                                    • Figure 41: Reasons for signing up for a product subscription service in the future, June 2018
                                                                                                                                                  • Younger women are drawn to a clear cancellation policy
                                                                                                                                                      • Figure 42: Reasons for signing up for a product subscription in the future – easy to cancel, by gender and age, June 2018
                                                                                                                                                    • Stress convenience when targeting rural consumers
                                                                                                                                                      • Figure 43: Reasons for signing up for a product subscription in the future – time saving measures, by geographic location, June 2018
                                                                                                                                                    • New product trial makes appeals to parents
                                                                                                                                                      • Figure 44: Reasons for signing up for a product subscription in the future – new product trial, by parental status, by gender, June 2018
                                                                                                                                                      • Figure 45: Attitudes toward product subscriptions, by parental status, by gender, June 2018
                                                                                                                                                  • Appendix – Data Sources and Abbreviations

                                                                                                                                                    • Data sources
                                                                                                                                                      • Consumer survey data
                                                                                                                                                        • Consumer qualitative research
                                                                                                                                                          • Direct marketing creative
                                                                                                                                                            • Abbreviations and terms

                                                                                                                                                            Understanding Consumer Usage and Attitudes Toward Subscription Services - US - September 2018

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