Description

“Subscription service participation accelerated throughout the pandemic as consumers turned to subscriptions for convenient bulk-buying and enjoyment at home. In 2022, the market is saturated with options while consumers are scaling back spending due to inflation. To keep up momentum and stave off cancellations, brands must strengthen the overall value proposition and grant consumers more flexibility and control over the experience.”

–    Brittany Steiger, Senior Analyst – Retail & eCommerce

This Report discusses the following key topics:

  • Consumer usage and participation in various types of subscription services
  • The impact of inflation on consumer behavior and subscription services
  • Motivations and barriers to subscription service participation
  • Behaviors and attitudes toward subscription services

Table of Contents

  1. Overview

    • What you need to know
    • This Report looks at the following areas
    • Definition
    • Market context
  2. Executive Summary

    • Top takeaways
    • Market overview
      • Figure 1: Current or past participation in a subscription service, 2022
      • Figure 2: Current or past participation in a subscription service over time, 2018-22
      • Figure 3: Subscription services outlook, 2022-27
    • Opportunities and challenges
    • Multicultural consumers are an important and growing user base
    • Inflationary pressures prompt a renewed focus on savings and rewards benefits
    • Consumers want more flexibility and control
    • Cater to consumers on specificity and community-building
    • Key consumer insights
  3. Market Landscape

    • Pandemic drove participation in subscription services
      • Figure 4: Current or past participation in a subscription service, 2022
      • Figure 5: Current or past participation in a subscription service over time, 2018-22
    • Gen Z and Millennials dominate subscription services
      • Figure 6: Current or past participation in a subscription service, by generation, 2022
    • Opportunity to drive growth via multicultural consumers
      • Figure 7: Current or past participation in a subscription service, by race and Hispanic origin, 2022
    • Plenty of room to grow market share
      • Figure 8: Current participation in a subscription service – Repertoire analysis, by generation, 2022
    • Performance by category
    • Consumables continue to be the most popular segment
      • Figure 9: Subscription service participation by category, 2022
    • Apparel subscriptions face headwinds
      • Figure 10: Market coverage of challenges at Trunk Club and Stitch Fix
  4. Market Factors

    • Cancellations a threat amid inflationary pressures
      • Figure 11: Consumer Price Index change from previous year, 2020-22
      • Figure 12: Disposable personal income change from previous period, 2007-22
    • FTC report on “dark patterns” prompts deep-dive on cancellation tactics
      • Figure 13: FTC focuses on “dark patterns”; HelloFresh class action
    • Gen Z and Millennials build purchasing power and champion diversity
      • Figure 14: Population by generation and generations by race and Hispanic origin, 2021
      • Figure 15: Median household income, by age of householder, 2020
    • Rise in ecommerce both an opportunity and a threat to subscriptions
    • Climate change leads consumers to more sustainable shopping habits
      • Figure 16: Reasons for cancellation – Packaging/waste, by generation, 2022
  5. Competitive Strategies and Market Opportunities

    • Competitive strategies
    • Acquisitions and mergers make room in a saturated market
      • Figure 17: Misfits Market acquires Imperfect Foods
    • Starpower adds credibility and buzz
      • Figure 18: Fabletics launches Lizzo-backed Yitty
    • NFTs create community and exclusivity
      • Figure 19: Bored Breakfast Club pairs NFTs with a coffee subscription
    • Market opportunities
    • Cater to multicultural consumers
    • Strengthen the value proposition with loyalty rewards and deeper discounts
    • Give consumers more control and flexibility over their subscription
    • There’s strength in specificity and community
      • Figure 20: HelloFresh launches original Twitch series “Unleash the Feast”
  6. The Subscription Services Consumer – Fast Facts

  7. Current Participation and Experience

    • Current participation holds strong, but cancellations are still a challenge
      • Figure 21: Current participation and experience, 2022
    • Males are more likely to participate; females have higher expectations
      • Figure 22: Select current participation and experience, by gender and age, 2022
      • Figure 23: Menlo Club and Curl Box leverage social media to reach key consumer groups
  8. Usage and Interest by Product Category

    • Consumers are interested in a variety of subscriptions
      • Figure 24: Participation and interest by category, 2022
    • Who’s participating in subscription services
      • Figure 25: Any participation by category, by key demographics, 2022
    • Gen Z and Millennials drive participation and interest
      • Figure 26: Bespoke Post; Boxy Charm appeal to young consumers with expanded categories
    • Multicultural consumers embrace subscriptions that celebrate their identity
      • Figure 27: Instagram post from TukTuk Box highlights nostalgia and heritage
    • Parents turn to subscriptions to manage purchases
      • Figure 28: KiwiCo “Colorful Chemistry” subscription box
    • Who’s participating in subscription services
    • Consumable and essential categories have broader appeal
      • Figure 29: Future interest in consumable and essential categories, by generation, 2022
    • Opportunity: overcome barriers to expand participation in food and beverage categories
      • Figure 30: Blue Apron user review highlights challenges for older consumers
      • Figure 31: Attitudes toward subscription service – Food freshness, by generation, 2022
      • Figure 32: LA Times sheds light on daily harvest recall and food safety of meal kits
    • Opportunity: deliver convenience and joy to “pet parents”
      • Figure 33: BarkBox + Puppy Songs “Bark Box Day”
    • Opportunity: subscriptions for household essentials provide maximum value
      • Figure 34: Public Goods promotes effortless stock up on home essentials
    • Opportunity: capitalize on health and wellness trends
      • Figure 35: Hims and Hers, personalized in-app health support
    • Looking ahead: consumers eager to try different types of subscriptions
      • Figure 36: Desired features and improvements – Customization, by generation, 2022
      • Figure 37: Hungryroot offers personalized groceries; Tinggly curates experiences
  9. Motivations for Signing Up

    • Consumers are motivated by multiple facets of value
      • Figure 38: Motivations for signing up, 2022
    • Inflationary pressures lead to a value-focused mindset
      • Figure 39: Motivations for signing up – Budget, by financial situation, 2022
    • Convenience is a critical value-add
      • Figure 40: Motivations for signing up – Convenience, by generation, 2022
    • Quality and premium concepts are a key differentiator for subscriptions
      • Figure 41: Motivations for signing up – Quality/premium, by generation and race/Hispanic origin, 2022
    • Personalization and tiered programs deliver savings and convenience
      • Figure 42: TURF Analysis – Drivers, 2022
    • Parents see the value of convenience and quality
      • Figure 43: Motivations for signing up, by parental status, 2022
  10. Features Subscribers Value

    • Subscribers want more flexibility and control
      • Figure 44: Important features, by generation 2022
    • Customization adds value to curated subscription models
      • Figure 45: Important features, by type of service, 2022
  11. Why Subscribers Cancel

    • Cancellations occur when the value proposition is off
      • Figure 46: Reasons for cancellation, by type of service, 2022
    • Consumers are scaling back spending
    • Getting the product mix right can be tricky
    • Too much packaging/waste lead to concerns about sustainability
      • Figure 47: Blueland offers sustainable packaging solutions
    • Subscription services are not “one size fits all”
      • Figure 48: Reasons for cancellation, by gender and age, 2022
  12. Barriers to Signing Up

    • Trial opportunities can combat misconceptions
      • : Figure 49: Reasons for not using a subscription service, 2022
    • Subscriptions are perceived as expensive
      • Figure 50: Thrive Market advertises budget-friendly groceries
    • Some consumers prefer a more traditional path to purchase
      • Figure 51: Select reasons for not using a subscription service – Shopping preferences, by generation
      • Figure 52: Interest in in-store subscription options, by generation, 2022
      • Figure 53: Care/of + Target partnership
  13. Desired Features and Improvements

    • Opportunity lies in personalization and exclusivity
      • Figure 54: Desired features and improvements, 2022
      • Figure 55: FabFitFun offers customizable subscription boxes
    • Shared subscriptions unlock a new budget-friendly alternative
      • Figure 56: Desired features and improvements – Shared subscriptions, by household income and financial situation, 2022
    • Consumers would like options to donate unused products
      • Figure 57: Desired features and improvements – Customization, by key demographics, 2022
      • Figure 58: Walmart + Loop offers reusable packaging to Walmart+ members
  14. Attitudes toward Subscription Services

    • Subscriptions are fun to give and receive
      • Figure 59: Attitudes toward subscription service – Participation and interest, by generation, 2022
      • Figure 60: Starbucks unveils NFT-backed loyalty program, “Starbucks Odyssey”
    • Consumers need to see the savings
      • Figure 61: Amazon highlights its “subscribe and save” service
      • Figure 62: Attitudes toward subscription service – Value, by race and Hispanic origin, 2022
    • The post-purchase experience matters
      • Figure 63: Attitudes toward subscription service – Returns and cancellations, by generation, 2022
    • Young consumers enjoy product discovery
      • Figure 64: Attitudes toward subscription services – Discovery, by generation, 2022
      • Figure 65: Attitudes toward subscription services – Discovery, by race and Hispanic origin, 2022
  15. Appendix – Data Sources and Abbreviations

    • Data sources
    • Consumer survey data
    • Abbreviations and terms
    • Abbreviations
    • Terms
  16. Appendix – The Consumer

      • Figure 66: Any interest in subscription services by category, by key demographics, 2022

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Data

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