Data from Recurly analyzes current trends on subscription services
SAN FRANCISCO–(BUSINESS WIRE)–According to a new U.S. survey conducted by Recurly, the leading subscription management and billing platform, consumers feel more loyal (51%) and tend to spend more money (42%) with brands and businesses they subscribe to. As pandemic restrictions ease, in-person dining (46%), domestic travel (45%), and in-person entertainment and events (43%) are the top categories where consumers want to spend their time and money.
With the overall subscription industry set to double in the next three years according to UBS, consumers will be taking their love of subscriptions to their out-of-home activities as COVID restrictions ease in the U.S. Businesses challenged by pandemic restrictions and transactional business models are diving head first into subscriptions to meet consumer demand.
As traditional retailers and in-person businesses look to scale in 2022, capitalizing on the loyalty of subscription services proves to be a driver of growth. The opportunity to transfer the convenience of subscriptions to these out-of-home experience categories has been keenly anticipated, as the restaurant, foodservice1 and airline sectors 2 collectively suffered an estimated $275 billion loss in the pandemic, while the live events industry suffered a $30 billion loss globally3.
“Consumers love subscriptions. As people return to in-person experiences, they are carrying their love of subscriptions with them. It’s exciting to see accelerated growth in these categories,” said Theresa McEndree, Chief Marketing Officer at Recurly. “For in-person businesses, subscriptions drive recurring revenue, loyalty, and growth as consumers establish their new spending habits and behaviors. We are beginning to see some exciting new subscription categories and concepts emerge, from trampoline parks to car washes to restaurants.”
With 86% of consumers spending up to $200 per month on subscriptions, businesses are doubling down on consumer eagerness for in-person activities. Additionally, businesses should consider the following key findings.
Exclusivity is king. Forty percent of U.S. consumers say that having exclusive access to content or services is a main reason for signing up for a subscription. It comes as no surprise that the categories with the biggest subscriber base and growth in the last two years are the content juggernauts of streaming video, retail, and streaming audio as people hunkered down with at-home entertainment and services. According to the research, these are the top three categories that U.S. consumers have today and expect to use the most in 2022. Yet, they are also the top three categories that surveyed consumers have canceled in the last year.
“Providing exclusivity and creating consumer-led pricing models to these experience services is a major factor in successful retention and growth,” said McEndree. “Recurly leans into understanding why and how subscriptions are purchased so we can partner with our customers for scale.”
For millennial and Gen-Z consumers, the access to exclusive and compelling content or services is a major driver of subscription popularity, as on average 44% of those consumers prioritize that as their main reason for subscribing. This includes exclusivity in product, content or service, as well as unique bundling, perks, or discounts. This also leads to stronger preferences about brands as these consumers are more keenly focused on the types of offerings available from a range of companies, and they spend the time to choose the services that best deliver on their needs and wants.
Anticipate Consumer Behaviors and Preferences. Although fears are looming on the potential impact of inflation, by anticipating consumer subscription behaviors and preferences, businesses can stay ahead of the curve. For instance, 49% of consumers view subscription services as a way to treat themselves, with the majority (67%) of U.S. consumers preferring to pay for subscription services on a monthly basis.
Older generations prefer convenience, while younger generations have stronger brand preferences with their subscription services. Subscription models have helped usher in an age of convenience and “set it and forget it” options for consumers. For older consumers (45+), the ability to have products delivered routinely and the convenience of a subscription’s ease of setup and recurring payment processes are a major factor in their popularity. Also, 51% of consumers say that promotions like free trials or product samples are the top driver of subscription sign-up, and nearly 50% desire the opportunity to earn loyalty points, perks or discounts as part of the program.
“For retailers and service providers, tapping into key marketing elements of loyalty, promotions, and trial are a major opportunity to grab and grow market share,” said McEndree.
Taking the subscriber lifecycle from acquisition to retention to growth, Recurly is committed to meeting the customized needs in all subscriber lifecycle phases, powering an essential competitive advantage for scale through their industry-leading subscription and billing management platform. For more “Pandemic vs. Endemic Impacts and Trends on Subscription Services” survey data, go to Recurly.com.
Thousands of innovative companies across digital media, streaming, publishing, SaaS, education, consumer goods, and professional services industries rely on Recurly to unlock transformational growth using subscriptions. Recurly’s all-in-one, integrated platform removes the complexities of automating subscriptions at scale by enabling teams to manage and optimize their subscriber lifecycles with ease. Category-defining companies including Sling, Twitch, BarkBox, FabFitFun, ViacomCBS, Lucid, and Sprout Social have chosen Recurly to manage billions of dollars in recurring revenues, future-proof their recurring billing and payment operations, and recover millions in lost revenue due to churn. Founded in 2010, Recurly is based in San Francisco, with offices in Boulder and New Orleans. For more information, visit Recurly.com.
About the “Pandemic vs. Endemic Impacts and Trends on Subscription Services” Survey
The “Pandemic vs. Endemic Impacts and Trends on Subscription Services” survey is based on findings of an internet-based survey conducted by Recurly via Survey Monkey in March 2022. The sample size included 2,612 respondents 18+ that currently subscribe to one or more subscription services.
1 How many restaurants, bars closed in 2020? Over 110,000 eating, drinking establishments closed, 2.5 millions jobs lost pre-COVID | Fortune