We surveyed more than 500 subscribers to boxes or services in the United States in August 2020, five months after the World Health Organization (WHO) declared COVID-19 a pandemic. Subscription businesses have proven themselves remarkably resilient in the face of economic crisis. ![]() Another highlighted the novelty: “It saves me time and also encourages me to try new things.” “I like that I know exactly what I’m getting, how much I’m paying, and it’s convenient since it’s all on autopay,” said one consumer. Indeed, the average US consumer now has four subscriptions. Not only can the subscription model drive greater average spend, launch a virtuous cycle of using data to better serve consumer needs, and inspire loyalty, it provides value to consumers who appreciate the convenience, novelty, and curated experiences. According to data gathered by subscriptions-logistics provider CaaStle, one apparel player reported that their rental subscribers spent on average 2.5 times more than their traditional brand (non-subscription) consumers. 1 “The subscription economy grows more than 300% in the last seven years,” Business Wire, March 21, 2019,. ![]() Collectively, they grew more than 300 percent from 2012 to 2018, about five times faster than revenues of S&P 500 companies. ![]() Subscription businesses-in which consumers periodically pay a predetermined amount for a service or set of goods-have emerged as one way to use data to reimagine retail businesses. This article was a collaborative effort by Michele Choi, Stephen Moss, Jesse Nading, Emily Reasor, and David Remley, all with McKinsey’s Marketing & Sales Practice.
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