Subscription-based offerings are on the rise during the pandemic.
A new study from CouponFollow shows that during the COVID-19 crisis, many US consumers have leaned into subscription-based product—some for the first time.
Of over 1,000 shoppers surveyed, one in five had purchased a subscription box to have products on-hand during the pandemic. The survey also showed the most popular subscriptions were HelloFresh (21%), BarkBox (20%), Blue Apron (19%), and Dollar Shave Club (18%).
Retailers are taking note of this shifting behavior, and data projects that by 2023, as many as 75% of direct-to-consumer brands will have a subscription-based offering.
Subscription growth is reportedly on the rise across industries and verticals, too.
“At ReCharge, we’ve seen gross processing for subscription merchants up double digits during COVID-19,” said Luke Retterath, VP of Marketing at subscription billing platform ReCharge Payments.
“While some verticals have certainly benefited more than others, we’ve seen positive performance across nearly all sectors. Additionally, we saw a large uptick in new subscription business created as businesses moved online at an accelerated pace in April and May.”
This was certainly true for CBD company Equilibria: Demand for their subscription-based offerings shot up 200% beginning in March. Grounds & Hounds Coffee Co., which offers coffee subscriptions, also saw an uptick during the pandemic: Their monthly subscribers grew by 35% when shelter-in-place mandates went into place.
So what drove this increased demand?
Grounds & Hounds founder Jordan Karcher shared that while they didn’t introduce any special pricing or promotions around their subscriptions, they did put a greater emphasis on the offering with marketing messages that focused on the subscription’s savings, convenience, and flexibility—and it appears to be resonating.
BarkBox is another retailer with subscription-based offerings that are thriving during COVID-19.
In their case, they’ve found that by leveraging organic social posts that tap into an element of viral pop-culture references and increasing engagement, these pieces of content are performing just as well as those that are paid (and are driving sales to the point of selling out of certain products.)
For example: When they noticed they had an excess of toys in a specific cat design that resembled Carole Baskin of Netflix NFLX ’s popular show Tiger King, their social team created an organic post on social media about “Cool Cat Carole” that garnered over 238,000 impressions across social channels, attracted new subscribers, and ultimately resulted in the toy selling out.
Still, in other cases, subscription offerings are new, first-time offerings for brands who are leveraging subscription boxes as workarounds to business models that are no longer viable—like in-person marketplaces.
This was the case for Bide Market, which pivoted from an event-focused marketplace model to launching Bide Box, a seasonal online subscription featuring a collection of eco-friendly and fair trade products from would-be market vendors that are shipped straight to shoppers’ homes.
“The pandemic deeply affected our business model, and I had to think fast on how we could continue our mission in supporting our incredible brand partners,” said Parisa Morris, founder of Bide. “So far, the response to this new subscription offering has been great.”
“Subscriptions continue to deliver above market growth,” he said.
“If these moments of time tend to accelerate underlying trends, we believe the current crisis will only accelerate the shift of the modern global economy towards digital services and subscription models.”