Commutes and curation

In a post last year on the subscription industry (More than Netflix & Stitchfix) we looked at how consumers in the midst of the pandemic had grown (even) more interested in streaming, food/meal, and personal care/beauty subscription services—driven largely by a need to simplify the online shopping experience for frequently purchased products. 

Now, as the US recovers from the pandemic and consumers are getting out and about more often, we went back to this topic to see where consumer adoption of subscription products stood.

Key takeaways:

• Subscription growth has cooled slightly—even digital subscriptions like Netflix and Disney+ are growing at a slightly slower rate than late last year, but still show steady gains.
  
• Nearly all categories—digital included—show a consistent 3-4% customer attrition rate, meaning cancellations aren’t driven by any particular product category becoming less relevant to the subscription format.
  
• An astonishing 1 in 4 consumers subscribe to a home or pet supply service, including 1 in 10 consumers signing up for a subscription recently.
  
• This growth in replenishment subscriptions opens the door for other categories (like personal care and meal kits), as consumers become more accustomed to having common purchases delivered on an automated, recurring schedule.
  

The impact of office work

• 53% of employed respondents say they’ve gone back to working in an office (that includes 13% who are ‘hybrid’ workers, in the office 1-3 days per week).
  
  • Interestingly, urban employees are the least likely to be working in an office full time (36% vs 42% suburban/rural), and are most likely to have hybrid schedules (17% vs 10% suburban/rural).
    
  • Those earning the most ($100k+ per year) are, interestingly, the most likely to have already gone back to working in an office (58% vs 51% suburban/rural).
    
• Another 13% say they are going back to the office in the next 12 months.
  
• 34% say they do not plan to work in an office in the future.
  
  • GenZ are the after-Baby Boomers, to say they are going to stay remote workers.
    
• So, what does this mean for subscription service adoption?
  
  • Subscription services are largely driven by two underlying consumer needs: a lack of time, or a lack of inspiration.
    
  • A return to the office, with the addition of a commute that had all but disappeared over the past year, creates a scarcity of time. Meanwhile, the need for new product purchases—like clothing that’s more work-appropriate than yoga pants! —would normally drive consumers to seek inspiration for product purchases.
    
  • This is what we’re seeing—those who have already returned to the office show higher net increases (i.e., the difference between new subscriptions and cancellations) than those staying remote. But the group planning to go back in the next 12 months sees the highest net increases of all, because they’re reacting to an upcoming change in lifestyle.
    
• Some other takeaways:
  
  • Digital subscriptions are still growing - evenly between those back in the office and those who are planning to go back into the office (19% and 20%, respectively, saying they’ve started a new subscription).
    
  • Remote workers are the least likely to already be subscribers to digital services (48% vs. 56% back in office)—surprising given how much more time they have at home.
    
  • Lifestyle/home subscriptions are seeing double the net growth among those planning to go back to the office (13%). We’re thinking this is either the need for outsourcing home decorating to a curated subscription service…or new candles & plants for the office?
    
  • Home/pet supplies are up 24% (net difference between those starting and cancelling subscriptions) among those going back to the office—that’s higher than the 10% net increase among those already back at the office, which is also high.
    
  • You would think Meal Kits and Apparel subscriptions would have gone up significantly among those going back to the office—but the net increase is only 6-8%.
    
  • There was no category, not even among remote workers where the net change in subscriptions decreased—a great sign for the subscription industry.
    

Expectations are high—no matter what type of subscription service you offer

Finally, we asked consumers to tell us about their order experience expectations when comparing replenishment and curated subscription box services. We’d gone in assuming curated boxes—which rely on the unboxing experience as a source of building anticipation, surprise, and delight—to index higher expectations with consumers. But not so! 

Consumers expect unboxing and returns to be equally convenient across both categories. In fact, the only big differences were in expectations around delivery tracking and shipping speed—both of which naturally called for lower expectations among replenishment service customers, who feel instead that the delivery experience should be invisible for items that are repeatedly purchased on a schedule.

BOXpoll™ by Pitney Bowes, a weekly consumer survey on current events, culture,and ecommerce logistics. Conducted by Pitney Bowes with Morning Consult //2000+ consumers surveyed June-July 2021.© Copyright Pitney Bowes Inc.