According to 2022 research from C+R Research, more than half of Americans underestimate how much they spend on monthly subscriptions by over $100. 55% of gen Z have actually forgotten about subscriptions they are still paying for while 48% of millennials have done the same. With the cost of living crisis biting, companies are rethinking their subscription models in order to tempt new savvy customers.
January 2023 saw the launch of new e-marketplace Consumerhaus targeted squarely at a gen Z audience looking to buy groceries in a meaningful way. Products on the site are curated by gen Z founder Claire Spackman based not only on their quality but also on their brand and founder stories. On top of being a highly bespoke shopping service there is crucially no membership fee or shipping costs—something savvy gen Zers will appreciate. As Spackman told VML Intelligence, “Today's consumers demand a lot more when it comes to their shopping experiences and they're heavily deterred by things like paywalls or shipping fees, which is partially a result of industry leaders like Amazon setting these consumer expectations. We designed our user experience to be as transparent, inclusive, and enjoyable as possible, pairing it with our unique curation-as-a-service and modern aesthetic.”
More established subscription services are going a different route to attract new customers to their services by partnering up with other subscription sites and offering discounts or freebies to already loyal customers. For example, in July 2022, Amazon Prime members in the US received free memberships to food delivery service GrubHub for a year. Aiming to support the mental health of their content creator community, Pinterest announced a collaboration with Headspace in October 2022 to offer access for free to their influencers. In December 2022, meditation app Calm and Xbox aimed for a true brand tie-in whereby Calm premium members could now listen to relaxing soundscapes from games like Halo Infinite and Sea of Thieves while Xbox Gamepass Ultimate members could get three months free subscription to Calm. The partnership highlights the crossover available within the two companies’ loyal fanbases.
Subscription overload is a real problem for consumers today as every penny is being counted. By rethinking the subscription service, removing fees or incentivizing crossovers companies which rely on this model will be able to weather the storm while also providing real value to their customers.
