Online retail subscriptions are the latest trend on the e-commerce scene. It offers convenience and personalized shopping experiences, and it’s flourishing because time is a precious commodity for many.
A PYMNTS Intelligence study – ‘The Replenish Economy: A Household Supply Deep Dive’ – shows a notable decline in in-store shopping, all thanks to millennials’ aversion to brick-and-mortar stores.
The rise of retail subscriptions
According to the report, 42% of retail subscribers frequent physical stores less often, due to their current online subscriptions.
The most common reason for preferring subscriptions over in-store experiences was “more control of timing of shopping,” as confirmed by 15% of respondents.
An additional 12% said subscriptions provide a faster shopping experience, while 10% say it’s easier to control the amount they spend. Other reasons provided include:
- More pleasant shopping experience (8%)
- Faster delivery (7.5%)
- Less concern about running out (7%)
- Easier to explore available items (6%)
- Cheaper products (5%)
- Wider selection of products (5%)
- More control of products selected (5%)
- Better quality products (4.5%)
- No additional fees or costs (4%)
Amazon’s services dominate the field, with 42% of respondents saying they have active Web Services (AWS) subscriptions. In addition, 26% say they have HelloFresh subscriptions and 20% with Dollar Shave Club subscriptions.
Millennials leading the change
Approximately four out of ten millennials rely on online subscription for all of their shopping needs. “Younger consumers are more likely than their older peers to rely mainly on retail subscriptions for their everyday shopping needs,” the report states.
The millennial wave is followed by Bridge Millennials with 38%. Bridge millennials refer to the portion of this demographic who are too young to be Gen Xers but too old to be millennials. They are also known as ‘Early Millennials,’ ‘Elder millennials,’ or ‘Xennials.’
Meanwhile, Gen Zers make up 31%, followed by Generation X with 24%, and Baby Boomers with 17%.
Service quality and flexibility
The study also highlights the importance of customer satisfaction and service quality in getting new subscribers and retaining existing ones:
“The consumers who rely most heavily on retail subscriptions also tend to have the least patience for bad experiences. Scheduled delivery and auto-fill subscribers are 5.9 percentage points more likely to cancel their subscriptions if a merchant cancels an order due to an item incorrectly appearing as in stock.”
Subscribers are prone to cancel an order on a whim if they spot negative reviews. They are also likely to close the tab if the products are incorrectly listed as in stock when no security certification is displayed, and when there is no option to leave feedback about products and services.
The bigger picture
The report highlights why it is important for online retailers to create flexible and engaging subscription experiences. With online services on the rise, the need for service quality and flexibility is more important than ever.
As online merchants adapt to these changing dynamics, they stand to benefit from the convenience and tailored experiences that retail subscriptions uniquely offer.
Understanding and catering to these evolving consumer needs is more than just a strategy – it’s a necessity for thriving in the competitive world of online retail.
About the author
Cheryl has contributed to various international publications, with a fervor for data and technology. She explores the intersection of emerging tech trends with logistics, focusing on how digital innovations are reshaping industries on a global scale. When she's not dissecting the latest developments in AI-driven innovation and digital solutions, Cheryl can be found gaming, kickboxing, or navigating the novel niches of consumer gadgetry.
