Exploring the World of Subscription Buying

The way in which people shop is fundamentally changing, and this is having a huge impact on the shape and future of retail. As shoppers have moved a lot of their spending from bricks and mortar to eCommerce retail, players like Amazon have used the principles behind The Subscription Economy to further disrupt the retail landscape.

With millions subscribed to Amazon Prime and Subscribe and Save, and still millions more shifting their discretionary income into subscription shopping, we have seen an explosion in the number and variety of products and services available through online subscription. Helpful to consumers, subscription shopping also provides whole new opportunities.  Automated subscriptions promise brands the holy grail of on-going, profitable relationships with their customers at a time when traditional retail channels are crumbling.

To better understand this fundamental shift in retail, the Stripe Partners team has been exploring this fast-evolving world directly with consumers, in their world. Over the past month, we have sent our team out into the field here in the UK using our ethnographic Studio Approach to speak directly with consumers to understand their world, and how and why their shopping behaviours are shifting. We have identified fresh insights that unlock the how, why, where and when of users’ new subscription shopping behaviours.

 

The Four Key Drivers of Subscription Buying

In meeting with real world consumers, we wanted to understand subscription shopping from a few different directions. What are the factors pulling people to sign up for subscriptions to physical products? What are the positive and negative sides of their experience with these services? And finally, what opportunities exist for brands in this space? With this path of inquiry, we identified four key drivers of subscription shopping: (click or scroll to explore)

 

Subscription Driver: Seeking Peace of Mind

For some, subscription buying is about automating replenishment to never be without life’s ‘essentials’. Whether it be toilet paper, a special whitening toothpaste, vet-approved low calorie dog food or electric toothbrush heads, some consumers are seeking peace of mind when they put physical products on an automated replenishment. Amazon Subscribe and Save is the key retailer catering to this style of buying, and has built their platform and infrastructure around helping people never run out of the few products they need to get through the month. Take Michelle, 47, living on the South coast in the UK. For Michelle, replacing her electric toothbrush heads regularly gives her real peace of mind.

For many, subscription buying is more emotional – it does not follow a rational plan. While Michelle subscribes to her toothbrush heads, she does not use Amazon Subscribe and Save for other similar items in her house like kitchen towels or laundry detergent pods. For most of the consumers we spoke to, the Subscribe and Save option is a ‘life hack’ that guarantees they will always have access to one or two key products that matter. Subscription buying creates the feeling of consistent access to the products seen as core to their routines.

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Subscription Driver: Looking for Instant Gratification

Increasingly, we are all used to getting what we want, when and where we want it delivered at a moment’s notice. Uber enables instant gratification with transport, Deliveroo enables it with dinner, and platform subscriptions like Amazon Prime, ASOS Premier, Netflix and even paywall sites like the Financial Times understand the value of providing access on-demand. For shoppers seeking instant gratification, subscription buying lets them sign up to platforms that provide product access on impulse. For Peter, Amazon Prime is his default space for browsing and buying when the shopping mood strikes.

For subscription shoppers like Peter, these instant gratification-driven platforms become their one-and-only-stop for shopping. This style of shopping isn’t just about access – instant gratification is about control. Consumers using Amazon Prime and ASOS Premier don’t need to manage product rhythms, doses or delivery times, and can order from their own ad-hoc wish list at a moment’s notice. Subscription shoppers we spoke to shared their familiarity with the Amazon app/ website, able to navigate its categories and deals as deftly as we used to manage an in-store shop at the supermarket. A new language is learned, muscle memory is built, and next-day service is guaranteed.

Regardless of which product you’re selling, subscription-driven instant gratification platforms are fundamentally re-writing the rules for retail. 

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Subscription Driver: Subscription Supports My Lifestyle

Subscription services like Birchbox, Stitchfix and Loot Crate have been enabling ‘self-gifting’ for years, but have mainly served as great marketing platform for others’ brands. As shopping patterns are shift, more consumers are adopting subscriptions that not only inspire, but that keep their lifestyle on track. Getting weekly meals from Blue Apron and Hello Fresh, or getting  supplements and snacks from Graze and VITL,  serves to enable small daily goals. Arriving in daily or monthly ‘doses’,  a growing number of subscriptions provide much-needed structure to daily life around longer term goals like health, fitness, or even ‘being a good adult’. For Debbie, 63, subscribing to Hello Fresh weekly allows her to provide good quality food for her family and to enjoy cooking, without spending her days digging through recipes or supermarket aisles.

In this way, subscription-based brands are acting as a premium ‘life aid’, replacing personal chefs, personal trainers, high end all-natural food shops and even the local expert at the record shop. This level of curation far exceeds what is typically available in a bricks and mortar store. It offers service levels that breed loyalty from shoppers. By positioning subscription as both a functional tool and a place for inspiration and discovery, services experiencing major growth are providing the best of the physical and digital retail world, all delivered right to your door.

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Subscription Driver: Reinforcing Community and Identity

For some, subscription is about instant access, while for others, it makes our daily goals possible. However, for a small but dedicated group, subscription is something different altogether – it is a way to foster community and reinforce a sense of identity. Similar to our dedication to local sports teams, this level of subscription carries a deeper meaning for consumers.

Whether getting a monthly micro-brew box from Beer52 or a pack of Tribe bars for a long ride with the local cycling club, some consumers are making financial commitments that feeds their sense of identity. With each delivery through the post, consumers feel that they are supporting the independent brands they care about while also building their own personal reputation and knowledge. Vincent, 27 in East London is a dedicated reader of The Economist. He views his online-offline subscription as core to his sense of identity and would never waverin his commitment.

With these types of subscriptions, consumers can access niche brands and build their connoisseurship in ways that were previously unavailable to them. Additionally, consumers we spoke to mentioned that brands like Beer52, Tribe, Cornerstone Razors allow them to feel like amateur experts, growing their knowledge and involvement more deeply each month. Unlike the traditional shopping experience, each purchase brings along a dynamic built-in community, making subscription feel less like a transaction and more like being part of community of like-minded people.

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