The State of Subscription Commerce 2020
Looking to establish a baseline for your physical subscription brand? We break down the success of the industry among 12 different verticals.
Subscriptions have been around for centuries. What started out as a business model for newspapers and other periodicals evolved to include nearly limitless product offerings. Today, more and more consumers are flocking to subscription services than ever before, with the industry generating billions of dollars in sales.
But with so many types of subscriptions available, how can brands gain a deeper understanding of their success, as well as their opportunities for optimization? Our 2020 Physical Subscription Commerce Report is here to help you establish a baseline for your business, breaking down the industry into two different types of physical subscriptions and twelve verticals.
We dive deep into the state of physical subscription commerce, breaking down key findings to help you gain a deeper understanding of your place in the industry. Curious about the most popular cadence for recurring deliveries? Over half of subscribers choose monthly subscriptions. Wondering which verticals have the highest AOV and churn? Food and Entertainment can be found in both categories—we break down all this and more in the report.
Curious to learn more about the state of the physical subscription industry?
Here's a glimpse into what you'll find:
In terms of plan length, 57% of customers chose subscriptions on a monthly cadence. The next-most popular option was a custom plan length, or one that fell outside a monthly, quarterly, semi-annual, or annual option.
Though products in the Beverage vertical often have a lower price point than products in other verticals, this category had the highest AOV of those we studied. Next-highest was Entertainment, followed by Food.
While Food and Entertainment had some of the highest AOVs studied, they also had the highest and second-highest churn rates, respectively. The vertical with the third-highest churn rate was Pets.
Frequently asked questions
Why should my brand consider offering physical subscriptions?
The subscription business model is a powerful tool for generating a reliable stream of recurring revenue. What’s more, due to the repeating nature of these purchases, brands have the opportunity to form long-term relationships with their customers through their subscription offerings. By getting to know your customers on a deeper level, and for a longer period of time, you can use data, analytics, and customer feedback to hone your offerings, optimize the subscriber experience, increase AOV and LTV, and reduce churn.
What verticals do we discuss in the report?
In the report, we look at physical subscription commerce through the lens of 12 verticals: Beverage, Food, Home, Health & Wellness, Fashion, Hobbies, Entertainment, Pets, Medical, Beauty, Magazines, and Coffee.
What types of subscriptions does the report cover?
This report covers physical subscriptions falling into two categories: subscribe-and-save offerings (also known as replenishment subscriptions), where the customer chooses a cadence to receive the same item, and box offerings (also known as curation subscriptions), where merchants curate an assortment of goods and deliver them at regular intervals. It does not cover digital or access subscriptions such as streaming services, SaaS, or gated membership programs.