According to a new study, subscription customers are increasing their purchases.
Several important subscription retail metrics showed year-over-year improvement during 2022.
An exclusive Chain Store Age preview of the Recharge 2023 State of Subscription Commerce report (which will be released to the public Monday, Jan. 30. 2023) reveals that overall, the subscription retail industry showed improvements in five key performance indicators. These were average order value (AOV), lifetime value (LTV), monthly recurring revenue (MRR), customer retention, and customer churn.
On average, the subscription retailers analyzed by Recharge saw a 12% year-over-year (YoY) growth in LTV; 11% YoY growth in AOV; and 7% YoY growth in MRR. Retailers with subscription offerings in the study had an average customer retention rate of 45% retention after six months and 33% after 12 months (these figures are compared to 20% average customer retention rate after 200 days for e-commerce retailers in general).
In addition, the study found that flexible subscription offerings increased in 2022, with 35% of participating consumers on average adjusted their orders with a subscription retailer at least once during 2022. Of subscribers who made changes to their orders over the course of the year, 39% skipped an order.
Other interesting findings include:
An average individual subscriber was likely to hold 4.1 subscriptions across two retailers in 2022. This represents a 14% increase in average number of subscriptions per subscriber from 2021.
For the majority of retail verticals, subscribers were most likely to be subscribed to other products in their same vertical. For example, a customer subscribed to one food & beverage retailer was more likely to be subscribed to another food & beverage retailer than subscribed to another retailer in any other vertical covered in the study.
Food & beverage had the highest AOV of any retail vertical at $59. AOV across all retail verticals was $47.
Home goods had the highest average retention rate of any retail vertical at 51%. The average retention rate across all retail verticals was 33%.
“Subscriptions are becoming more than a habit—they’re becoming a way of life,” Recharge said in the study.