Study: Subscription retail had a healthy 2021
Online subscription retailers brought in plenty of new customers last year.
Subscription retailers grew their overall customer base by an average of 31% year-over-year, according to an analysis of more 12,000 subscription retailers and more than 25 million subscription customers from subscription payment solution provider Recharge. Across all categories analyzed by Recharge — beauty & personal care, fashion & apparel, food & beverage, health & wellness, home goods, pets & animals, and other — subscription retailers grew their overall customer base by an average of 31% year-over-year. By specific category, annual customer base growth percentages totaled:
- Beauty & personal care: 25%.
- Fashion & apparel: 13%.
- Food & beverage: 41%.
- Health & wellness: 34%
- Home goods: 39%.
- Other: 2%.
- Pets & animals: 64%.
Recharge’s “2022 State of Subscription Commerce 2022” also found that compounding the average growth in customer base was growth recorded across every vertical on an average monthly basis. In conjunction with this growth in overall customers, subscription retailers analyzed by Recharge also saw significant growth in the three key areas of their business: average order value (AOV), monthly recurring revenue (MRR), and customer lifetime value (LTV).
When reviewing retention rates for subscription retailers across categories, as well as segmented by annual sales range, Recharge discovered that after a 12-month period, up to 42% of subscribers stayed on with retailers. In comparison, the average monthly retention rate for non-subscription e-commerce retailers is under 1%.
After one month of sign-on with a subscription retailer, the majority of customers (over 80%) are still customers, according to Recharge. Within the first four months of sign-on, that statistic drops close to between 50–60%.
Across all subscription retailer cohorts analyzed by Recharge, consumers purchased 28 million one-time products, skipped a shipment over 12 million times, and swapped products over 7 million times. The most engaged customers took those actions on average three times throughout the course of the year.
“Humans crave experiences that repeat, especially in uncertain times,” Callie Hawley, senior content marketing manager, Recharge, said in a corporate blog post. “In this way, subscriptions can provide immense stability for both businesses and consumers.”
Foodservice retailers roll out subscription plans
Several national foodservice retailers have launched food and beverage subscription programs in the past year. Initially tested at 17 Tucson-area stores in fall 2021, the Taco Bell Taco Lover’s Pass program became available across the U.S. on the Taco Bell app in January 2022. The program enables customers to redeem one of seven select taco options a day for 30 consecutive days at participating U.S. locations — for the price of $10.
During spring and early summer 2021, convenience retailer Circle K nationally rolled out a new monthly beverage subscription program, “Sip & Save.” Customers could choose any one of Circle K’s fountain beverages in any size cup, each day for $5.99 a month.
Spring 2021 also saw omnichannel coffee retailer Peet’s Coffee introduce what it calls a Carbon Neutral Series coffee subscription, by partnering with sustainability nonprofit Enveritas to sponsor the planting of three carbon dioxide-absorbing mangrove trees for every two pounds of coffee delivered—or 36 trees for a year's subscription.