Subscription Market Growth Factors
One of the most powerful trends in the business world has been the growing dominance of subscription services. From Amazon Prime to Costco memberships to Dollar Shave Club, subscriptions make up some of the most recognizable brand names on the market today. These popular companies are joined by 225 million other subscriptions that are accessible nationwide that over 61 million Americans are paying for. This translates to an average of 3.7 subscriptions per person, which is only expected to grow in coming years.
The high adoption rate among younger generations, such as Gen Z and Millennials, is a major factor driving this growth. Leading the way are millennials, at 39.3%, and Gen Z, at 21.9%. Their extended exposure to these types of services and familiarity with the digital technology that many of these subscription services rely on makes it more common for them to have a subscription more than a Baby Boomer.
The COVID-19 pandemic was another major force in the rise of subscription services. Traditional businesses were forced to temporarily close due to lockdowns to control the spread of the virus. In turn, this led consumers to rely on subscription services for necessities like groceries and toiletries. Subscription-based companies had impressive growth during the pandemic, growing by 11.6%, while other industries shrank by 1.6%.