Are You a Subscriber?
In the olden days, the word ‘subscription’ typically was applied to just magazines and newspapers. Today, that’s not the case. Americans are buying everything from meal kits to baby products to vitamins by subscription. A McKinsey & Company survey found:
“Although streaming-media subscriptions have been popular for some time – 46 percent of consumers in our survey subscribed to an online streaming-media service…shoppers are now also turning to subscriptions for consumer goods…Male shoppers are more likely than women to have three or more active subscriptions – 42 percent versus 28 percent, respectively…”
In general, consumers pay monthly fees to receive goods or services that have tangible benefits. For instance, subscriptions may be appealing because they:
- Replenish everyday items and reduce the need for trips to a store (razors, vitamins, household goods).
- Provide exclusive access to lower-priced or highly-coveted goods and services (apparel, food, movies).
- Deliver curated experiences that delight subscribers or allow them to sample new things (video gaming gear, pet products, beauty products, treats, books, gift boxes).
Subscriptions have become popular among businesses and consumers. McKinsey reports the subscription market has grown 100 percent a year during the past five years.
Recently, the business model was applied to automobiles. The pay-by-the-month car sharing service “…connects drivers to used cars at dealerships nationwide, bundling warranty, maintenance, roadside assistance, and optional insurance into one month-to-month, pay-by-app fee (from $150).”
Remember, however, subscriptions can be a double-edged sword. On the one hand, they can help subscribers save time and money. For example, samples of beauty products eliminate wasteful purchases by helping consumers learn which items they prefer before they spend hours shopping and buy a full-sized product they don’t like.
On the other hand, subscriptions are ongoing and, while they may be economical choices, even small costs can add up over time. In addition, subscriptions often renew automatically – and they may go unused. Many people have paid gym memberships for months even when they’re not working out regularly. The same thing can happen with other types of subscriptions. Sure, it’s fun to open a box with a surprise inside. Just make sure the surprise – a book, a product, a pet toy, or something else – does more than clutter your home.
If you’re not sure how subscriptions are affecting your budget, it’s a good idea to review your monthly credit card bill and bank statement. If you’re spending more than you should, decide where to cut back.