Subscription services, once the domain of print publications and book clubs, have taken the retail world by storm over the past few years. Boosted by the ubiquity of streaming services such as Netflix and Spotify, subscriptions are fast becoming an essential tool for retailers of all stripes. In fact, 81% of U.S. adults subscribe to at least one service delivering anything from dog food or toiletries to dinner or entertainment.1
“We’re entering a whole new retail environment,” says Wally Mlynarski, head of products with Merchant Services at Bank of America. “Today’s consumers care less about ownership and more about services like access, life automation, predictability, data and insights.” They want goods and services delivered to their door or phone and experiences curated specifically for them that are predictable and repeatable, and they don’t want to spend time thinking about how or when to pay. Subscriptions deliver on each of these fronts.
And they’re not just for media providers. With subscription services spanning all industries and markets, companies that may have thought subscriptions wouldn’t fit their business model may now want to reconsider.
“You would think a company that builds or installs garage doors couldn’t offer a subscription,” Mlynarski says. “But tie this into a home automation service and they can secure recurring revenue for allowing customers to check whether they left their garage door open and the ability to close and lock it if they did. That’s a subscription that meets a need.” And meeting customer needs, Mlynarski says, is what subscription services are all about. The more needs you can meet, the stickier your subscription becomes.