Subscription Commerce Update – Disruptors Face Disruption
Subscription services continue to capture billions of dollars that would otherwise go to conventional retailers. However, we are now seeing some US subscription commerce disruptors face disruption themselves.
- We estimate that in 2018, US consumers will spend around $1.9 billion on beauty and personal care subscription services and around $3 billion on online meal kit services.
- Facing increased competition and high marketing costs, some of the biggest subscription firms, such as Blue Apron, are facing challenges in terms of growth and profitability, while others, such as HelloFresh, remain loss-making.
- Amazon Subscribe & Save is one of the most popular subscription services, and a hybrid retail/subscription model, such as this, looks the most sustainable. It means customers who want to cancel a subscription can do so while still shopping with the same retailer, and for the company, the enhanced scale provides opportunities to leverage fixed costs.