The Financial Brand Insights - Fall 2022

And consumers are sticking with them. Only 14% say they plan to reduce the number of subscriptions they have while 51% are planning to add more. How Did We Get Here, and Where Are We Going? In a subscription economy, the traditional business model of one-time payments is overtaken by subscriptions that automatically recur monthly, quarterly or yearly. This surge in subscriptions makes sense in light of the pandemic. With the country under lockdown, people weren’t going to movies or socializing — so why not add that Amazon Prime subscription? It was easy and sometimes necessary to get essentials delivered to your door for families and their pets. Fido needs that 60-pound bag of food every month. Why not set it and forget it with an auto-renewing subscription?

How Banking Providers Can

By Segmint

Quick question: Can you estimate how many recurring subscriptions the average U.S. household has right now? We’re not talking about the daily newspaper or your gym membership, although those are definitely the grandparents of the current subscription model that suddenly seems to be everywhere. Subscriptions to Netflix, HBO, Amazon Prime or other streaming services are just the most visible manifestations of a rapidly growing phenomenon. Today, there’s a subscription for everything. Recurring deliveries of meal kits like HelloFresh or Daily Harvest have taken off. Cosmetics and household purchases can be renewed monthly. So can purchases of everything from wine to fruit to vitamin supplements to streaming music to socks to car washes. Even pets are getting in on the act, enjoying food, treats and toys delivered each month via services like BarkBox and MeowBox. If you’re thinking subscriptions came out of nowhere and are now a juggernaut, you’re right. A recent survey by PYMNTS and found that the average U.S. consumer now has subscriptions with five retailers. That number increased in four consecutive quarters and is now twice what it was in the first quarter of 2021. It works out to roughly $200 per household.

The average U.S. customer has multiple subscriptions to obtain goods and services via ecommerce — ranging from streaming services to dog food. Here's how financial institutions can get a slice of this massive source of revenue. Tap Subscription Economy Revenue

Shocking Statistic: direct-to-consumer companies will offer subscription services by 2023. 75%

Gartner's prediction of how many

Is the boom in subscription-based purchases likely to be a permanent change? Probably. The subscription economy is predicted by UBS to grow to $1.5 trillion by 2025. The model is a win- win for businesses and customers. For customers, it’s easy and convenient and the fixed expenses help them budget each month. For businesses, recurrent subscription payments create effortless revenue and customers’ loyalty. But for financial institutions, those wins aren’t always so clear.

14% ONLY


of consumers plan to reduce the number of subscriptions they have.

are planning to add more subscriptions.





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