Subscription-based business models have completely changed how American consumers obtain goods and services. With 61 million users in the U.S. subscribing to an incredible 225 million services, it seems like this type of model will not be disappearing anytime soon. In fact, subscriptions businesses are growing at a rate that is 3.7 times faster than that of companies in the S&P 500. 

A key factor in the acceptance of subscription services is shifting demographics. Younger generations have been big users of these models since they were young, especially Gen Z and millennials. At 39.3%, millennials currently make up the greatest share, but as Gen Z ages, they should eventually pass them. Another driving factor is the  COVID-19 epidemic, which drove subscription services to an astounding 11.6%, because traditional shopping channels were closed. 

The two main types of subscription services include business-to-business (B2B) and direct-to-consumer (DTC). Under this umbrella, there are three primary subscription models. Curated subscriptions, which cover anything from media to physical goods, account for 55% of all subscription sales. Replenishment services, which deal with consistently used goods like groceries and toiletries, account for 32% of the market. Membership/access subscriptions, which offer exclusive access and discounts make up the remaining 13% of the total.

Data shows subscriptions are here to stay