What: Report reveals a surge in the direct-to-consumer subscriptions market during the pandemic-induced e-commerce boom.

Why it is important: There are a total of 225 million subscriptions in the U.S. from USD 61 million consumers, which is 3.7 subscriptions per person. The total annual revenue of the d-to-c subscription market is now USD 27.6 billion.

The direct-to-consumer subscription model has been around since 2004 with smaller businesses using this as an opportunity to test the model out, but no massive story or success came from it. The next noticeable subscription was the launch Birchbox in 2010 which allegedly put subscription boxes on the map.

The report revealed that between 2010 and 2012, similar companies emerged, which included Ipsy, Blue Apron and Dollar Shave Club. From 2011 to 2015, d-to-c subscription companies experienced a 4,461 percent increase in revenue.

The report also analyzed the current composition of d-to-c subscriptions in the market and classified it into three segments:

• Replenishment services: (32% of the market) grocery, grooming, toiletries and pet supplies. Ex: Dollar Shave Club, Olipop, Quip
• Membership subscriptions: (13% of the market) subscription to a product plus access to membership perks. Ex: Peloton, Thrive Market, NatureBox
• Curation-type subscriptions: (55% of the market) curated monthly boxes of apparel, accessories, snacks and cosmetics. Ex: FabFitFun, Birchbox and Cratejoy

The report also provides some insight on the triggers for consumers to subscribe, to continue to pay, or unsubscribe. The triggers for remaining involved in the subscription model are mainly experience-based and financial incentives. Triggers for cancellations include a preference for buying the product on a need basis, finding a better subscription, and dissatisfaction with the product or service.

The impact of the D-to-C Subscription Market