Research conducted by the Fosina Marketing Group indicates that millennials use subscription services more than any other demographic. This is because this generation enjoys the freedom and flexibility of accessing various products and services whenever they want, making the subscription business model an inviting choice.
Millennials seem to enjoy the convenience of subscription services, having things delivered to their doorstep without having to place a new order every week or every month, and the simplicity of a service subscription service too.
A Goldman Sach’s analysis showed that millennials favor access over ownership. Despite the fact that they’re in their prime buying years, unlike older generations, major life purchases like cars and homes aren’t as much of a priority to millennials. This demographic prefers mobility over setting down roots, and subscription services give them the flexibility necessary for a modernized nomad.
A generation that likes the idea of a digital option that they can access at all times with little to no hassle. They would like to watch television, catch up on the news, order food and have essentials delivered to them all in a similar manner, with easy payment solutions for accessing those products and services.
How to attract millennials to subscription services
When it comes to subscription revenue millennials are the most profitable demographic, and businesses should market to them in an appropriate, suitable way. However, just because this generation favors subscriptions doesn’t mean they’ll eagerly subscribe to any product that comes their way. Because they are extremely media and tech-savvy, millennials want businesses to make an honest recommendation of something that makes their lives better, instead of being sold an item.
Millennials are 24% more likely to have a meal kit subscription than baby boomers, and 28% more likely to sign up to receive a beauty subscription box, according to a study by data-driven marketing firm Fluent that was published on Retail Drive.
"Millennials are prime targets for beauty and grooming subscriptions, as they are aware of and subscribe to such services at higher rates compared to the older population," the report states, adding that sellers will also need to elaborate on certain issues to be successful.
According to TotalRetail, the majority of millennials subscribe to products in the personal grooming category, with food and household items closely following. Online video, gym membership and music services are the top three service subscriptions. Subscription services offer an option that’s simple, recurring and tailored.
Savings attract millennials
This demographic has the biggest demand for online services, but the most limited cash flow compared to previous generations. Services that would be too costly if charged in a big one-off package become affordable when they’re spaced out over a certain period. Similarly, millennials may be enticed by unit discounts given in exchange for product subscriptions, according to TotalRetail. Merchants should look for ways of capitalizing on these models to grow their businesses.
As millennials advance in their careers, settle down to start families and spend more of their income on products and services, it’s expected that many will take up even more subscriptions. As they begin to make more purchases, they will be attracted to simpler ways of accessing goods and services. Merchants have an opportunity to expand their business by taking advantage of this rise in millennial buying power and their needs for convenience.